How Monster Mills Ate BC’s Timber Jobs

When the world’s biggest sawmill opened its doors on Feb. 9, 2004, then-premier Gordon Campbell enthused that it could shoot out enough lumber to build all of British Columbia’s new annual housing stock, which was then averaging 26,000 units per year.

After the ribbon was cut and the first logs passed through its computerized scanners and whirring sawblades, the mill’s owner claimed it might produce 600 million board feet a year — 25 per cent more than its closest global rival, a lumber mill in Germany.

Just 20 years later, however, the super-sized mill is set to close — another casualty in a province and industry that went all-in on the idea that bigger is better and must now live with the consequences.

Located in Houston, a three-and-a-half hour’s drive west of Prince George, the jumbo mill is owned by Canfor, a company that has made headlines in recent weeks — but this time, not for ribbon cutting.

On Jan. 11, the company notified pulp mill workers in Prince George that their jobs would soon be gone. Then on Jan. 25, it announced it was permanently closing a sawmill and wood pellet mill in Chetwynd and indefinitely closing its super mill in Houston.

The latest mill closures will result in the loss of nearly 500 of some of the highest-paying jobs in Houston and Chetwynd, communities with populations of roughly 3,000. Other job losses will likely follow.

‘A wholesale slaughter’

Bob Simpson, a former provincial MLA, one-time forestry critic, and former mayor of Quesnel, says in the communities where mill closures have been announced a “wholesale slaughter of family incomes is now underway.”

People foresaw 20 years ago that the slaughter was coming.

The day after operations commenced in Houston, the Globe and Mail’s Peter Kennedy reported that the new super mill posed risks.

Smaller mills were going to find it “increasingly difficult to get raw logs for processing,” Kennedy reported. And the squeeze wouldn’t come just from one super mill.

“These mills,” Canfor’s then-CEO David Emerson told the Globe and Mail, “are part of our future in British Columbia.”

That future would be dominated by big companies that, like Canfor, had access to the capital needed to build super mills, had amassed licences to log vast stretches of B.C.’s forests, and whose prodigious lumber output allowed them to reliably supply big box retailers in the U.S. like Home Depot and Lowe’s.

And it would spell disaster for dozens of smaller mills across the province that would close their doors in the ensuing years as the Canfor super mill and a number of other big mills monopolized the log market, forcing their smaller competitors out of the business.

The pine beetle outbreak leads to heavy harvesting

Houston’s super mill arose out of a $26.4-million retrofit of an existing mill.

New computer technology was deployed to guide the scanning and cutting of logs to maximize how much lumber was recovered.

The upgrades also ensured that production at one or more of the mill’s four lines could be quickly readjusted to produce different dimensions of lumber, should demand for specific kinds of boards rise.

Overall, the investments reduced the costs of logs processed at Houston by 24 per cent — a significant achievement in any industry that produces commodities. Canfor’s rivals didn’t stand idly by. Before long, West Fraser, Tolko, Carrier and Dunkley all did the same thing.

What emerged, as captured in provincial government reports, were eight super mills that could push out an astonishing amount of lumber. In 2020, the most recent year for which records are available, those eight mills spit out enough lumber to circle the Earth more than 24 times.  

The arrival of the super mills was propitious. A beetle outbreak had surged across a wide expanse of the province, killing tens of millions of lodgepole pine trees.

In response, the government allowed logging companies to vastly increase the number of trees they cut down each year. The thinking then was to extract the value from the dead pine trees quickly, before they deteriorated too much and became unusable for lumber.

In the forest, the accelerated logging was mostly done in highly mechanized operations where one person sitting in the cab of a feller-buncher machine moved steadily through the forest grabbing one tree after another, cutting them at the base and throwing them to the side — operations that displaced the work once done by numerous hand fallers or loggers.

The felled trees were then trucked to the highly automated sawmills, which required more logs to support each mill job, thanks to the upgraded technology.

What ensued was a form of strip-mining. And it wasn’t just dead pine trees that fell, but healthy trees as well. (This pattern was later repeated when another pest, the spruce bark beetle, started killing spruce trees.)

“Unfortunately,” Simpson says, “logging during the spruce beetle outbreak led to so many good spruce trees coming down that it further eroded the forests and deepened the midterm timber supply crisis now enveloping the lumber industry.”

That crisis has translated into a slew of mill closures. When the Houston super mill opened there were 194 large, medium and small sawmills in B.C. By 2020, that number had been almost halved and stood at just 111 mills.

No company escaped unscathed, including Canfor. In 2004, it operated 16 sawmills in B.C. With the pending closures in Chetwynd and Houston, it will be down to just seven. 

Meanwhile, the company has purchased numerous sawmills in Alabama, Arkansas, Georgia, Louisiana, Mississippi and North and South Carolina — southern U.S. states where planted trees grow in a fraction of the time they do in B.C. and where workers’ wages and benefits trail behind those here.

The bumpy forest service road ahead for workers

Jeff Bromley, chair of the United Steelworkers Wood Council, said it has been a fact of life in the province since the late 1980s that “more fibre is being produced with less people.”

But he also says that the pain felt by rural communities has been exacerbated by provincial governments that retreated from the idea that trees taken from publicly owned forests should be turned into forest products close to where they were logged.

This was government policy for decades before it was scrapped by the Campbell government around the time that the Houston super mill came into existence.

With that policy abandoned, Bromley says companies closed mills and moved logs greater distances.

“You could truck wood from Fort Nelson to Fort St. John. You could truck it way longer distances,” Bromley says. “That’s just the reflection of the industry today. The hauls are longer and longer. I’ve heard about hauls now of 15 hours.”

Bromley says that there is some hope that Canfor may invest in a new mill in Houston at a projected cost of $200 million. But an investment of that magnitude will require approval by the company’s board of directors, a decision that won’t come until at least the late spring.

If the project does proceed, Bromley says it will likely be two years before a portion of the unionized workers who lost their jobs in Houston are back working again. According to Canfor, if the new mill is built it will produce higher-value products but use less raw material to make them.

Bromley says while it’s “obviously a good thing to get more out of the resource,” workers in value-added facilities frequently don’t receive the higher wages, pensions and benefits that his union’s members enjoy in the mills they work in where, Bromley stresses, a lot of high-value products are already made.

“I maintain that if the industry shifts in that direction, it should be with union workers,” he says.

Where are the innovators?

When he was mayor of Quesnel, Simpson presided over a community with one of the highest per capita levels of forest industry investment in the province. Two pulp mills, a number of sawmills and other processing facilities including a value-added mill and wood pellet facility can be found either in or near town.

Simpson says Canfor should not be allowed to do in Houston what it did 18 years ago in Fort Nelson. In 2005, Canfor closed two panel mills in the community and 600 people lost their jobs.

Yet Canfor continued to hold its government-granted logging licence — even though the community asked the provincial government to take it back.

A little more than two years ago, Canfor finally sold its Fort Nelson forest licence to Peak Renewables, a company headed by Brian Fehr, a businessman with longstanding ties to Canfor.

Peak proposes building what would become Canada’s largest wood pellet mill in Fort Nelson. It’s a move that the United Steelworkers, Unifor, and the Public and Private Workers of Canada — all of whom represent forest industry workers — characterize as bad for both forest industry employment and the climate.

As few as 60 people would work in the proposed pellet operation, which would require roughly 1.2 million cubic metres of aspen trees to be chopped down every year to supply it — in the neighbourhood of the amount of wood consumed at the Houston super mill, which employs five times as many people.

The pellet mill has yet to materialize, however. In the meantime, small amounts of logs are once again coming out of Fort Nelson’s forests. But what is coming out is getting trucked 400 kilometres south to Fort St. John.

Simpson says Houston should not suffer a similar fate. “The provincial government has to answer the question: If Canfor is not going to be the innovator in Houston, who can be?”

The list of possible innovations runs deep, Simpson says, and includes working with hardwood trees, such as alder and aspen, which were historically treated with such contempt by the industry that they were often cut down and burned; increasing production of engineered wood products, which can be made from younger trees; and creating a wider array of pulp mill products, including “bioplastics” made of wood instead of oil and asphalt additives that replace bitumen.

Simpson cautions that none of this will happen quickly.

“You can’t just say we’re going to stop doing this tomorrow and start doing that the day after,” he says. But it can happen.

He cites as one example the announcement this January by Paper Excellence that it will invest roughly $30 million and another $20 million from the federal and provincial governments to reopen a paper line at a Vancouver Island mill. The line is slated to make water-resistant papers that can be used to make products that replace one-use plastics.

The announcement came only months after the company had announced in October of last year that it would halt paper production at the mill indefinitely and that 150 jobs would be lost. With the restarting of paper production at the mill and the retooling of the paper line to produce the higher-value paper, 100 workers were notified in January that they were back on the job.

An antidote in Witset, BC

The Seaton Forest Products Ltd. mill is located just over a half hour’s drive north of Smithers along the Yellowhead Highway.

Four-fifths of the mill’s 24 employees are Gitxsan or Wet’suwet’en Nation members, many of whom live a short distance away in the community of Witset.

At a quick glance, what Seaton does with its logs may seem unremarkable.

The mill cuts the round edges from two sides of each log, then flips each log a quarter turn and cuts the remaining round edges off. What’s left are big rectangles of rough-cut wood called cants, which are shipped to other mills for further processing.

But it’s the logs that Seaton works with that makes it unique. Almost all of its logs come from trees that are dead and many of them also have defects. As a result, they are typically rejected for use by the companies that operate the region’s large sawmills.

In years past, that rejection meant one thing: the dead trees that were logged were pushed into piles along with the slash and other debris at logging sites and then burned.

By working with the region’s major forest companies, including Canfor and West Fraser, as well as with smaller logging contractors, Seaton’s owner, Andy Thompson, convinced them to separate the dead logs into special sorts so that they could be trucked to his mill instead.

Until last year, Thompson says, most of the cants made at Seaton were shipped from Prince Rupert to China, where they were re-cut. But in January, 2022, Seaton entered into a supply agreement with the San Group, which invested more than $100 million to build a new high-value processing plant in Port Alberni.

Significantly, that investment was the first involving a new mill on B.C.’s coast in decades and is in a community where ocean freighters routinely arrive to take away tens of thousands of unprocessed raw logs at a time from a province that still exports millions such logs each year.

Some of the highest-value products made by the San Group involve re-cutting Seaton’s cants, then laminating them with veneers, or thin cuts, of coastal red cedar, which vastly increases their value.

Each year, Seaton requires about 80,000 cubic metres of logs to keep its workers employed, meaning that for each job at the mill roughly 3,300 cubic metres of logs must be found. At the Houston super mill, by comparison, more than 5,000 cubic metres are needed to sustain each mill job.

Not only is Seaton creating more jobs with less raw material, but the cants it produces are then remanufactured at another B.C. mill, further increasing the number of jobs generated per unit of wood processed.

“To me, it’s a no-brainer. The government says it wants to see more value-adding in our province. It also says it wants to see more First Nations people working in resource industries. Well, we’re doing both right here,” Thompson says. 

The way to make sure that continues is to turn more natural resources like forests directly over to First Nations — something the government also says is a priority.

Thompson believes if that happened in the Bulkley Valley, members of the Witset First Nation would be only too happy to ensure that any logs the nation controlled went to a mill where its members worked.

It would be something of a return to the days before the super mills, when provincial policy expressly said that local forests were supposed to be there to provide local benefits. But with the added twist that First Nations are expressly dealt in — not out — of the equation.