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Two more sawmills close. Now what?

By Tania Millen of SNCIRE

In late October, Northwest BC was hit with the news that sawmills in Houston and Moricetown would be closing. Kyahwood Forest Products - Moricetown's sole industrial employer - closed in October while the West Fraser sawmill in Houston, Houston Forest Products, will shut its doors in May 2014. Let's look at what happened.

There are two large mills in Houston – one operated by West Fraser, the other by Canfor – and each have access to a portion of the surrounding forest resources (Timber Supply Areas or TSAs). However, the wood in their TSAs is increasingly composed of rotting trees killed by mountain pine beetles. Realising that eventually the TSAs wouldn't support two mills, it appears Canfor and West Fraser struck a deal.

That deal essentially consists of West Fraser and Canfor trading forest resources in Houston and Quesnel, where they both operate, and each closing one mill. So in Houston, the Canfor mill gains forestry resources and will continue to operate, while the West Fraser mill closes. And in Quesnel, the West Fraser mill gains resources and will continue to operate, while the Canfor mill closes. A simple switcheroo that helps the remaining mills cope with the coming reduction in timber supply. This makes good business sense, but it will still be hard on the communities.

The Kyahwood closure is a little different. The Kyahwood mill is owned and operated by the Moricetown Band and produces finger joint studs for the North American housing market. Reportedly, the mill closed due to debt resulting from high transportation costs, both for source wood from Houston and to get products to market. But unlike Houston, which has another mill in town that will continue to employ residents, Kyahwood is the only employer in Moricetown. So closing the mill, which employed 71 community members, dramatically affects this First Nation community. Knowing this, Kyahwood is apparently exploring whether they could make additional products, presumably in the hopes of serving Northwest BC buyers, and lowering product transportation costs.

Two towns in Northwest BC, two closures. What's next?

A few thoughts come to mind.

Companies continue to take advantage of the natural resources that Canada is blessed with. We're good at exporting raw materials. It's easy. We're also good at manufacturing fairly simple products. However, the real value is in creating specialty products which utilize the skills of a variety of people and can be made in many communities. Yes, the 'value-added drum' has been beaten to death. So the trick in the new economy is to add innovation and technology – that's where there's high value. Simply one value-added solution won't work – we need industry players to collaborate and form a cohesive network of complementary products. Maintaining the status quo isn't keeping people working. So let's focus on innovative ideas in the forest sector.

Related to that is the need - now more than ever - for research that builds knowledge about our forest assets. New information will allow future entrepreneurs to thrive, thereby increasing the sustainability and resilience of communities. To that end, Skeena-Nass Centre for Innovation in Resource Economics (SNCIRE) is working with universities and FPInnovations – a large private Canadian non-profit forestry research centre – to research challenges specific to Northwest BC forest resources.

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Photo from kyahwood.com