Western Forest Products is set to provide its next fiscal update for investors in February. The news is unlikely to be good for the company, which has been shut down by one of the longest coastal forestry strikes in B.C.’s history.
Its logging and milling operations, which span most of Vancouver Island, have been idle since July 1. In its most recent quarterly financial report, Western Forest Products disclosed it had already sold most of the inventory that wasn’t behind a picket line to generate some income.
For the 2,400 members of United Steelworkers Local 1-1937, it has been a long haul without a paycheque or extended benefits. There was hope, before Christmas, that veteran mediator Vince Ready could work his magic. But talks are stalled and now, having weathered a tough holiday season, the union appears to be settling in to see how long the company can cope with an empty timber yard and a vanishing profit margin.
“At this stage, the parties are really dug in,” Steve Hunt, director of the Steelworkers for Western Canada, said in an interview. “The parties have to sit down and get honest with one another.”
But, he adds, the union’s strike fund is robust: “We have 750,000 members who continue to pay into it every day. So, we’re not at any risk of running out of funds for assistance for our members.”
The forestry dependant communities where Western Forest Products operates are struggling too, including logging contractors who collect no strike pay. The company, mayors and logging contractors have called on the province to intervene and help end the strike.
But the union doesn’t want that help and the BC NDP government, which has a close relationship with the Steelworkers union, is obliging its allies. Although Premier John Horgan called on the two sides to get back to bargaining in December, he has balked at imposing any kind of solution.
The last time government intervened in the coastal-forestry sector, 16 years ago, these workers ended up with an imposed contract that they say created problems that are at the heart of this dispute.
The BC Liberal government of the day used binding arbitration to end a three-week-long forestry strike in 2004; it gave the employers flexibility in scheduling, called alternate shifts, that the union says has created unsafe working conditions by requiring employees to perform long and irregular work hours.
The proposed language on alternate shifts is one of the major obstacles to a settlement, the union says, along with proposed language from the company that would establish a strict new drug and alcohol policy, and more options for contracting out jobs.
The company’s head of communications, Babita Khunkhun, said in a written statement that the company will take its lead from the mediators, but there has been little movement. “The items discussed during bargaining over the last two months remain the same today," she said. “We are hopeful that the [union] will agree to resume collective bargaining on all items so we can finalize a package that will recognize our employees’ contributions while ensuring a sustainable coastal forestry industry.”
The company, in its recent financial report, said the strike comes at a bad time for the forest sector across the province, with companies curtailing production and shutting down mills owing to high log costs and poor market conditions. It also says a string of regulatory changes made by the BC NDP government since 2018 may have the unintended consequence of compounding those conditions by driving up costs and lowering log-harvest volumes. The changes include protection for species at risk, new controls on the sale of forestry tenures, and new “fibre recovery zones” that require wastewood from logging to be made available to secondary users.
But there is more change to come.
Against the backdrop of this seemingly intractable dispute, the B.C. government is expected to introduce changes this year regarding the future of old-growth forests that could have an additional impact on Western Forest Products’ operations. An independent panel is expected to report back by April, after conducting public consultation on how to manage old-growth forests. Doug Donaldson, the Minister of Forests, Lands and Natural Resource Operations, who refers to old-growth trees as “majestic giants,” will also introduce significant amendments to the Forest and Range Practices Act in the spring.
Even if a settlement can be reached in the coming weeks, Western Forest Products’ investors must recognize there will be no returning to business as usual.
We have a weekly Western Canada newsletter written by our B.C. and Alberta bureau chiefs, providing a comprehensive package of the news you need to know about the region and its place in the issues facing Canada. Sign up today.