B.C Forestry Sector Staring at Tough Near-Term Challenges

SEATTLE (Scrap Monster): The widespread layoffs and shutdowns across the B.C forestry sector is seen causing huge economic and social impact. The forecast of a very bleak winter season ahead is likely to result in more uncertainties.

In accordance with Finance Ministry budget numbers, forest revenues have dropped significantly by over 11% so far this year. The harvest volumes are expected to drop to levels of 46 million cubic metres in 2019. The industry is mainly hurt by rock-bottom timber prices, large scale destruction of Crown harvest zones due to beetle pine epidemic and wildfires, said Forests Minister Doug Donaldson.

It must be noted that Mosaic Forest Management had announced early winter shutdown of its timber harvesting operations, impacting about 2,000 workers. The scheduled permanent closure of Tolko’s Kelowna sawmill by first week of Jan 2020 is feared to result in loss of 175 jobs. The recent closure of Canfor’s Vavenby sawmill had resulted in 172 job losses in the region.

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The stumpage rates in the B.C. Interior dropped by 12% in October, whereas in Coastal regions, it dropped by 24%. A political intervention into the stumpage system is feared to make things worse for B.C producers and exporters. It must be noted that B.C. lumber exports to the U.S. face hefty tariffs of up to 20%.

The B.C. forestry sector supports approximately 14,000 jobs, generating annual revenues of around $4 billion.