Stikine, British Columbia, MLA questions Pacific BioEnergy's tenure of 88,000 m3 of logs through ownership of bankrupt Kitwanga Sawmill, says logs could be exported, processed elsewhere
TERRACE, British Columbia
January 4, 2012
– A LOCAL NDP MLA is calling foul about owners of a bankrupt mill retaining rights to ship raw logs from the Kitwanga area – saying the Liberal forest policy enabling this is unfair to unemployed mill workers.
Stikine MLA Doug Donaldson says Pacific BioEnergy, the parent company of defunct Kitwanga Sawmill owner Kitwanga Lumber Co. Ltd. which filed for bankruptcy protection last month, still has tenure to 88,000 cubic metres of forest it could potentially log.
Donaldson has long pushed for raw logs to be processed on homebase first, and says a company being able to retain logging rights it doesn’t have to process here is a case of the Liberals’ job action plan failing yet again. He said raw log exports, which have skyrocketed in the last two years, are responsible for a lack of processing jobs here at home.
“Part of the blame for that is on the province because of the policies around raw log exports,” said Donaldson. “It’s a real slap in the face for the communities and the workers.”
Donaldson went on to paint a picture of jobless industry workers in Kitwanga, right around the holidays, watching trucks filled with raw logs roll by on their way to China.
“There has been a dramatic increase in raw log exports under the B.C. Liberal government in the last two years,” he said. “In the last year to year it’s been a 200 per cent increase.”
Donaldson said the optimal scenario is “B.C. logs for B.C. jobs,” meaning the implementation of policy that means more processing happens on homebase, creating secondary jobs here.
This, simply put, would mean fewer raw logs shipped and more lumber and other manufactured wood products exported.
But Liberal forest minister Steve Thompson said the mill’s closure and subsequent job loss is not related to forest policy.
“I think the mill owners have been clear that the mill closure was due to the overall economic conditions in Canada and the U.S.,” he said. “Log export policy in many cases is providing continued employment ... throughout the province.”
Thompson continued that the Liberals have been working to build new markets for B.C. lumber in Asia, to be shipped through the Asia pacific gateway. He used B.C. premier Christy Clark’s recent trade mission to China and Japan as an example.
And talking to forestry veterans in the Northwest area, finding and creating markets for lumber (which is a processed wood product) is important, because there isn’t enough business yet for many regional sawmills to sustain a profit.
This means that without raw log exports, there might not be many jobs in northwest forestry right now.
“It’s pretty obvious that in the area there are no sawmills operating,” said Terrace-based forestry veteran David Rice.
Rice said speaking to this topic is particularly tough for him because the community and therefore industry job numbers here are close to his heart.
But, from a technical perspective, he said in current economic conditions even if there was a policy stating companies who log must also manufacture, there might not be anyone to sell those manufactured products to right now.
“What we do have going for us is we do have some timber and there’s an opportunity to produce jobs through raw log exports,” he said.
In terms of alternatives, he said, looking into timber profiles to determine if there’s a sort of log quality that can be used to manufacture specialty products is where the industry is at in terms of bringing log-processing jobs home.
“Is that a possibility? Of course,” he said. “Can I tell you conclusively that it’s going to work? No.
“To stem the tide, we need to look at better optimization and market opportunities where we can manufacture logs and supply niche markets or higher value markets,” he said, adding it’s hard to keep a company in the green if a product, like manufactured wood, isn’t selling.
The key now is to find out what buyers need that can be supplied.
And in Kitwanga’s case, Pacific Bioenergy vice president Brad Bennett has said it was the raw log sales that supplemented the sawmill’s operating costs while it was open.
The Kitwanga Sawmill closed its doors Oct.7, three months shy of its opening.
Mill owner Kitwanga Lumber Co. Ltd filed for bankruptcy protection Dec. 7 after efforts to find niche markets for specialty manufactured wood products proved unsuccessful — a result driven by unfavourable economic conditions.