The Tyee: Why Both Parties Are Wrong about BC’s Forestry Crisis

October 17, 2024
Ben Parfitt
The Tyee 

Original article here.

The problem isn’t red tape; it’s a lack of trees. 

Conservative Party of BC Leader John Rustad has a long association with the forest industry in British Columbia. His family ran a sawmill in Prince George and Rustad headed his own forest consulting firm.

The Conservatives say the forest industry is central to the province’s economic well-being — and many rural communities in Rustad’s own riding of Nechako Lakes.

The huge riding west of Prince George includes Houston, Burns Lake, Vanderhoof and Fort St. James, mill towns where prodigious quantities of logs have for decades been turned into lumber in local sawmills.

On its website, the Conservative party calls the province’s forest industry “the envy of the world.” The party goes on to say that that industry “is 100 per cent sustainable and renewable and supports tens of thousands of high-paying jobs across the province.”

But the industry is in trouble because it can’t get enough trees to cut down.

Rustad blames government. Access to trees to log has become “a slow, complex and costly ordeal,” Rustad states on the BC Conservative website.

Rustad has hammered on the image of an industry crippled by bureaucratic red tape for some time.

“This BC NDP government’s inability to get forestry permits done is killing well-paid union jobs and independent jobs, all across British Columbia,” Rustad said more than a year ago. “They are just not issuing permits. BC Timber Sales is not putting wood out for tenure.”

It is a criticism that has caught the NDP’s attention.

The party says it intends to bring “efficiencies to the permitting process with a goal of granting faster access to timber processing.” The NDP singles out BC Timber Sales — a timber-auctioning program administered by the provincial Ministry of Forests where, on paper at least, about 20 per cent of the trees logged annually in B.C. originate — as the potential bottleneck. The NDP says it would address that by “completing a full review of BC Timber Sales to improve access to public timber.”

The boom

To unpack this, let’s start with the assertion that the province’s forest industry is the envy of the world. The actions of B.C.’s largest forest company, Canfor, suggest otherwise.

Twenty years ago, Canfor opened a refurbished sawmill in Houston, a manufacturing facility so technologically advanced that it could produce 25 per cent more lumber than the until-then world’s largest sawmill in Germany.

A two-hour drive to the southeast of Houston, the Plateau sawmill is also operated by Canfor and lies a short distance from the community of Vanderhoof.

Between them, the two mills in Rustad’s riding churned through millions of logs annually at a time when, throughout B.C.’s vast Interior, logging rates were soaring to levels never before seen.

The logging spike of 20 years ago was a response to an “eruptive” mountain pine beetle outbreak spurred on by climate change, with the provincial Ministry of Forests giving Canfor and other companies the green light to cut down as many of the beetle-attacked and now dead trees as they could before they lost their value as sources of high-quality wood fibre.

The ensuing logging would see tens of millions of additional trees logged, many of them attacked by beetles, many of them not.

The bust

It was well understood by both the forest companies and the Ministry of Forests that regulated them that the upswing in logging could not be sustained. A future course correction was inevitable and would see logging rates come down sharply.

That course correction is now well advanced, likely not over, and happening everywhere, including in Rustad’s backyard.

Logging rates are falling because there simply aren’t the good trees to cut down that there once were. What forests remain unlogged are far enough away from the mills that companies are reluctant to or refuse to log them because of the high costs.

A growing amount of forest is also undesirable to log because of the extensive wildfires in recent years and the inventory of older, beetle-attacked forests that companies simply aren’t logging.

It would take less than 20 years for Canfor’s super-mill in Houston to run so short of logs that the company’s executives decided to pull the plug, announcing in January 2023 that they would close the facility early that spring.

Then, last month, Canfor announced that its Plateau sawmill would soon join the burgeoning number of mills closed by the company in recent years, including pulp mills in Prince George and Taylor, wood pellet mills in Prince George, Chetwynd and Fort St. John, and sawmills in Fort St. John and Bear Lake.

BC drains as US gains

For the thousands of workers to lose their jobs in those mills in recent years, news that they work in an industry that is the envy of the world is a surprise at best and an insult at worst.

Yes, an impressive 40,000 or so workers are still employed in that industry. But when Canfor and other companies went into logging and milling overdrive 20 years ago, there were more than 90,000 direct jobs in the industry. It is no coincidence that roughly twice as much was logged then as now.

Since then, under BC Liberal and NDP governments alike, numerous mills have been shuttered with gut-wrenching consequences for workers, their families and suddenly cash-strapped municipal governments that face drastic declines in industrial property tax revenues.

In lockstep with the steady closure of mills here, Canfor and other B.C. companies have acquired one mill after another in the southeast United States, where intensively managed tree farms produce enough wood fibre in 20 years to make lumber, which is twice as fast as it takes in B.C.

A website devoted to job opportunities with Canfor includes a map of openings at Canfor’s North American mills. As of early October, the map showed a total of 15 job opportunities in B.C. versus 33 in operations in the southern U.S.

A lack of permits or a lack of wood?

As for Rustad’s assertion that the provincial government’s approval of logging permits has bogged down and that companies face unacceptably long waiting times between when they apply for such permits and when their applications are approved, The Tyee looked at how much logging rates have actually declined under the auspices of BC Timber Sales.

The Conservatives assert and the NDP acknowledge that there is a problem here. The program is a vital source of logs for some companies that don’t hold secure government licences granting them exclusive rights of access to publicly owned timber. (About 94 per cent of B.C. is “Crown” or publicly owned land that is overlaid by the territories of numerous First Nations.)

“A company like Nechako Lumber [in Vanderhoof] needs to have hundreds of thousands of metres of BC Timber Sales every year because they don’t have that licence themselves,” Rustad has said. “When government isn’t issuing any timber sales the company is in dire straits.”

Figures available through a publicly accessible database known as the Harvest Billing System show that the volume of timber logged under the BC Timber Sales program has dropped precipitously, falling from more than 11 million cubic metres logged in 2014 to just shy of four million cubic metres logged last year.

Since the Ministry of Forests directly issues allotments of timber for sale under the program, it is clear that far less of such timber is being put up for auction or that what is being advertised for sale is not being bid on.

Whether this is because there are no longer enough trees to cut down, or the costs of cutting those trees down is much higher due to their remoteness, or consultations with affected First Nations have bogged down, or there are more hoops that ministry personnel have to jump through before issuing cutting permits cannot be gleaned from the data.

And the ministry will not entertain questions on the decline during the election period.

Canfor’s logging plummets

Unlike Nechako Lumber, Canfor holds a great deal of its own logging licences, granted by the provincial government and giving the company exclusive rights of access to vast tracts of forest. The most secure of those licences are tree farm licences, or TFLs, that cover defined areas of publicly owned forest and grant the holder exclusive logging rights within them.

The other significant licence is a forest licence, which grants the holder a set volume of timber to log within a timber supply area where a number of other companies may also hold such licences.

Because a company like Canfor has both TFLs and forest licences, it effectively has its own timber to log. But it too must still get government approval to log tracts of forest covered by those licences.

The Tyee again used the Harvest Billing System to analyze what has happened with Canfor’s logging activities during the past decade and found that much the same pattern prevailed on its most secure TFLs and forest licences as was the case with BC Timber Sales.

The data reveals that in 2014 Canfor logged more than 7.8 million cubic metres of timber. By 2023, that number fell to 3.29 million cubic metres, marking a 57 per cent decline in 10 years.

The gap between what the government says was Canfor’s approved allowable annual cut — the maximum the company is legally entitled to log under those licences — and what it actually did log was enormous, with Canfor logging just 51 per cent of its entitlement last year.

The Tyee asked Canfor what its position was on government approvals of logging permit applications. In an emailed response to questions, the company said that the issuance of those permits has slowed dramatically, and that logging rates overall are now 60 per cent below the allowable annual cut set by the Ministry of Forests’ chief forester.

“While some of this decline is the result of natural disturbance, beetle infestations and wildfire particularly, it is also a result of the pace and scale of policy change and regulatory complexity that has been introduced over the last few years,” Canfor told The Tyee. “Today we find ourselves waiting 3.2 years in the Peace and over two years in the Prince George region to achieve harvesting permits, where in 2016 it would take about seven months.”

Last year, in response to concerns raised about the length of time it takes companies to obtain logging approvals in the Merritt area, the Merritt Herald reported that the Forests Ministry said “that a vast majority of local permits” were being granted in 45 days and that local logging companies believed those permits that were taking longer were the result of delays associated with government consultations with First Nations.

A good example of where the ground has shifted dramatically in relations between First Nations and the provincial government is in the Peace region that Canfor has now effectively abandoned. In 2021, a landmark decision by the Supreme Court of British Columbia found that the province had failed to consider how the cumulative effects of multiple resource industry operations would violate the treaty-protected rights of the Blueberry River First Nations.

Those industrial activities included, of course, industrial logging. The decision has had and will continue to have significant impacts not just in the traditional territories of the Blueberry River First Nations, but for all First Nations in BC.

Another example of where the government has committed to consult with First Nations is on the issue of further protection of lands, including forest lands, with a stated goal of protecting 30 per cent of the provincial land base by 2030 — something that Rustad said he is unequivocally opposed to and would axe should the Conservatives form government.

In Canfor’s backyard

Mike Morris, who is the outgoing MLA for Prince George-Mackenzie and was once Rustad’s caucus colleague before Rustad was dropped from the BC Liberal caucus for questioning climate change, told The Tyee that he thinks the lack of timely issuance of logging permits is a red herring.

Canfor and other companies aren’t getting the timber they once did “because it’s not there,” Morris said. He went on to say that when companies like Canfor tell him that a lack of permits, not a lack of forests, is the problem, he asks them to “take me to where all this wood is. They pooh-pooh me and never get back to me.”

What’s far more significant to Canfor and others, Morris believes, is that what forests remain to be logged are generally much farther away from the mill towns and therefore far more expensive to extract and transport.

This, probably more than anything else, explains the so-called “timber supply crisis” that Canfor and others find themselves in. They’ve run out of the cheapest to get and most profitable to log forests. When you add to that low commodity prices (lumber is currently selling far below the record levels of a few years ago) and a crushing near doubling in the duties B.C. lumber producers pay on the lumber they ship to the United States, mill closures are inevitable.

Recent decisions by the chief forester setting out new and much lower approved logging rates throughout the province bear this out. This includes the massive Prince George timber supply area.

Prince George is also the community where much of Canfor’s remaining mills in the north-central region of the province are located.

In 2017, B.C.’s then-chief forester, Diane Nicholls, set a new allowable annual cut for the TSA, dropping it from 12.3 million cubic metres per year to 8.4 million cubic metres. The 33 per cent drop would hold for five years before Nicholls imposed a further drop to 7.4 million cubic metres, meaning that in 2022 the maximum that companies like Canfor would be able to log in the TSA was 40 per cent below what was available in 2017.

Nicholls would go on to note in her decision that much of the historic logging in the Prince George area had occurred in the southern and central reaches of the TSA, meaning that the most economically desirable forests — those closest to the mills —had been hit unduly hard, leaving much of what remained a lot farther away and therefore more expensive to get.

Much the same situation of logging companies bleeding away the best and easiest to access timber and leaving what remains much farther away prevails in the Mackenzie area, as detailed in a recent report in The Tyee.

All of this, Morris says, underscores that it is not bureaucratic red tape that has dragged the industry down but an acute shortage of reasonably accessible forests that can be logged at profit.

“If it was a matter of policy preventing access to fibre, why would industry be selling assets and abandoning B.C. rather than wait for that stroke of the political pen to change policy. They know there’s nothing left,” Morris said in an email to The Tyee.

The bleeding isn’t over

Compounding problems, Nicholls noted, what commercially desirable forests remained in the TSA also contained some of the highest remaining concentrations of wildlife and biological diversity.

“Supply blocks A and B are areas of the TSA with low existing [logging] disturbance, and therefore are important to values such as caribou and biodiversity. Shifting too much of the harvest to those areas would overly increase risks to those values,” Nicholls warned.

To allow Canfor and others to now log those areas as intensely as they did elsewhere would be a mistake, Nicholls said then, recommending that a cap be put on how intensively the TSA’s remaining and remote forests should be logged.

All of this helps explains why Canfor, a once formidable presence in B.C., is now a shadow of its former self.

And the bleeding is likely not over.

As the company said in response to questions from The Tyee:

“Our operations in the central and Peace regions of B.C. are not currently profitable and have been contributing hundreds of millions of dollars in losses annually. In 2023, our annual report shows an operating loss of $532 million in 2023 as a result of the challenges in British Columbia. Over the same period, our U.S., European operations showed positive earnings.”