Forest industry stumbles: Canfor closure tip of the iceberg

“I never imagined a day that our forest industry would be in such a predicament, especially Fort St. John Canfor closing their doors,” said Fort St. John Mayor Lilia Hansen.

Logging Truck (Source: iStock photo)

Canfor, which has been part of the fabric of the North Peace for decades announced in September that it would be closing the Fort St. John mill, effective December 20, 2024. The company cited “increasing regulatory complexity, high operating costs and the inability to reliably access economically viable timber to support our manufacturing facilities” and the resulting financial losses in the BC operations as reasons for the closure.

These challenges were made worse by increases in punishing US tariffs, something Prince George-Peace River-Northern Rockies MP Bob Zimmer has been taking the federal government to task over in recent months.

Knowing the reasons for the closure, doesn’t change the fact that hundreds of families in the North Peace are suffering. Families who not only work for Canfor, but the logging companies – the drivers, equipment operators, mechanics and other support workers – and are now facing an uncertain future.

“We're surrounded by excellent quality tight fiber, hard working employees, contractors, and support sectors.  I'm told that the wood we produce is in demand and customer requested,” said Hansen.

Many of the employees and contractors Hansen refers to have grown up in the forest industry. They’re second or third generation loggers, more in some cases, and they have established family-run businesses. For those companies who were built by husband-and-wife teams, there isn’t a cushion of another income, separate from the forest industry, to keep them afloat. A lot of these companies employ their adult children in various roles.

“We’re working really hard to keep the people that we have, but I don’t know if that’ll work or not.”

Joe Bergen of Hot Saw Logging

MP Zimmer spoke to a group of logging contractors recently and produced a video of the discussion. One of the logging truck drivers he spoke to, Wayne Harder of W & M Enterprises, also appeared as a witness at the federal Standing Committee on International Trade on November 4.

Harder’s business, that he and his wife Marie built from the ground up 32 years ago, used to employ 120 people, from heavy duty mechanics to logging truck drivers to heavy duty equipment operators.

“That’s all we’ve done since we’ve been married,” Marie told Zimmer in his video. “We’ve seen this major downturn. In the last six to eight years, (business) dropped 25 percent, now it’s another 90 percent beyond that, and what’s left means we’re not hiring people.”

People who have put their lives into the forest industry are prematurely reaching the end of a life-long career, with nowhere to go. After thirty-plus years in one industry, doing one job, it’s not easy to suddenly change careers.

There are also the apprentices, the students and young people who saw the forest industry as a good career, one they could take pride in, now they too must change direction and find another career to pursue.

At their peak, the five companies Zimmer featured in his video between them employed over 950 people.

“We’re working really hard to keep the people that we have, but I don’t know if that’ll work or not,” said Joe Bergen of Hot Saw Logging.

Diedrich Fehr of D Fehr Contracting says he has two trucks left, and he’s driving one of them.

“So, I’ve got no operators, except one loader operator right now, but that’s going to come to a screeching halt here right away,” Fehr said.

Facing their employees to tell them there’s no work is stressful and heartbreaking, the contractors said.

They’re seeing spin-offs in the community as well, not just the businesses that directly supported the logging industry such as tire shops.

“We live in a natural resource sector area, and there’s no more natural resources,” said Hot Saw’s Paul Bergen.

It wasn’t always this way.

The future was bright

In fact, when many of these companies got started, the future of forestry in the North Peace was very bright indeed.

As a significant part of the region’s diversified economy, forestry helped end the dependence on the boom-and-bust cycles of the petroleum industry.

“Our economy is one of the most diverse in the province. If there is a serious downturn in one sector, it will cause serious problems to individuals and businesses in other areas. But here we’re in a situation where, because we have diversification, we are much better positioned for the future.”

Steve Thorlakson - NWB Magazine May/June 2000

Twenty-four years ago, the North Peace was poised for major success and then-mayor of Fort St. John Steve Thorlakson anticipated that within 15 years, Fort St. John could be the size and have the cosmopolitan nature of Grande Prairie.

Not only were there two lumber mills in the region – in Fort St. John and Taylor – but Louisiana-Pacific was proposing to build four facilities in the Peace, including an oriented strandboard plant, a veneer mill, and an I-joist mill. Slocan Forest Products was also planning to add an OSB facility in addition to its pulp mill in Taylor.

“The potential there is absolutely staggering,” Thorlakson said at the time.

“Our economy is one of the most diverse in the province. If there is a serious downturn in one sector, it will cause serious problems to individuals and businesses in other areas. But here we’re in a situation where, because we have diversification, we are much better positioned for the future.”

Despite Thorlakson’s optimism, some leaders were concerned that the then-NDP government’s policies and the softwood lumber agreement which was due to expire in 2001 would have a negative impact on the industry.

At the Northern Forest Products Association convention in April 2000, then-premier Ujjal Dosanjh said that his government wanted to create a “modern, market-responsive industry that can compete and win, creating profits and prosperity for businesses, enriching the future of our forest communities and families for today and tomorrow.”

Tomorrow is here, and as Zimmer pointed out, 24 mills have been lost in the province since 2016, “and it hasn’t stopped.”

Of those 24 mills, five of them are in the Peace – Chetwynd’s two mills, the lumber and pulp mills in Taylor and now Canfor FSJ. That leaves the Louisiana-Pacific plants in Fort St. John and Dawson Creek as the only forestry facilities remaining in the region.

At that NFPA convention in 2000, former Canfor president and CEO, David Emerson laid out what could happen if government and international trade policies aligned in a negative fashion.

“Capital is mobile. If you can move to Washington state or Alberta to put in a value-added facility, or a high-tech business - and it’s more profitable – you’re going to do that.”

Dosanjh, somewhat prophetically summed it up: “When the forest industry falters, BC stumbles.”

Softwood Lumber Agreement

British Columbia is Canada’s largest producer of softwood lumber, providing more than 50 percent of total exports. The forest industry contributed approximately $17 billion to the province’s Gross Domestic Product in 2022 and supports over 100,000 direct and indirect jobs in BC, making it well worth the effort to have a softwood lumber agreement in place.

The Softwood Lumber Agreement with the United States expired in October 2015 and has not been replaced. Justin Trudeau’s Liberals came to power that year, and in BC, the NDP came to power in 2017 before a new agreement could be struck.

This lack of an agreement has opened BC’s forest industry up to legal challenges from the United States, whose Committee Overseeing Action for Lumber International Trade Investigations or Negotiations alleged in a petition to the US Department of Commerce in November 2016 that Canadian lumber is unfairly subsidized and dumped into the US market.

Having a softwood lumber agreement in place provides market certainty for lumber manufacturers in BC and throughout Canada, enabling the province to manage its forest resources and maintain access to the US market.

According to testimony by Kurt Niquidet, president of the BC Lumber Trade Council, when he appeared as a witness at the Standing Committee on International Trade on November 4, with no agreement the situation is only going to get worse, as the US plans to double the duties again, to over 30 percent.

“A good deal would be a long-term one that ensures access to the US market."

Kurt Niquidet, President of the BC Lumber Trade Council

In 2023, duties were eight percent, that nearly doubled in 2024 to 14.5 percent and are now set to double again to over 30 percent in August 2025.

“Our preliminary estimates, if duties double, is a reduction of 20 percent in economic activity,” Niquidet said.

The forest sector is very important to British Columbia, Niquidet explained. The duties have had a sizeable impact on the sector and have contributed to both lower production and job losses.

“We’ve seen since 2016 over 10,000 jobs lost, and that’s just direct jobs,” he said. There are spin-off effects, ripple effects from those job losses that multiplies those impacts.

In many rural communities, the forest sector is the biggest contributor to the local economy.

Forest industry on its knees

Through the Standing Committee on International Trade, the government is hearing from expert witnesses and those with years of experience in Canada’s forest industry.

The witnesses at CIIT said that Minister of Export Promotion, International Trade and Economic Development Mary Ng was doing a good job and working hard on the issue, but that higher level action is needed.

Jerome Pelletier, Vice-President, Sawmills and Chair of the New Brunswick Lumber Producers told the committee that resolving the softwood lumber issue is important for the survival of the industry. He suggested that higher level negotiators need to get involved.

He wants to ask Minister Ng and the Prime Minister to work jointly with all of each province’s “lumber associations and producers to develop a negotiation strategy and to encourage (the new) US trade representative to enter into a serious negotiation to resolve this long-term issue.”

“A good deal would be a long-term one that ensures access to the US market,” said Niquidet.

For many rural and forestry-dependent communities, time is running out. In the Peace, there’s less than a month before Fort St. John’s Canfor mill shuts its doors permanently.

Harder told the CIIT that the shutdowns have caused a 90 percent loss of jobs in this area alone, and businesses in the area that he’s talked to are experiencing 10 to 25 percent losses because people aren’t spending money.

“That’s pretty significant in our area,” Harder said.

It’s not just the tariffs that contributed to the issues the industry is facing in the Peace, Harder explained.

“Provincial legislation has definitely been a big problem. The tariffs are the just the straw on the camel’s back, so to speak,” he said. “It’s just unsustainable at this point.”

On top of provincial legislation and increasing duties, were the fires. Harder says loggers have been unable to harvest due to permitting and the unwillingness of the province to do anything.

“It seems unimportant to any politician to try to make anything happen going forward.”

For two decades, contractors have said that the Donnie Creek area needed logging – to help create fire breaks and access for fire crews in the event of a fire, Harder said.

“That was ignored for a very long time by our provincial government, which ended up being a large contributor to the 620,000-hectare fire, never mind Red Creek and Stoddart Creek fires on top of that.”

Yet the newly re-elected NDP government in British Columbia appears to be committed to continuing as they have been. Under the NDP’s watch, nine sawmills in the province have closed in the last two years.

“I never imagined a day that our forest industry would be in such a predicament.”

Mayor Lilia Hansen

The new Forests Minister, Ravi Parmar, plans to stick to the 2020 Old Growth Strategic Review, but says that ensuring the province has a vibrant and sustainable forest industry is a top priority.

Back in 2000, Stockwell Day, then-Canadian Alliance leader, advocated creating a common-sense approach to regulation, similar to the approach Conservative Party of BC’s leader, John Rustad promoted throughout British Columbia’s recent election.

Rustad, a former forestry worker, promised to restore certainty for the sector, enhance biodiversity, modernize stumpage, implement a “one project, one permit” process, review and identify all unnecessary costs to improve competitiveness, treat all fibre as valuable, manage landscape and wildfires, support labour and contractors.

Since British Columbia voters re-elected the NDP, none of Rustad’s plans to improve the forest sector will come to pass.

While Justin Trudeau and David Eby sit on their hands, the clock is ticking ever closer to the day when Canfor Fort St. John ceases to exist, taking hundreds of jobs in the community along with it.

Hi-Sky Enterprises’ Kelly Wilson summed the situation up well in Zimmer’s video:

“What is this part of Canada going to look like in five, ten, twenty years?”