The Canadian government is continuing to pour money into the forestry sector as federal and provincial ministers meet this week in B.C. and try to stem the spiral of an industry in crisis.
Federal Energy and Natural Resources Minister Tim Hodgson opened the Council of Canadian Forest Ministers in Langford on Wednesday (June 3) by announcing an additional $130 million and by promising an “action plan” to be unveiled by the end of the week. This adds to the $2 billion announced since last August, including hundreds of millions in loan guarantees.
He also released a major report from a task force of ministry-appointed regional industry representatives, which concludes that the problems facing Canada’s forestry sector are more internal than external, and warns of an “existential risk” if changes aren’t made.
“While external pressures — most notably sustained U.S. softwood lumber duties, global market shifts, insect outbreaks, and wildland fire — have exacerbated these challenges, the task force’s conclusion is unequivocal: the most significant barriers to competitiveness are homegrown,” the report’s executive summary reads.
Hodgson said that across Canada, more than two dozen sawmills have closed since last August, affecting more than 2,000 jobs. Curtailments have affected 40 more, with another 1,000 jobs impacted.
The money announced on Wednesday will fund 56 projects nationwide, including $37 million for the Forest Enhancement Society of B.C. to turn low-value and residual trees and debris into usable products.
“So instead of being burned, fibre can be used to make pulp, bioenergy, pellets, and other products, creating more value from every tree,” Hodgson said.
Hodgson also laid out the task force’s main findings and promised a suite of new federal commitments would be released at the conclusion of the meetings.
Despite contributing nearly 200,000 jobs and $23.5 billion in GDP to Canada’s economy, the report says the forestry sector is “no longer globally competitive nor an attractive destination for large-scale investment.”
The “strategic vision” of the task force is a federally led, 25-year national strategy focused on restoring competitiveness and stabilizing employment, with forestry to be viewed as integrative manufacturing, rather than resource extraction.
The task force wants to stabilize timber prices and modernize the industry by, among other things, moving from a volume-based tenure model to area-based plans, while also reducing regulatory duplication at federal and provincial levels, better supporting communities, and diversifying trade.
To achieve the vision laid out in the report would require a $10-billion investment fund with a 10-year mandate, along with smaller investments and regulatory changes.
Kim Haakstad, CEO of the B.C. Council of Forest Industries, is pleased to see the government taking this advice seriously, noting that in any manufacturing business, the most important cost is the inputs used to make the product.
“When you’re not able to access that at a predictable rate, at a price that you know you can produce at a price consumers will pay, then you’re in trouble,” she said. “And we’ve been in that trouble for quite a long time.”
When Haakstad talks about economically viable timber and stable prices, she says this is not because B.C. lacks trees.
“I really believe that we have the trees,” she said. “And we need to manage them responsibly.”
Others disagree, including some of those tasked with developing B.C.’s old-growth protection strategy. These panellists told Black Press in March that one of the main issues is that in some parts of the province, all that remains is the best of the remaining old growth, which merits protection. Much of the easy-to-access timber has already been harvested, they say.
But Haakstad blames permitting times and other red tape, saying it takes two to three years to get a cutting permit.
“We’ve got to fix that system,” she said.
When asked about the impact of U.S. duties and tariffs — something B.C. Forests Minister Ravi Parmar brought up again in remarks after Hodgson’s announcement — she said the industry and government need to focus on what they can control.
“We cannot control the trade dispute with the United States,” she said. “And so we need to just focus on home and what we can do to make the sector more competitive.”