Professional Documents
Culture Documents
August 16, 2019,
Attention: Rod Link
Dear Editor,
In response to Tom Fletcher’s August 10, 2019, article (“Sawmill struggles as NDP boosts
northwest log exports”) a bit of history is needed to portray the reality of the non‐Skeena Sawmill
businesses that comprise most of the timber industry of northwest BC.
Skeena Sawmills takes every opportunity to market their point of view, both in the media and
with government — good for them. But by omitting facts that do not align with their business
mandate the public (your readers) are not getting the full story.
Twenty five years ago, the North West played a significant role in BC's forest industry. The area
boasted a pulp mill and a sawmill in Prince Rupert, a pulp mill in Kitimat, two large sawmills in
Terrace, two sawmills in Kitwanga, and a sawmill in Hazelton. As everyone involved in the
industry knows, including today's NDP government, the early 2000s saw multiple closures,
bankruptcies and liquidations of these sawmills and pulp mills. Each one of these significant
economic collapses hurt local contractors and small businesses who relied on steady work to
survive.
Closures, re‐openings, and second bankruptcies/closures of these mills continued into the mid‐
late 2000s. The brutal reality of job loss had to be faced by the timber harvesting contractors
and mill workers who depended on the forest economy for their livelihood. Many of these folks
also had to file for bankruptcy or watch as their life savings were depleted as they waited for the
saw mills to come back and once again provide steady employment.
As we all know that did not happen. What did happen is several small businesses, many of which
are First Nation owned, developed their own markets and customers, based on the export of
logs, and slowly and steadily built successful and vibrant businesses. They did this without having
to depend on a sawmill that may or may not operate year to year, month to month, or even day
to day. By the late 2000s there were no sawmills left in this area; even one of the best timber
manufacturers in the world (West Fraser) could no longer make a business case for operating
mills here.
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Today’s reality is that most of the people who depend on forestry for their livelihood in the
northwest are no longer willing to rely on a single sawmill to be the basis for the industry.
Mr. Fletcher wrote about the recent “increase” in log exports allowed under new cabinet orders
(OICs) from the NDP regime in Victoria. For long term tenure owners, such as just about all of
the First Nations owned forestry businesses, the way the new OIC is calculated provides not 40
percent export allowances (of timber harvested) but will within a short period of time result in
zero percent.
Yes, zero. As always with BC forest policies and regulations the Devil is in the details, and
sometimes he is well hidden!
Here’s the problem:
Under the old rules the volume advertised that no one wanted to buy was deemed to be surplus
and was allowed to be exported. When it was exported, because there were no offers on it, that
volume was not included in the export allowance. (The last cabinet order allowed 20 percent of
timber harvested to be exported without being made available to domestic users.) In the new
cabinet order, all volume is included in the export allowance, even the volume that is exported
because no one wants to buy it domestically.
This will result in tenure holders having a zero export allowance or even negative export
allowance within months. This will not sustain many existing operators. In fact, it will have a
catastrophic effect on First Nation and other tenure holders in the North West. No one can
operate under that kind of uncertainty, spending millions of dollars in planning and harvesting
only to find out that the purchase offers for the logs from the local sawmill will not cover the cost
of harvesting and delivery to them, never mind allow for a profit.
That means harvesting will decline or stop, entrepreneurs will lose business, people will lose jobs,
communities will lose revenue.
The government has provided a short‐term fix to let us continue operating. But our calculation
shows we will have zero OIC export capability within 6 months.
Mr. Keery complains of the impact of the new OIC on BC Timber Sales but fails to mention that
Skeena Sawmills is one of the largest buyers of said timber sales.
He also notes “log shortages”. However, Skeena Sawmills have two large forest tenures in the
Terrace area and a third one south of Kitimat. Over the past five years they have harvested less
than half of the volume they have access to on their own tenures. (Ministry statistics also show
that Skeena has left behind 36 percent of the timber they have harvested as waste.)
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And more than once this year they have committed to buy logs from local timber suppliers then
closed their gates and refused to take the delivered volume.
In the meantime, they have made a habit of threatening to block export sales, and as the sole
bidder for this same volume through BC Timber Sales, they force the harvester to sell them logs
at below the cost of harvest.
So, while they state publicly that they have log shortages, local contractors suffer due to the
unreliability of Skeena’s log purchase commitments.
So where do we stand now? Northwest BC Forest Tenures are largely controlled by First Nations
owned businesses. These businesses have provided steady employment and consistent
opportunity to the many people and contractors who depend on the local timber supply they
provide. This list is long and includes planning and engineering consultants, assessment
professionals in archaeology, fisheries, wildlife, visual landscape, terrain stability, silviculture,
loggers, road builders, truck drivers, sort yard operators, scalers, banders, taggers, sorters,
buckers, marketing personnel, documentation and permitting, service providers and stevedores
— more than 200 full‐time jobs at the Ports of Stewart and Prince Rupert alone!
The annual economic activity created in the northwest through these hard‐working, creative, and
entrepreneurial people totals about $150 million.
These businesses are not asking for handouts or sweet deals from the government. We are all
working hard to succeed and would love to see a vibrant local processing facility. What we cannot
accept any longer is a manufacturing business that exploits government regulations to prey upon
the small businesses in this area to subsidize its operation.
If Skeena wants to secure even more volume beyond the significant tenure they already control
and don’t fully harvest and the many BC timber sales they purchase, then they need to pay fair
prices and negotiate fair deals with local suppliers.
If their model insists on local suppliers selling them logs at a loss and government restricting
exporting even more than they have in the past, then the new northwest BC forest industry will
die a second and even more painful death.
Yours truly,
Cathy Craig
CEO,
NorthPac Forestry Group Ltd.
Copies to: Hon. D. Donaldson, Hon. S. Fraser, R. Kahlon, Parliamentary Secretary to the Minister
Ellis Ross, MLA, John Rustad, Opposition FLNRO Critic, T. Fletcher, Black Press
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