Deep in the tree-studded interior of British Columbia, the tiny town of Clearwater is facing a problem that’s sweeping across the province: Surrounded by nothing but trees, somehow, there isn’t enough timber to support a local sawmill.
This summer, for the first time in decades, the town of around 2,000 people — about a five-hour drive northeast of Vancouver — won’t have a mill to anchor its local economy, as Canfor Corp. plans to mothball its nearby Vavenby operation in July.
It’s a situation that’s been years in the making, as the ravenous mountain pine beetle population exploded thanks to warmer winters, which in combination with record fires, destroyed huge swaths of forests. Now, there are too many mills in B.C. and not enough supply to feed them all.
With mills closing and shifts being cut, B.C. officials predict the timber supply will decline 20 per cent from about 70 million cubic metres per year to 58 million by 2025. As communities like Clearwater, which still lacks broadband internet access, search for a way forward amid a shrinking forestry sector, some see an opportunity to change the type of products that are manufactured from local woods.
“You’ve got craft beer and you’ve got craft pot and you’ve got craft timber,” said Merlin Blackwell, mayor of Clearwater. “We want to take our trees, and our fibre supply here, we own it, and we want to treat it really well.”
You’ve got craft beer and you’ve got craft pot and you’ve got craft timber
Merlin Blackwell, Clearwater mayor
Rather than mass produce lumber or any other product for export, he wants the town’s residents to gain access to the provincial land that Canfor had used to harvest timber for the mill, so they can build businesses that create new products.
As an example, he points to a couple in town, whose business Nest Timberhome, uses timbers to build custom homes, or trusses for homes, architectural accents and other products.
His idea gained some currency in May, after B.C. legislators passed Bill 22, which creates a new obligation for companies to demonstrate a “public interest” before they can sell or transfer their licenses to harvest timber from provincial land in a specific geographic area.
In Clearwater, Canfor plans to sell a license, also known as a tenure, to harvest 349,000 cubic feet of timber per year from the area, to Interfor Corp. for $60 million. Under the new law, it must demonstrate a public interest.
Smoke billows from a forest roughly 65 kilometres west of Williams Lake, B.C.
But the exact meaning of public interest provoked long debate before the bill passed.
“Public interest is about looking beyond the private interests of people involved in the transaction,” Doug Donaldson, B.C.’s minister of forests, lands, natural resource operations and rural development, told legislators on May 27.
He added, “This means government must consider how the allocation of harvesting rights resulting from the transaction would benefit the people of B.C. This includes social-economic benefits, First Nations concerns and other matters, and it’s specific to the transaction.”
Under the bill, Donaldson, who previously worked for Storytellers’ Foundation, a non-profit organization focusing on community economic development, can approve or reject any transfer or sale of a tenure; or it can approve a deal but with conditions.
The mountain pine beetle is spreading rapidly among trees in B.C.
Martin Juravsky, chief financial officer of Interfor, said his company’s $60 million purchase of the tenure from Canfor, will likely serve as a test case for how the province plans to implement the bill.
He said Interfor plans to use the timber to feed its Adams Lake mill about 120 kilometers to the southeast of Vavenby, which serves a broader public interest by ensuring jobs at that mill.
On Wednesday, the local First Nations, Simpcw, announced its opposition to the transfer of the license to Interfor, saying that Canfor’s cutting rights are in its territory. It called on the province to invoke Bill 22 to bring about economic reconciliation, so it can acquire cutting rights to grow its forestry operations.
“It’s a non-starter”, Chief Shelly Loring said in a press release. “Unless and until Simpcw has a meaningful role in management of our forests, this transaction will not go forward,” adding, “the loss of 178 jobs in a small community is most definitely not in the public interest.”
Regardless of what communities want, the reality is there’s just too much manufacturing capacity for the amount of timber that’s available in the province, said Juravsky.
“There’s no way to avoid the fundamental issue that there’s a shortage of timber, and that is the raw material for a sawmill whether it’s a large saw mill, medium-sized sawmill, or a small sawmill,” said Juravsky.
The situation has been exacerbated by high lumber prices, as a result of U.S. tariffs and a slow housing market in the U.S., which is the main export market for Canada. Plus, there have been high log costs in B.C. While both of those factors are considered temporary, they have contributed to the problems that mills in the province face, in addition to the permanent reality that there is less timber to feed the mills.
On the coast and in the interior, small and big companies alike are making layoffs. Teal-Jones Group, which sells lumber in Canada and overseas, last week announced it would implement dozens of layoffs and shift reductions to contractors who log on Vancouver Island, and employees who work at its mill in Surrey, B.C.
Gerrie Kotze, chief financial officer of Teal-Jones, said the biggest factor for him were lumber prices, which are affected by a complex factors, but the main issues is a slow U.S. housing market, and tariffs, in combination with high log costs.
But while those factors are expected to be temporary, the permanent loss to timber caused by the mountain pine beetle and fire is causing other companies to scale back operations.
This week, Norbord Inc., which manufactures wood-based panels, said it is cutting production at its mill in the Cariboo region of B.C., as a result of supply pressure caused by the pine beetle.
Pine beetles attack mature trees by boring into the bark and feeding on the phloem. Historically, cold weather helped keep populations in check, but starting in the late 1990s, warmer winters allowed the population to grow exponentially, leading to millions of acres of lost forest, according to the province.
Regardless of what communities want, the reality is there’s just too much manufacturing capacity for the amount of timber that’s available
Much of that deadwood was harvested, but several industry insiders said it created a backlog that has mostly gone. That means “rationalization,” or reducing the number of mills in light of reduced supply.
“In the interior, you can completely understand why there has to be a rationalization, because we had that great pine beetle epidemic, so therefore there’s not going to be enough timber to support the existing mills,” said Russ Cameron, president of the Independent Wood Processors Association of British Columbia.
Pines killed by mountain pine beetle infestation in the 100 Mile House are of British Columbia glow red among the green of other trees.
But he said his roughly 50 members — all family-owned or private companies that operate saw mills, pulp mills, rotary mills or other manufacturing plants where timber is the feedstock — have faced difficulty obtaining supply for their operations.
None have tenures, and are hoping that Bill 22 frees up some wood currently controlled by major timber companies so his clients can use it for their own mills.
“It’s really difficult to tell what the Minister is going to do,” said Cameron, “but from our point of view, we’d like to see more players.”
Back in Clearwater, Blackwell said the irony is that his area doesn’t actually have that much pine that’s been affected by the beetle. That’s why Canfor’s decision to permanently close the mill, eliminating around 170 jobs, smarts, he said.
“We’re still completely surrounded by trees, we’re not surrounded by clear cut,” said Blackwell. “This is economics and supply side that is doing this to us. A lot of people don’t understand how it could have come to us when there’s trees all around us.”
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