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  • Canfor: Stop the wailing. Government: No more bailouts.

    Fred Marshall

    BC's logging industry went from boom to bust (again) in a matter of months. Let's not do the same thing as we usually do and then expect a different result.



    What BC logging companies do in the southern US (above) looks remarkably similar to what they do in BC. The big differences are that in BC, the trees are publicly owned and the companies are highly subsidized.


    A JANUARY 16 ARTICLE by Nelson Bennett stated that: “Alberta oil and gas producers made windfall profits on high oil and natural gas prices and B.C. forestry majors banked some record profits on high lumber prices in 2022.”

    Record profits? Didnt Canfor just close a mill with the loss of 300 jobs due to poor market conditions?

    Any prudent person or wise company would, after making record profits for consecutive years, put some money aside for potential future market slumps. Or at least they should. The occurrence of such business cycles is not only expected but should be anticipated and prepared for. Rainy days always happen.

    When companies regularly disburse their profits to shareholders or spend them on purchasing foreign timber companies, these are their business decisions and they must accept responsibility for them.



    Is this the record of fluctuating timber supply in BC? No, its the record of price fluctuations for wood products since 2020. Low prices generally trigger a call by industry and workers for greater government subsidization, lower stumpage rates and less conservation. Usually, government caves in to the pressure.


    However, when they instead insist the BC government should bail them out of a business slump with monetary grants or with more and cheaper fibreso they can continue making record profits and, again, disburse them to shareholders and buy more foreign timber companies—this pressure should be ignored.

    The situation these companies are in was created by them and the people of BC should not be expected to bail them out.

    In a recent article about the closure of Canfor’s pulp and paper mill in Prince George, Hiren Mansukhani quoted Ben Parfitt: “When you see the company talking about lack of access to cost competitive fibre, that really translates into one very simple thing. There are not enough trees remaining to be logged that have sufficient commercial value to support the industry…Companies are having to go further and further and further in search of logs.”

    Ben is right, but that’s not the full story. The companies actively participated in the process that caused the demise of their enterprises. The BC government is only at fault to the extent that they provided the companies with various ongoing subsidies, and that enabled the companies to operate profitably for many years. The companies now want their usual level of subsidies to not only continue, but to be raised. Raised significantly.

    The government should never have provided such generous public assistance (funds and fibre) to private companies in the first place.

    And government should not continue to do so now as this would only delay the inevitable and much more painful collapse that will happen in the near future.

    Helping any company to continue harvesting an ever diminishing supply of trees in BC is neither economically sensible nor environmentally wise. Nor is it in the best interests of the people of BC.

    Firmer direction by government is especially needed since the forest companies created their problems when they invested in and purchased over 45 foreign mills, most of which are in the southern US. The land there is flat, so logging costs are lower than in BC. The weather there is warm and wet and that means annual growth in the forests often exceeds ten cubic metres per hectare. Labor is cheap.

    Now with timber supply increasingly distant from their BC mills, Canadian companies can only compete with their own US mills if the BC government continues to bail them out with subsidies.

    Enough. Our government should ignore the logging industry’s lamentations and requests for ever more handouts.

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    They weren't listening Fred. A government press release today announced $90 million over three years in new subsidies for the industry. The government is calling this one the "BC Manufacturing Jobs Fund".

    The fund "will support high-value industrial and manufacturing projects to drive clean and inclusive growth in rural, remote and Indigenous communities." But only for the logging and wood products milling industries.

    The kinds of hypothetical manufacturing jobs being subsidized are described in a paragraph: "For example, the BC Manufacturing Jobs Fund may provide funding to a forestry company that needs to buy new equipment to support new product lines, such as mass timber production or paper packaging, or smaller-diameter tree processing and manufacturing, or a company that wants to build or expand a plastics-alternative manufacturing facility in a rural community."

    The release noted that "The fund is in addition to the $185-million support package announced in Budget 2022 to ensure that co-ordinated and comprehensive supports are in place to offset any economic impacts from a changing forestry industry."

    That's another $275 million in public money to enrich the shareholders of logging companies just because the market value of wood products went back to normal.

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