Running on Empty: The BC Forestry Crash

The coming closure of a pulp mill in Prince George and the loss of 300 high-paying jobs is just the beginning of what promises to be a new and painful chapter for the province’s beleaguered forest industry, which has already lost more than 40,000 direct jobs in the past 20 years.

Other communities, including nearby Quesnel, will likely soon experience similar economic pain, all because of one thing: the relentless logging of the province’s forests.

Consider for a moment the massive Prince George Timber Supply Area, the largest forest administrative zone in British Columbia, a landmass larger than the Czech Republic.

Most of the readily accessible primary forests in that 80,000-square-kilometre land mass are gone, stripped of their green gold by the logging industry in the space of just 50 years.

It is hard for many British Columbians who live in cities far to the south of Prince George to even grasp the size of the province they live in, let alone just how much of its natural endowment is gone.

For those choosing to look, satellite images provide a good starting point.

But a true appreciation comes from being on the land. It is only then that the scale of what has unfolded hits home.

Trucks in the night

On the ground last July, I had plenty of opportunity to see what was happening in the Prince George TSA, including standing in a remote patch of old-growth forest that was just months away from being logged. The patch, west of the community of Fort St. James, was by no means in the remotest reaches of the sprawling TSA, but far enough out that it would take more than eight hours for a logging truck driver to make one return trip to Prince George.

I left that soon-to-be-gone forest in the gathering dusk of a summer evening and was on the highway near midnight as I watched an empty logging truck go barrelling by, its red taillights soon swallowed by the darkness in my rearview mirror.

I saw a dozen more such trucks that night all heading the same way on just one short stretch of road linking Fort St. James with the Yellowhead Highway.

While I was tired, I couldn’t help wondering just how much more tired those truck drivers were. Where were they going at that late hour? When would their working day end and the next one begin? When would the distance from mill to forest become so great that no amount of money would justify paying for such long hauls?

Shortly after Canfor announced that it was axing pulp production at Prince George Pulp and Paper (the mill’s paper machine will still operate, supplied by one of Canfor’s two remaining Prince George pulp mills), Mike Morris, BC Liberal MLA for Prince George-Mackenzie set out the truth about the closure.

“Those who know me have heard how I predicted this. I have driven extensively through Interior wood supply areas, studied the fibre supply in B.C. and have seen this result coming for the last several years,” he said. “This shouldn’t come as a surprise. We need to change our forestry in B.C.”

Robbing Peter to pay Paul

Morris, who has been a trapper, hunter and angler for years has seen more forest than most British Columbians ever will and is a strong advocate for protecting what remains of the Interior region’s once teeming biodiversity.

In November 2021, he gave a comprehensive, notably non-partisan speech in the legislature detailing decades of failed forest policies that have brought us to today’s tipping point.

He lives in Prince George, but is intimately familiar with the other community his riding represents — Mackenzie, a town that is a poster child for the forest industry’s overreach.

Twenty-five years ago, five sawmills, a pulp mill, a pulp and paper mill, one finger-jointing plant and a chip plant operated in the community. Today, almost every one of those mills is gone.

Much of the gutting of that forest industry town occurred in the early 2000s.

But the closure of those mills and the loss of 1,500 or so jobs didn’t stop the looting of Mackenzie’s forests. Having “right-sized” (Canfor’s terminology) operations in Mackenzie, companies now trucked logs past the mills they had closed to those they still owned in Prince George, or Quesnel, or Williams Lake or Vanderhoof.

Peter was robbed to pay Paul until Peter’s pockets were so thoroughly fleeced that Paul had to find someone else to steal from or go hungry.

Over the decades, provincial governments of all stripes not only condoned such behaviour but actively encouraged it with a suite of subsidies that effectively punted the problem down the road.

The evidence has long been clear that a supply crisis loomed. But rather than reduce logging rates immediately so as to avoid an even worse day of reckoning, provincial governments have for decades elected to roll the dice, keep logging rates artificially high and gamble that the carnage would happen on someone else’s watch.

Pesky beetles and a Ponzi scheme

The most significant of those subsidies occurred in the late 1980s and again in the early 2000s, when the governments of the day approved massive increases in logging rates in the name of “salvaging” economic value from forests attacked by mountain pine beetles. Canfor and West Fraser, the two largest forest companies in B.C.’s Interior, were only too happy to oblige, having built some of the largest sawmills on the planet.

Those logging increases lasted for years and resulted in tens of millions of additional trees being extracted, most of which were more than good enough to turn into lumber and other wood products.

The companies doing that bonus logging paid the government the bare minimum in fees known as stumpage, which was 25 cents per cubic metre (one cubic metre equalling an average wooden telephone pole in size).

Every year since 2006, successive provincial governments also presided over another subsidy program known as “crediting.”

Anthony Britneff, a former registered professional forester and long-time senior employee in the provincial Ministry of Forests, charitably calls that program a Ponzi scheme.

Here’s how it works:

Companies that deliver “lower quality” wood from a logged forest to a pulp mill or a wood pellet mill get to apply to the Ministry of Forests for “credits” that allow them to go back into the forest and log an equivalent volume of trees again, with no restriction on what kind of trees are logged the second time around.

Magically, the “credit” trees don’t count toward the tallies used by the provincial government to limit what logging companies take from the forest each year (a ceiling known as the Annual Allowable Cut).

For a company like Canfor, the credit program meant that it was rewarded for delivering untold thousands of cubic metres of “lower quality” logs to its own pulp mills with even more forests to cut down and logs to deliver to its sawmills.

The provincial government won’t divulge how many additional trees have been cut down as a result of the credits. But we do know it’s well into the millions. In the Prince George Timber Supply Area alone, publicly available government data shows that within just one five-year period, nearly 2.5 million cubic metres of additional logs came out of the region’s forests as a result of the crediting scheme.

Over nearly two decades, those bonus logs helped prop up local sawmills, pulp mills and pellet mills alike, but at the expense of further depleted forests.

Moving logs with tax dollars

Then there’s the Forest Enhancement Society of BC, a creation of the provincial government.

The society has doled out millions of taxpayer dollars either directly or indirectly to wood pellet and wood pulp companies over the years, allowing them to underwrite the costs of getting “residual” wood fibre to their mills. But that has led to economically and ecologically absurd results.

Consider the Domtar pulp mill in Kamloops.

It recently benefited from Enhancement Society funds that underwrote the costs of delivering wood from logging operations in the Port Hardy area on north Vancouver Island.

Without those subsidies, there was no business case for the pulp mill getting wood that had to be barged and then trucked more than 800 kilometres from remote coastal rainforests to the dry belt zone in the province’s southern Interior.

Subsidies like these have made it possible to move millions more logs to the forest industry, but at the expense of accelerated loss of the province’s primary and old-growth forests. The longer the subsidies persist, the deeper the pain down the road.

An added and significant wrinkle in all of this is that as the pine beetle logging began to take off, so did an entirely new wood-consuming sector of the forest industry.

A burning problem

Since its inception in 1989, the wood pellet industry in the province has morphed into a major consumer of wood fibre, on top of the already considerable number of logs being consumed by the province’s lumber and pulp mills.

At the beginning, the first few pellet mills were small and used almost entirely waste wood in the form of chips, sawdust and wood shavings from nearby sawmills and panel mills to make their product. Today, however, B.C.’s pellet industry consumes the equivalent of five million cubic metres of logs annually and most of its output is controlled by Drax, a U.K.-based company that burns millions of tonnes of wood pellets each year to make thermal electricity.

The rapid expansion of this industry has pitted pellet makers against pulp makers for a finite supply of “residual” wood chips and sawdust produced at sawmills.

But with fewer and fewer sawmills (roughly 100 mills have closed in B.C. in just 20 years), pellet and pulp companies alike have been forced to turn more and more logs directly into either pellets or pulp — something that both the CBC and BBC highlighted recently in two investigative news documentaries. The documentaries raised questions about whether those logs could be used to make solid wood products instead, something that would generate more jobs and result in far fewer greenhouse gas emissions than those associated with burning pellets.

That patch of old-growth forest I talked about at the outset of this piece? It was turned over to none other than Drax to log. As noted by Prince George-based Conservation North, the licence giving the company the right to log that forest was granted by the provincial government, and gave Drax tremendous leverage to work with sawmilling companies to get huge amounts of wood fibre into one or more of the eight pellet mills Drax owns or co-owns in the province.

We’ve heard this before

The pellet industry’s growth has unquestionably intensified pressure on our forests and is contributing to the collapse now underway.

Canfor’s recent actions underscore this point.

Two years ago, another milling operation in Prince George, the Pacific Bioenergy wood pellet mill, of which Canfor was a partner, closed its doors.

The mill used the same wood fibre as Canfor’s three pulp mills in Prince George.

With only so much wood to go around, the decision was made to close the pellet plant.

Now, one of Canfor’s three Prince George pulp mills is gone too.

And more mill closures almost certainly await.

The big question now is what will rise from the ashes. The provincial government says that one way out of the mess is to get the forest industry to add far more value to the products it creates. In other words, to do a lot more with a lot less wood fibre.

Doing so is clearly needed. But we have heard this over and over again over decades from one government after the other.

How many more forests must disappear, how many more jobs must vaporize, before our elected leaders stop talking about aspirations, targets and intentions and actually do something?

Maybe this time they will (a new, modest $90-million program announced Tuesday by the province to support “high-value” industries suggests so).

But will it be enough? It’s hard to add value when most of the best forests are gone.

Ben Parfitt is resource policy analyst for the Canadian Centre for Policy Alternatives B.C. office.