Category Archives: Opinion / EdiTOADial

Opinion / EdiTOADial

We came into 2024 with high hopes but how things have changed: ERA Analysis

By Kevin Mason, Managing Director
ERA Forest Products Research
May 3, 2024
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

We came into 2024 with high hopes: The COVID pandemic and its aftereffects were finally confined to the rearview mirror; energy shocks following Russia’s invasion of Ukraine were behind us; Fed rate cuts were seemingly imminent; and, after a year of “hurry up and wait,” the next U.S. housing up-cycle would commence. How things have changed! Expectations around Fed rate cuts have shifted dramatically in recent months, reflecting myriad negative macroeconomic developments. …If we enter a period of stagflation, wood products producers would be one of the more obvious losers in the Forest Products sector. Elevated interest rates stymie housing demand, negatively impacting consumption. Timber REITS will also remain out of favour with investors in a higher-interest-rate environment, while sluggish demand for housing/lumber/panels will hit timber demand. For pulp producers, challenging economic conditions in China are a bigger near-term risk, but stagflation would hurt demand for all pulp end users.

It’s been a dire month for North American lumber markets, and, as has been the trend year-to-date, Southern Yellow Pine (SYP) continues to underperform S-P-F. SYP 2×4 prices slumped to $285 last week, their lowest level since November 2011. We suspect that even in the low-cost U.S. South, many sawmills are losing money at these prices. …For S-P-F, 2×4 prices are now in freefall after holding up relatively well through the first three months of the year. Prices have declined by $81 in the past four weeks and are trading at just $382 today. Prior sawmill downtime announcements, coupled with steady demand from new residential construction, supported S-P-F prices through Q1; however, this supply/demand balance has changed in recent weeks. …The incredible run in OSB appears to be over; prices in all major producing regions posted significant ($20–40) declines last week. …Despite not experiencing the same pricing uplift as OSB over the past several months—plywood pricing has been steady, if unspectacular—plywood prices are also moving lower, and the rate of decline accelerated markedly last week.

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Canada’s forest management has to adapt to climate change

By Tony Kryzanowski
The Logging & Sawmilling Journal
April 25, 2024
Category: Opinion / EdiTOADial
Region: Canada

Tony Kryzanowski

An early fire season is upon us in many parts of Canada already, and in some regions, fire fighter shortages abound. This alone demonstrates that forest management in Canada must change. Otherwise, expect huge swaths of forests to burn every summer from now on, as well as escalating costs for fighting fires, until the Canadian forest industry becomes a mere shadow of what it once was—or could be. But there is another way. It’s time to change our paradigm and view ourselves as gardeners rather than exploiters of the forest. Year round logging that includes a significant amount of variable retention as well as commercial and pre-commercial thinning to maintain a sustainable timber supply is not only necessary, it is inevitable as Canada transitions from natural forests to natural managed forests or plantations.

Continuing to spend vast amounts of money fighting forest fires is an insanely expensive, band-aid method to conserve Canada’s forests over the long term. Where government investment needs to happen now is in re-purposing a significant portion of money budgeted for fighting forest fires to forest resilience activities. …It is unfair to expect companies to adopt these expensive practices because of the length of their forest management agreements. It makes no sense to invest in these practices if there is no guarantee that the company will eventually reap the benefits down the road. So first and foremost, governments must consider longer forest tenure and management agreements of maybe a century or longer, carefully worded so that companies cannot escape liability for poor or negligent forest management practices. …Change or die. That may sound alarmist but the consequences of climate change are upon us. Intensive forest management or ‘gardening’ is our only hope.

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Sluggish start to US markets may delay product price recovery

By Kevin Mason, Managing Director
ERA Forest Products Research
March 5, 2024
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

After an encouraging finish to 2023, the U.S. housing market took a step backward to start the year, with weak starts in January and middling sales data offering no indication that the beginning of the next U.S. housing upcycle is imminent. U.S. home sales data for January were a little more encouraging than starts data, with seasonally adjusted new-home sales ticking up 1.5% month-over-month (MoM) and 1.8% year-over-year (YoY) to 661,000 units after the December data were revised lower to 651,000. It took longer than expected, but, after a sluggish start to the new year for North American lumber markets, we have seen a wave of sawmill capacity curtailment announcements this quarter. ……The capacity announcements will help tension lumber markets over time (perhaps Q2), while a seasonal uptick in demand around the spring building season should see prices migrate higher in the next couple of months.

In a significant deviation from more recent trends, the announced shuts in past few quarters have been spread across several major lumber producing regions, including the U.S. South and the Pacific Northwest, and have not been focused exclusively in high-cost British Columbia this time around. While it can take several months for a capacity closure announcement to actually impact market supply, these shuts will help to better balance North American lumber supply and demand over time (particularly if they coincide with green shoots appearing in the housing market).Against a backdrop of declining U.S. residential construction activity, North American OSB markets enjoyed a surprisingly strong year in 2023… [and] several North American pulp producers have announced new softwood price increases for March.

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It’s been a sluggish start to 2024 and the Middle East conflict is bringing more challenges

By Kevin Mason, Managing Director
ERA Forest Products Research
February 2, 2024
Category: Opinion / EdiTOADial
Region: Canada, United States, International

Kevin Mason

Notwithstanding expectations for slowing global growth in 2024, the new year has brought with it more challenges, including the extension of the Middle East conflict to the Red Sea. The re-routing of ships around the Horn of Africa is adding 10‒14 days to any Europe–Asia transit and impacting 10‒12% of global seaborne trade. Volumes through the Suez have dropped ~40% since the conflict began. …For many exports of pulp and paper & board, the change adds $20‒$60 per metric tonne to container costs in the near-term. Second-order impacts may include keeping more pulp (and paper) in Europe, depressing prices in that market, and keeping more paper & board in Asia, reducing pulp demand there. In other forest products, an interruption in log and glulam shipments from Europe last year drove Pacific Northwest log prices through the roof for the Japanese market; the same may happen again in this context. …If the disruption lingers, there will be significant first- and second-order impacts on the shape of markets in 2024.

It’s been a sluggish start to 2024 for North American lumber markets. …Lumber prices continue to languish. Supply reductions to date have been insufficient to tighten the market, but a short-lived spring rally is likely. OSB prices have held at profitable levels, but cracks are forming and new supply is coming to market (with delays). Rate cuts by the Fed are the overarching focus, with disappointment a possibility. We prefer lumber over panels for the next year or two but expect volatility across the spectrum.Pulp prices have been facing challenges in their biggest market (China), although prices have nudged up elsewhere. Closures remain a risk for the softwood market. Shipping issues are adding costs and complexity. Tissue producers should benefit from any price slippage, but their own topline prices are under pressure. 

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Trudeau’s pivot on carbon pricing shows need for rural policy lens

By Derek Nighbor, Forest Products Association of Canada
The Hub
November 28, 2023
Category: Opinion / EdiTOADial
Region: Canada

Derek Nighbor

Prime Minister Justin Trudeau’s recent decision to relieve home heating cost pressures in Atlantic Canada has initiated an important conversation about the challenges faced by Canadians living in rural parts of the country. …The groundswell of anger there would look familiar to anyone living in many other rural communities across the country. If anything, Trudeau’s announcement was a reminder of how smaller communities and their residents often get overlooked in the national conversation, and how we lack a coherent national approach to rural Canada. …We need to put more of a rural lens on the impacts of policy that’s created in Ottawa, much as we do for sustainability and other objectives. This isn’t just a matter of fairness. It’s in our national economic interest to ensure that rural Canada thrives. Most of the critical resources that make Canada a valued trading partner originate in rural parts of the country, not in cities. 

The same holds true for Canada’s green transition, with rural Canada at the centre of climate action efforts. For example, these communities see first-hand the impacts of worsening fires and are committed to protecting residents and critical infrastructure by actively managing forests. Politicians must think beyond urban voter bases to tap into the value that rural Canada brings to the wealth of our country. …It all starts by making rural communities viable places to live. Second, it’s imperative we get the policy frameworks right to ensure rural regions remain economically healthy. …Rural Canada—home to key industries like forestry, agriculture, mining, fisheries, and energy—makes up about 30% of the country’s GDP and an even bigger share of our exports. To seize the potential of a prosperous rural Canada of tomorrow that delivers for all Canadians, we need to start by recognizing the tremendous value these regions bring to our country and take strong actions to keep them vibrant and viable.

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Forest Management in Finland – Learnings for BC Forestry

Cam Brown, Strategic Planning Forester / Manager
Forsite Consultants Ltd.
November 9, 2023
Category: Opinion / EdiTOADial
Region: Canada, International

Cam Brown

Imagine a forest industry championed by its government and people – a source of great pride, deeply valued and ingrained in the culture and character of the country. Guided by a clearly stated and regularly updated vision that embraces a changing world and new information. An industry integrated with the systems and infrastructure of public services, and at the forefront of technology and innovation. An industry sustainably managing forests while reducing the risk of wildfire and pest outbreaks. An industry functioning as a part of a holistic and sustainable bioeconomy. A group of BC Foresters recently travelled to Finland on a study tour led by UBC Forestry to better understand the history, practices, motivations and objectives which have led to Finland’s world-class forest sector, supporting a proud and vibrant society. [Although] many aspects of Finland’s forest sector are different (extensive private land ownership, greater resolution of indigenous ownership, more homogenous ecosystems, gentle topography, extensive road and bioenergy infrastructure, etc.), there are still many ideas that are relevant in the BC context.

…Short-term wins can be achieved in BC simply by increasing thinning across a range of forests to enhance multiple values. This includes partial harvesting focused on fire risk reduction, improved Dry-belt Fir management, and accessing fibre in visually constrained landscapes. Implementing partial harvest strategies can help solve many of the key friction points in BC forestry right now – community safety/wildfire risk, fibre supply for mills, ecosystem health and biodiversity, and a focus on stand value over volume. We need policy solutions to encourage this type of investment. Indigenous reconciliation and climate change adaptation (i.e., fuel reduction) are primary forces driving the need for fundamental changes. We must create a more economically robust, socially acceptable and vibrant forest sector built on a solid foundation of healthy and resilient forest landscapes. Embracing some of the wisdom behind Finnish forestry is part of the solution.

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It’s been a rocky ride for the US housing market in 2023 and the lumber market remains stuck in the mud

By Kevin Mason, Managing Director
ERA Forest Products Research
November 7, 2023
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

US housing data were a mixed bag for September; a modest month-over-month recovery in seasonally adjusted starts (to 1.36MM units) and an uptick in new-home sales were the bright spots, but existing-home sales have capitulated and sentiment around housing remains highly negative (driven primarily by worsening affordability). …There has been a bifurcation of the single-family (SF) and multifamily (MF) markets, with SF construction activity showing signs of modest improvement (+3% m/m, +9% y/y) while MF activity has slowed dramatically (+18% m/m but down 31% y/y). Permitting data followed a similar trend last month, totalling 1.47MM, with singles ticking up ~2% m/m 965,000 while multis slipped from 593,000 in August to 508,000 in September. Existing-home sales declined to their lowest level in almost 13 years. New-home sales stepped in to partially fill the gap… as homebuilders continue to find ways to keep selling despite extremely challenging macroeconomic conditions!”

The North American lumber market remains stuck in the mud. S-P-F 2x4s are trading at $370 today, levels at which many BC mills will be losing money. SYP 2x4s are holding up a little bit better at $402, but SYP 2x6s and 2x8s are trading below $300. Lumber demand continues to be hampered by an affordability-driven slowdown in residential construction activity. Reports on demand from the repair and remodel sector are mixed, but some softening is expected in the quarters ahead. We anticipate that lumber prices will remain rangebound around current levels through the winter (with more upside for S-P-F than SYP). After several weeks of declines, OSB prices did an about-face in mid-October and have posted modest increases over the past two weeks. …Over the medium-term, price risk is downside-weighted given challenges in U.S. housing (including seasonally weaker demand in Q4) and a raft of new supply coming to market. Plywood prices have slipped but remain elevated by historical standards. The recent upturn in OSB prices should support plywood in the near-term.

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RBC expects “mixed” Q3 results for paper & forest products

By Paul Quinn, RBC Analyst
RBC Capital Markets
October 23, 2023
Category: Opinion / EdiTOADial
Region: Canada, United States

RBC analyst Paul Quinn is expecting “mixed” third-quarter financial results from North American paper and forest product companies, seeing “more supportive building materials prices but somewhat lower prices across several other commodities. “Pulp prices seem to have bottomed, led by a resumption of purchasing activity by China, although significant capacity additions and elevated inventory levels are likely to slow the pace of a recovery,” he said. “Paper prices have moved only modestly lower, but operating rates are weak. Supply-demand tension in containerboard is improving somewhat with recently announced closures, and prices have stabilized, but we expect market-related downtime to offset new mill start-ups to continue for the near-term. Timber prices remain weak across North America due to weak lumber and other end use consumption.

“During the Q3 earnings season, we think investors will be focused on the trajectory into 2024, particularly as it relates to wood products demand against a backdrop of elevated interest rates, and demand for graphic paper and paper packaging. While we wait for an inflection point in the economy, interest rates and overall confidence, we note that valuations remain near historic lows.” Heading into earnings season, Mr. Quinn predicts lumber prices are likely to “struggle to gain meaningful momentum” through the remainder of the year, “barring any transportation issues or unforeseen events, driven by both seasonality and higher interest rates weighing on new construction and R&R activity.

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As always, lots of mysteries, surprises and drama in the North American lumber market

By Russ Taylor, Russ Taylor Global
The Truck LoggerBC Magazine
October 4, 2023
Category: Opinion / EdiTOADial
Region: Canada, United States

The North American lumber market has been stalled for much of 2023… [but] the longer-term fundamentals of the US and Canadian housing markets look good, as there is still an apparent pent-up demand for homes. As new residential housing represents 35 per cent of US lumber consumption, any upside in housing demand should increase lumber demand, especially after mortgage rates start declining next year. …Repair and remodelling activity (40 per cent of US lumber consumption) is slowing and expected to decline (but remain positive) for the rest of 2023 and then become negative, at least into the first half of next year. 

The typical lumber demand and price cycle sees a spring rally followed by a slowdown in July and August before picking up through September and then bottoming out at the end of October. Starting in November, lumber prices tend to rally for the rest of the year. However, not all years are normal, and this year has been quite abnormal where no spring rally happened. …In looking ahead to 2024, there seems to be considerable optimism out there by some expecting a good year. However, I am not so optimistic. …There is ample sawmilling capacity available to the North American market (especially SYP) at current demand levels and any shortages could be filled by non-Canadian imports, especially from Europe. This means that lumber prices could remain stalled until conditions for an increase in housing, R&R and overall lumber demand are back in place. The good news is that lumber prices will not be as low in 2024 as they were in 2023 and most forecasters remain bullish here.

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This Year’s Fire Season Demonstrates the Need to Develop More Resilient Forests

By Tony Kryzanowski
The Logging and Sawmill Journal
August 29, 2023
Category: Opinion / EdiTOADial
Region: Canada, United States

The summer of 2023 will go down as the year of smoke in North America, and while it would be easy to panic and predict the end of days, history teaches that this could easily be a one-off year, followed by a cool and rainy summer. …But there is no denying that 2023 will go down as the worst year for forest fires in recorded Canadian history. What was particularly noteworthy was how widespread it was, with nearly every province within the boreal forest scrambling to fight fires. It truly was a national event—and not a good one. It would be easy to blame Climate Change for this dire situation, and there is no doubt that it is causing more extreme weather patterns like long periods of drought. This contributed to the size of the fires that burned in 2023.

But we can do a better job of forest management to potentially minimize the size and spread of wildfires by creating more resilient forests. We’ve known about these forest management practices for decades, but have resisted making the change because it is more economical and easier to plant monocultures of same-age trees. Now we see the consequences, particularly in areas that naturally regenerate as mixedwood forests or conifer stands that regenerate with mixed species and ages. …We know these practices work to mitigate forest fires because thousands of years of forest management by Nature proves it. Fire is nothing new in the fire-origin boreal forest—in fact, it’s natural. What is new are changes to the natural forest succession that we have adopted in current reforestation practices, including fire suppression on a massive scale, and now we are starting to realize the consequences of this interference. It’s time for change if we don’t want gaps in the forest resource available to harvest in future

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North American lumber prices reverse after fire-induced rally meets seasonally sluggish demand

Kevin Mason, Managing Director
ERA Forest Products Research
August 21, 2023
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

Lumber prices have reversed course lately after the fire-induced rally met with seasonally sluggish demand. High-cost mills will again be tested and downtime will be needed. A painful quarter or two await. OSB prices appear to have peaked, with oversupply expected in 2024. Share prices are fading but lumber companies are expected to have more upside over the next year than panel producers.

Pulp prices are still falling for most grades and regions, save for a bounce off the bottom in China. The majority of prices are expected to bottom in Q3 and prices will trend near trough levels until mill curtailments and/or closures expand. Demand remains horrible as downstream inventories are whittled away. Prices are falling slowly as North American producers embark on significant downtime to keep stocks in check. Prices will continue falling through 2023–24. 

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Canada Needs an Industrial Strategy for Forestry

By Eric Johnson & Mahima Sharma, FPAC
Policy Magazine
May 5, 2023
Category: Opinion / EdiTOADial
Region: Canada

Eric Johnson

Mahima Sharma

The federal government has stepped up in a significant way on climate action by setting ambitious targets to reduce greenhouse gas emissions and accelerate our move to a lower carbon economy. And as the late Jim Carr, Canada’s Minister of Natural Resources from 2015 to 2018 often said, there is no path to a net zero carbon economy without Canadian forestry and forest products from Canada’s sustainably managed forests. …In his recent report to Parliament, Commissioner of the Environment and Sustainable Development Gerry V. DeMarco noted that Canada’s forests are becoming a net source of emissions because of forest fires and disturbances caused by insect outbreaks, which are now among the biggest threats to our nation’s climate targets. The increasing catastrophic nature of wildfires in recent years is a result of climate change. As such, we must prioritize proactive forest management with a focus on climate adaptation. …Managing our forests and using carbon-storing wood products in the built environment are powerful tools as we work to adapt to a warming climate. 

…Delivering further GHG reductions for the country will require targeted and regionally optimized forest management, industrial operations, and most importantly more strategic industrial policy from our federal government. …To remain competitive in the global forestry and clean technology markets, Canada must act swiftly to ensure its tax incentives align with those offered by other countries, particularly the United States. …The time is now for Canada to seize the opportunity presented by its abundant biomass resources and incorporate the technologies that convert these residues into electricity into its ITC programs under a more comprehensive industrial strategy for the sector. By doing so, the country can unlock the immense social, economic, and environmental benefits of this sustainable energy source, while maintaining its competitiveness on the global stage. Investing in Canada’s forestry and clean technology sectors – and understanding their essential role in the fight against climate change – has never been more important.

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As North American lumber breaks out of its winter slump, BC continues to struggle to attract investment

By Kevin Mason
ERA Forest Products Research
May 1, 2023
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

The North American lumber market broke out of its winter slump this month, with prices for several species and dimensions appearing to finally find a near-term floor around mid-month. Southern Yellow Pine (SYP) remains the standout performer—2×4 prices started trending higher at the beginning of the year and have scarcely let up since (SYP has traded at an unusually large premium to S-P-F through the first four months of the year). …However, we note that S-P-F prices are still far below cash-cost levels for BC sawmills and believe a huge volume of unannounced sawmill downtime is being taken in the province. 

…In mid-April we attended the Council of Forest Industries’ annual convention in Prince George, BC, and left with more questions than answers about the state of the industry in the province. Clearly, the BC forest products sector is in a difficult place right now: BC is the highest-cost producing region for most of the products it makes; S-P-F lumber prices are hovering near multi-year lows; pulp prices are in freefall; and mill-closure announcements (both pulp and lumber) are coming thick and fast. There are myriad forest policy initiatives being laid out by the provincial government (i.e., old-growth protection, tenure reallocation, habitat conservation, etc.), but, in trying to be all things to all people, we fear the government is getting in its own way. …Canfor’s upcoming decision about whether to invest in a rebuild/modernization at its Houston, BC sawmill will be an interesting litmus test for both the government’s and the industry’s commitment to the province.

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2023 will be a challenging year for commodities and companies with exposure to the US housing market: ERA

By Kevin Mason, managing director
ERA Forest Products Research
March 8, 2023
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

We are already two months into 2023, yet it feels as if we are still holding our breath to understand the general direction of the year ahead. One of the largest drivers in our space will be China’s appetite for commodities as the country exits its COVID-lockdown era. …The largest overhang, however, is likely the geopolitical situation, with China’s relationship with Russia driving fears of potential Western trade sanctions and contributing to very cautious consumer sentiment. …Another big macroeconomic wild card for 2023 is what happens with the Fed funds rate. We have seen expectations around U.S. monetary policy flip-flop several times already this year, but stubbornly high inflation and blockbuster job numbers for January now suggest the Fed could continue hiking through the middle of the year, and the next rate-cut cycle may not begin until 2024.

Sentiment around the broader housing market has flip-flopped in recent months. …However, [January’s] optimism didn’t last too long. Commentary on Q4 earnings calls was quite sobering, and, with sticky January inflation numbers and a more hawkish tone in the latest Fed meeting minutes, it feels like we are back at square one—with at least another couple of quarters of weak housing demand seemingly assured. …After two-plus years of heightened volatility around the pandemic (commodities, stock market and housing were all impacted), it is perhaps understandable that minor changes in underlying data often garner an outsized (over)reaction. However, we have seen little concrete evidence to date that suggests 2023 will be anything but a highly challenging year for commodities and companies with exposure to the U.S. housing market. 

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The time is right for a new model for managing BC’s forests

By Jim Stirling
The Logging & Sawmilling Journal
February 21, 2023
Category: Opinion / EdiTOADial
Region: Canada

Cast a look across the horizon of the recently minted year 2023 and it looks too much like 2022 to inspire much confidence. …The list of familiar issues for the forest industry includes sawlog availability, rising operating costs, continuing skilled labour shortages and the faltering lumber markets in Asia along with a characteristically belligerent market in the United States. …But this year can be different. The timing is right for B.C.’s NDP government to start talking frankly about its intentions to the provincial forest sector. …The present B.C. government has the same troubling tendencies of many of its predecessors. It tends to listen to whichever self interest group is attracting the public’s attention and—in the case of the forest industry—frame its land use decision-making accordingly.

The time is right for a new model for managing B.C.’s forests; one that reflects new thinking to complement the world’s new realities. For example, the provincial government, First Nations and the forest industry could work co-operatively to identify, designate and protect areas of provincial land as part of a working forest. …A working forest designation would provide a solid platform for industry re-organization to occur. It could also usher in a different approach to forest management… [it] could well prove a literal lifeline for many forest industry-reliant communities… [it] could also help sweep away some uncertainties surrounding investment in the B.C. …A working forest model could encourage more intensive management techniques to better suit the needs of a specific area. The B.C. government would benefit from the establishment of a working forest in ways beyond a better managed forest land base.

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ERA Overview: solid wood prices sluggish; pulp & paper and packaging moving down

By Kevin Mason, managing director
ERA Forest Products Research
February 3, 2023
Category: Opinion / EdiTOADial
Region: Canada, United States

Kevin Mason

Housing market indicators vacillate between depressing and mildly encouraging. Starts will still fall this year—how badly is the key question. Log prices have slipped in multiple markets, with past strength in Pacific Northwest set to fade. China’s reopening should help New Zealand and Pacific Northwest exports in time. Lumber markets have been shocked by a raft of closures (almost all in BC), prompting a rally in prices (and equities). As lumber prices rise, supply will once again outrun demand, reversing this rally in Q2, 2023. Panel markets have not seen a supply response as lumber has. Prices have barely moved up. New supply this year will suppress any upside.

Pulp prices are migrating lower across virtually every grade and region. Supply reductions in BC have helped moderate softwood’s decline. China’s reopening will limit pricing downside, with trough prices higher. Newsprint prices have peaked, and the only question is how soon the inevitable price decline will begin. However, exports provide options. Paper prices have peaked for all grades; an inevitable decline is next. However, unlike newsprint, woodfree paper grades have seen an explosion in imports that poses substantial risk. Containerboard markets are a mess and massive downtime was taken in Q4, yet prices fell (at least inventories declined). With more supply coming, we expect prices have further to fall. Boxboard markets are far more stable than containerboard, but URB prices have slipped and CRB will follow (in time). Coated unbleached kraft (CUK) and Solid Bleached Sulfate (SBS) will hold stable until late Q2/Q3, but pressures will push prices lower by summer. Recovered-paper prices are stabilizing at low levels for brown grades.

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Five steps to reboot B.C.’s forest industry

By Linda Coady, CEO, BC Council of Forest Industries
The Vancouver Sun
June 13, 2024
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Linda Coady

Mill closures and curtailments in B.C. last year led to the loss of 5,000 direct jobs in the forest industry, and another 5,000 indirect jobs in supply chains and services that support the industry. Current conditions in the sector are not only negatively impacting jobs and operations, but also exports, government revenue, and investment in the province. Reasons for the historic level of disruption have been well-documented. Insects, fire, markets, and policy shifts figure among them. …But getting the sector back on track to deliver the benefits that communities across B.C. rely upon requires more than understanding what the problem is — it requires a willingness to do something about it. …Here are five [solutions] that would help create more predictable timber supply in B.C. while meeting other important goals for forest health and environmental protection, and First Nations reconciliation.

  • Fix current permit development processes to ensure that an environmentally sustainable and economically viable harvest can be consistently achieved. 
  • Secure agreements with First Nations that advance progress on critical issues. Embrace new approaches to consultation, forest tenure, revenue sharing, and First Nations land use planning.
  • Expedite new regional tables for Forest Landscape Planning. 
  • Establish new targets and financing strategies to expand the role that research and forest management can play in wildfire resilience, community and biodiversity protection, and fibre utilization.
  • Develop a long-term roadmap or economic strategy for the B.C. forest sector. …The vision needs to drive stronger performance on carbon management, sustainability, and Indigenous-led forest management and conservation.

Consensus is growing on what can be done to reboot one of B.C.’s most important industries. The time to act on that consensus is now.

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Still Dreaming – Honest Commentary On British Columbia’s Efforts To Grow Value-Added Wood Products Manufacturing

By David Elstone, Managing Director
The Spar Tree Group
May 12, 2024
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Premier Eby and his Ministers Ralston and Mercier are often heard saying “more jobs from trees harvested” when talking about the BC forest industry. Such a phrase resonates easily with the public as a common-sense vision for the British Columbia forest sector, the essence of which has also become part of the NDP government’s official industrial policy for the forest sector. …What does “more jobs from trees harvested” mean to manufacturers (and their investors)? To be honest, absolutely nothing. It does not send a signal about surety and stability of fibre supply or about the province’s attitude on hosting conditions. More jobs is a nice political slogan, but sounds increasingly misguided as an expectation, especially when current forestry jobs are being lost in the thousands. As rational economic entities, manufacturers (small and big) do not strategize to increase jobs as an objective, rather they invest to minimize costs and maximize returns – sometimes that adds jobs and sometimes it eliminates them.

Efforts so far to promote value added manufacturing have largely been to help existing businesses to sustain themselves with equipment upgrades. A wave of widespread transformation has not occurred. Missing in efforts by the BC government has been the re-establishment of a predictable and affordable fibre supply – a situation that is only getting worse. …The BC government needs to collaborate to shed the reputation of being the highest cost forest products manufacturing jurisdiction in North America. If not addressed, mills will continue to close. Conversely, improved competitiveness will bring more jobs and if guided correctly, more higher value manufacturing. Just imagine if Premier Eby were to say, “hey we want more jobs from trees harvested by helping to create the most competitive and productive forest sector in the world!”… now that would change the conversation to one which the industry and its investors could relate.

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Planning for the Future of BC’s Forest Economy

By Alice Palmer
Truck LoggerBC Magazine
April 7, 2024
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Alice Palmer

What industry provides 18% of BC’s economic base, $12-14 billion to its economy, and $4 billion in government revenues? Forestry, of course. Therefore, one might think British Columbians would want to safeguard it. Yet, over the past five years, BC’s forest industry—one of our province’s biggest economic drivers—has been under increasing pressure. …Some of the harvest declines have been due to natural factors. …The driving force behind the remaining harvest reductions? Forest policy. BC intends to increase its protection of old-growth forests and their associated biodiversity values and has committed to protecting or conserving 30 per cent of its land base by 2030. This represents a near-doubling of the current amount under protection (17%). But this is just the start.

…With its ecosystem-based approach to forest management, the draft BC Biodiversity and Ecosystem Health Framework philosophy appears to be that humankind should minimize its commercial use of forests. Forest-based activities should instead emphasize restoration activities. An alternative interpretation of “taking care of the land” could be “carrying out different management activities in different places.” For example, under the three-zone system recommended by the Old Growth Strategic Review (OGSR), the converted zone could include intensive silviculture. By zoning some of the land for industrial production and taking care of it for that specific purpose, British Columbians could continue to enjoy the economic benefits of logging, even while setting aside more land for conservation. Conservation of key ecosystem elements can also be achieved (and may be enhanced) while carrying out forest management activities on the land. …The OGSR’s recommended consistent zone—land managed to simulate the patterns of natural disturbance—could even count as part of the conserved and protected lands included in BC’s 30 per cent.

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BC’s Land Act mess creates opportunity to figure out tough questions on DRIPA (Declaration on the Rights of Indigenous Peoples Act)

By David Elstone, Managing Director
The Spar Tree Group
March 1, 2024
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

By now most have heard that the proposed amendment to the Land Act was cancelled, at least until after the October provincial
election. …”For me, the proposed amendment to the Land Act itself was not the problem, rather it was what it represented – yet another proposed policy change without the operational details to understand what it meant. The constant flow of changing policy to meet aspirational intentions has been crushing the BC forest sector. …Unfortunately, the opposition rallied against this amendment by stoking fear the Declaration on the Rights of Indigenous Peoples Act would give a veto to First Nations on 95% of the province, despite the move towards shared decision-making not intended to be a blanket change. …Did anyone pause to think what the alternative to DRIPA could be? I would surmise it would likely mean even greater uncertainty for the forest industry!

With the amendment cancelled for now, it’s time to start figuring out answers to some of the tough questions on DRIPA, such as what happens when an impasse occurs? That’s the challenge with shared decision- making – one cannot really call it “shared” when one side always gets its way. Ironically, if the BC government can override opposition, which is actually a veto – something that First Nations have existed under for the last 150 years. …Obviously, there is much work to be done based on the recent polling that found seven-in-ten feel that the then pubic consultation was moving too quickly and that 94% of British Columbians see the proposed amendment as “a major transformation of the rules governing public land use…” The sooner we can collectively figure out operational level shared decision-making, in terms that the public can grasp, the sooner some of the current challenges facing the forest industry will likely find some relief.”

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BC forest sector – a view to 2024 (and a look back on 2023)

By David Elstone, Managing Director
The Spar Tree Group
January 16, 2024
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

Will 2024 be another year of turmoil? It’s a provincial election year, which is typically when advocacy magic happens, but in the case of BC, will the politicians be listening more to the woes of the forest sector or that of the ENGOs? Here’s my quick prognostication on what to expect:

  1. Softwood lumber trade agreement? – Given the distraction of the US election, do not hold your breath waiting.
  2. Direction of North American markets in 2024? Market direction largely will depend on what the US Federal Reserve does with the federal funds rate. China does not look to be a major market mover. All in, we are likely to experience a sideways to modestly positive market.
  3. BC forest policy will remain the slow-moving train wreck that it is. …If you thought the implementation of old growth deferrals has been disruptive, you had better buckle up given the Province’s Biodiversity and Ecosystem Health Framework (although implementation could come after the election).
  4. BC’s Crown (public lands) timber harvest will continue to decline in 2024, although maybe not by as much as in 2023.
  5. The BC forest sector will continue to shrink – Challenging economic availability of log supply (including lack of permits) will cause sawmills and other forest products manufacturers to curtail or outright close. Interior collective agreements expired in 2023 without much progress.
  6. Will a new cross-laminated timber (CLT) type, value-added wood products mass timber plant be proposed? Probably not, but if there is, it will likely be in partnership with a First Nations.

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Forestry is the foundation of the BC economy and we are investing to ensure it remains strong

By David Eby, BC Premier
Truck LoggerBC Magazine
January 3, 2024
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Eby

Forests are at the heart of our identity as British Columbians. All of us in the province depend on the forests to provide the materials to build homes and businesses. …Forests sustain people by providing good jobs for tens of thousands of us in the woods, in the mills, and on the roads as truck loggers. Others create products from forestry that we use every day. Those are jobs that sustain many families and sustain wood products that are part of how we will reduce carbon pollution and fight climate change. But there are real challenges. We know forestry operations are having trouble getting access to fibre. The allowable annual cut has significantly decreased in many regions owing to devastating wildfires and the end of the beetle-kill harvest. The unfair and unfounded imposition of a softwood lumber duty by the United States, as well as unfavourable market conditions, have also contributed to challenging times.

We need to build on our longstanding strengths if we’re to overcome these challenges. Forestry is a foundation of the BC economy. We will continue to make investments to ensure it remains a strong and sustainable industry. …We are helping to diversify local economies to make them more resilient through the transition from high-volume to high-value production. We introduced a $180-million BC Jobs Manufacturing Fund to do just that. …In September, I spoke at a Global Buyers Mission conference, the first premier of the province to do so. Among the attendees in Whistler were buyers from all over the world. The reason for the interest is clear—BC has world-class forests, a world-class forest sector, and produces world-class forest products. Our province has deep roots and a proud history in forestry. All British Columbians have benefitted from the bounty of this natural resource, and we intend to do all we can to ensure these benefits are long-lasting.

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BC needs a vision for where the forest sector is headed with definitive targets for annual harvest

By Bob Brash, TLA Executive Director
Truck LoggerBC Magazine
January 3, 2024
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Bob Brash

Suffice it to say there is an abundance of headlines about the environmental climate challenges facing us. …However, there remains a chore in convincing policy decision- makers… to deal with the current climate of uncertainty, instability, and lack of investment facing our sector. Today’s forestry world in BC is encountering many storm clouds in terms of the volume of policy and legislative changes impacting our sector in such a short period of time. Adding to the concern are the many unknowns about how such changes will actually be implemented across the landscape and how decision-makers will interpret them. …When viewed cumulatively, the effects upon our forest sector and businesses are decidedly negative contrary to the many announcements spun to a different narrative than those working in the woods are dealing with daily. 

Our sector has evolved over time to be one that is highly efficient at ensuring the harvested logs are fully utilized in all the various manufacturing facilities. It is a complex and integrated system requiring all components to be working properly. …Today’s work environment is not functioning as such. Across all components, uncertainty and instability dominate both the discussions and reality. Business decision-makers are typically drifting towards not making or deferring those needed investments to improve their business to the detriment of all in the sector. …Solutions abound to manage our forests for various objectives, mitigate the risks from wildfires, tackle climate change, provide the most sustainable product in the world, and meet the general expectations of both society and government. A good starting point would be government’s recognition of the immediate need for a collaborative and endorsed road map and vision for where BC’s forest sector is headed, including definitive targets for the overall annual harvest and land base in which we can be assured of operating upon.

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Wildfires have taken too big a toll on British Columbia

By Joe Nemeth, BC Pulp and Paper Coalition
The Province
December 11, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Joe Nemeth

When the wildfire season mercifully ended in November, 2,217 wildfires had been counted, 2.8 million hectares of land had been burned, including forested and non-forested land. …The premier has appointed a task force to study this year’s fire season and develop ideas about what can be done. The pulp and paper sector applauds the premier for making wildfire risk reduction and salvage a priority, but challenges the need for another task force to add recommendations to those of previous studies and analyses. We know what to do and we need to act now. The top four steps we can take include: Streamlining the cutting permit approval process for fire-damaged trees; Creating fire breaks with roads and small openings; Removing fuel sources around small communities through brushing and thinning; and Making better use of First Nations historical practices such as cultural burning.

What happens to the millions of fire-damaged trees left in the wake of these big fires? …There is a ready use for that burned fibre in the province’s pulp and paper mills and sawmills. In fact, the pulp and paper sector is keen to be part of the solution by taking up to five million cubic metres of burnt wood every year. …But the industry has a problem. We are currently operating at about 80 per cent capacity, mainly due to a fibre shortfall of about two million cubic metres annually — a tiny percentage of all that fire-damaged wood left across B.C. It shouldn’t be that hard to access that fibre and get it into these mills so that jobs and communities and international markets can be sustained. …We just need a little will from government to speed up permitting decisions, direct funding to allow the use of wood waste and fire damaged stands to continue and grow, and to introduce a program to support thinning around communities to safeguard them from fire risk.

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Wildfires laid siege to BC in 2023 — time for a different approach

By Jim Stirling
The Logging & Sawmilling Journal
October 31, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Wildfires have laid siege to British Columbia in 2023. Residents outside the province’s Lower Mainland region have endured a prolonged and surreal environment of fear and uncertainty, filled with toxic smoke and flurries of evacuation alerts and orders. …Land lost to wildfires in 2017, 2018 and 2021 set records—but the terrible trio’s toll was eclipsed by July in 2023, the beginning of what is traditionally the start of the worst two forest fire months of the season. …The warming climate’s interconnected impacts on the forest industry are the focus of a new report by the B.C. Forest Practices Board. The report says there’s an urgent need for a different and coordinated approach to forest fire management on B.C.’s Crown land. It points out fire can be a friend and not always the wildfire foe. Fire, when used judiciously, can help sustain a productive and healthy B.C. forest landscape as it did historically.

The report noted the policies that were applied in B.C. during the 20th century resulted in densely forested areas and an increase in the amounts and distribution of forest fuels. …“There is an urgent need to shift forest and fire management, policies, objectives and policies toward co-existing with fire on the landscape,” says the report. “Restoring landscape resilience is required and the first step toward that is to introduce landscape fire management into the land management framework in B.C.” The report continues: “Bold and immediate action is required by the provincial government to align policies and programs across all levels of government with a vision of landscape resilience and human co-existence with fire.” …The document’s recommendations are pertinent and timely. Suggestions for working practically with nature can help restore a badly damaged landscape diversity in B.C. That in turn will indicate paths forward for the forest industry to continue its renewal and vigour.

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Time For Action To Save British Columbia’s Forests

By David Elstone, RPF
The Spar Tree Group
October 17, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

There has been plenty written on this year’s horrendous wildfire season. It’s justified, since it has been the worst year for hectares burnt, record value of insurance claims for destroyed property, and most sadly, the lives lost by those working to fight wildfire. Merchantable timber and non-timber natural values were burnt including old growth forests, wildlife habitat and parks – the fires were non-discerning to what we value. …The evidence is abundant that the status quo on wildfire management is no longer a viable path. In many respects, we may be quickly arriving at a pivot point on forest management driven by wildfire. The BC government recently announced a task force on emergency management during wildfire, but the task force will not address what is desperately needed. … BC has a long history of fire suppression [and] much of what we need to know has all been documented by successive reviewers, and yet not much has been done.

To substantially enhance the resilience of our forested landscapes to fire, it will require substantive change by government and by industry on how to manage our forests, and just as equally, it will require changes to our traditional notions of conservation. …This suggests areas we have protected from commercial timber harvesting will still need forest management if we want such areas to endure. …The provincial government hopefully will have the funding, but the industry is key to implementation. Unfortunately, industry capacity is shrinking and will continue to do so if something is not done to address this trend. …To some it may be counter-intuitive to believe that to promote and protect both conservation and economic values of our forested landscapes, intervention through more harvesting activities (thinning etc.), not less, will be the solution. The alternative is the status quo, no change nor action; we are already bearing witness as to how that’s working out.

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What Will The Future BC Forest Industry Look Like?

By David Elstone and Jim Girvan
View from the Stump
October 5, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

To say that the BC forest industry has seen change over the past 20 years would be an understatement. There have been several editorials and analyses done quantifying how many mills have or will close; how many trees have been killed; and how many jobs have been lost. Interestingly, few have looked where the BC forest industry might end up as timber supply continues to decline. …In 2005, the forest industry was running on all cylinders with a Crown AAC of just under 86 million m3. …In the BC Interior, there were 14 veneer plants and 82 sawmills with a combined lumber production capacity of over 16 bbf operating, …On the coast, there were 3 veneer plants and 29 sawmills with a combined lumber production capacity of over 3 bbf operated. On the residual fibre/biomass side, the province had 16 pulp mills, 8 paper plants and the beginnings of pellet and biomass power businesses. The industry was flourishing with direct employment of close to 70,000 people.

When we look out to 2035, a full 30 years after the industry peak, the picture is sobering. Using a forecast for a province-wide Crown AAC of 38 million m3, only 33 or 40% of sawmills operating in the BC Interior in 2005 will remain and lumber production capacity will fall to a mere 38% of that peak. On the coast, 14 sawmills are expected to continue operating, with 56% of the capacity of 2005. On the pulp and paper side, more closures are forecast… with pulp capacity forecast to settle at 54% of that in 2005 with paper capacity at a mere 11%. For other forest products manufacturers there may be 10 veneer production facilities, 14 shake and shingle mills and potentially just a few specialty operations remaining. …Despite the ever-present prognostications of doom and gloom there are those still willing to invest in this province. Most recently, Canfor’s new state-of-the-art 350 million board feet sawmill in Houston. …The BC government wants more investment to transition the industry, and specifically to add more mass timber manufacturing. Unless a plan can be developed to cut short the current trends, a much smaller industry is forecast by 2035. 

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Consequences To BC’s Old Growth Forest Policy Are Real

By David Elstone, Managing Director
The Spar Tree Group
September 19, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

Job losses and reductions in work have been confirmed as real consequences of BC’s initiatives on old growth forest policy. Spar Tree Group’s May 2023 BC forest sector survey found three quarters of timber harvesting and road building contractors were experiencing some amount of work reduction due to old growth deferrals. Furthermore, the survey results indicated at least 1,000 jobs may have been displaced because of the deferrals in timber harvesting alone (not including forest product manufacturers nor the other segments of the forest sector’s supply chain). …After a mild rebound from the start of the Covid-19 pandemic in 2020, the provincial Crown timber harvest has since decreased by 16 million cubic metres or over -30%. For 2023, timber harvesting is down -23% year-to-date to August. …Staying on this path will mean more closures. …To be fair, other factors such as the now-past mountain pine beetle epidemic and ongoing wildfires have definitely contributed to these decreases.

Anti-forestry advocates are calling for more and faster action on old growth forests. Giving into to such pressure is what got us into this trouble in the first place. It is incumbent on local governments and all members of the provincial government to ask what are the potential impacts of the next steps? Perhaps some analysis should actually be done on the outstanding fourteen recommendations of the A New Future For Older Forest report. …Yes – we should improve our efforts in managing for old growth, but it is a complete myth to believe we are harvesting the last of our old growth when at least 75% of the existing old growth forests in this province are not threatened by harvesting. We need to be open to new ways of managing forests in BC that are dynamic and active to promote forest resilience instead of creating static area set asides to achieve a target which meets some environmental or political agenda. 

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Time for a proactive approach to wildfire — we know the solutions and we have the expertise

By Christine Gelowitz, CEO, Forest Professionals BC
The Province
September 18, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Christine Gelowitz

Wildfires are part of the natural ecosystem — have been for thousands of years and will continue to be in the future. While the scale and impact of wildfire in B.C. appears to be increasing exponentially, there are more steps we could take to protect our communities and the forest, and to improve our ability to respond to and minimize the impact of wildfires. But doing so will not be easy or simple. It takes co-operation among the public, landowners, forest professionals, First Nations, firefighters, emergency responders and, most importantly, elected government representatives. …The core ingredients for a new vision and approach to wildfire is readily available in BC if governments are ready to make the investment and drive the required policy changes. Good ideas abound.

Earlier this year, the B.C. Forest Practices Board released a special report urging the provincial government to align policies and programs across all levels of government to enable landscape-level fire management. …Dr. Mike Flannigan of Thompson Rivers University, estimates that every dollar spent on prevention and mitigation saves $5 to $15 spent on fighting wildfires. The time for waiting and conducting more studies is over. In many communities, the planning is completed and solutions have been tabled. Now they need to be implemented by policy and government funding at a scale comparable with the efforts devoted to wildfire emergency response. B.C. has skilled and competent people who can help move wildfire prevention and mitigation activities forward. …We know the solutions. We have the expertise. Now we just need the will to act.

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Time To Start Managing Forests For The Future

By David Elstone, Managing Director
The Spar Tree Group
August 17, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

Past calls for power by the BC government drove the expansion of energy production by the private sector (IPPs). Many projects including pulp mill power, run-of-river and biomass projects were built over the last two decades to sell power to BC Hydro. However, a strong lobby campaign against IPPs led to dramatic policy change… and as a consequence, the government ended its standing call for power in 2020. This all occurred despite awareness of growing energy demand, and the province did not have enough capacity. . …Now with the goals to electrify the province and net zero emissions for LNG, the government has once again turned to IPPs for solutions. How does this shift in energy policy serve as a comment about forestry? 

Forest product markets may be tough now, but according to the UN FAO’s forest sector outlook to 2050, consumption of lumber, panels, and pulp will increase by 37% beyond 2020. …Unfortunately, just like the misguided end to the calls for power back in 2020… the Old Growth Strategic Review has brought about new and pending policy that will reduce our ability to manage forests for our needs. We should be expanding active forest management which would address our very Canadian reality that harvesting (and thinning) actually helps protect forests (and our communities) by reducing wildfire intensity as well as carbon emissions from forest fires. …It took three years for government to come to its senses on energy. How long will it take the government to do the same on forestry?

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B.C. Old Growth Transition Plans Remain Non-existent

By Bob Brash, TLA Executive Director
Truck LoggerBC Magazine
August 8, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Bob Brash

It’s been three years since government received the Old Growth Strategic Review and promptly proceeded to accept all its recommendations. While debate continues about the overall merits of that decision, we need a reminder of the two key transition recommendations that were endorsed by government:

  • Once developed, implement the new policies and strategies for the management of old forests through mandatory provincial and local transition plans that define, schedule and monitor the process.
  • Support forest sector workers and communities as they adapt to changes resulting from a new forest management system.

Today, where are we at with these mandatory transition plans that support forest workers and communities as they adapt to the changes being imposed by government? Three long years later, I think it’s fair to say they remain non-existent.

Instead, the focus appears to be vaguely expressed through the future state of government’s newly proposed “paradigm shift” with all the necessary steps for a transition basically missing. And those opposed to forestry consider this “paradigm shift” to mean we stop harvesting all together. The TLA has long been on the record for recognizing and supporting change in BC’s forest sector. In fact, most of us have been transforming our sector for our whole careers. However, there are essential elements that need to be in place for any transformation to be successful. …Recently, Premier Eby challenged the forest sector to come up with “creative solutions on their own” to address current challenges. Well, we’re ready, with the caveat that it needs to be done together with government and must include effective actions to enable a successful transformation.

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Envisioning the Future of Logging in BC

By Alice Palmer
Truck LoggerBC Magazine
July 4, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Alice Palmer

In a world where the only constant is change, anticipating the future helps us identify potential disruptions—and prepare for them — futurist Nikolas Badminton of Futurist.com. The BC forest industry is no stranger to change. On top of the constant ebb and flow of demand for forest products, we also have to contend with a seemingly ever-decreasing log supply. On a more positive note, emerging technologies such as global positioning systems are creating opportunities to increase automation and log more efficiently. Further, wood is increasingly being recognised as a carbon-friendly building material and is being used in a growing number of applications. …If we allowed ourselves to daydream about where we live and how we live 30 years into the future, what would we see? Will the world’s cities be full of wooden skyscrapers? Or, conversely, will society’s thoughts and beliefs about sustainable forestry lead to less forest harvesting, and ultimately, less wood usage overall? 

In Facing Our Futures, Nikolas Badminton points out that one person’s utopia may be another’s dystopia, and this is evident when we listen to forest policy discussion in BC. Consider, for example, the idea of designating tracts of forest land for intensive timber production. Are such forests the perfect solution for carbon sequestration on a smaller land base, or are they dense, dark, “biodiversity deserts”? If society’s overall goal is to have both wood production and conservation, we will probably have to incorporate both industrial and conservation forestry into our plans. …Facing Our Futures does not say much about negotiating between clashing worldviews. However, it does describe how scenario building can be used to stimulate broader interest and participation. 

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A Prosperous And Successful Province Needs Direction

By David Elstone, Managing Director
The Spar Tree Group
June 5, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

It has been two years since the BC government presented its vision to reshape the province’s forest sector. …A large part of the reason for the industry’s underwhelming response is the lack of specific direction from government on what exactly it meant by “more jobs and higher value.” …The irony is that the industry recognizes that change is needed in order to continue operating in this province. Even without policy changes, there are various pressures driving decisions to shift paths including a declining BC Interior timber supply, wildfire management and need to grow relationships with First Nations to name a few. 

Without an overall plan with goals, the forest industry is left in paralysis and has no ability to move forward with investment to drive the government’s desired change. …From a politicians’ perspective, having no explicit goals is a conservative approach as it means no accountability. Unfortunately, the industry’s frustration mounts, and capacity continues to retrench. …Problems like those facing the sector can be resolved when there is decisive and clear direction with measurable, transparent goals. A vision to be implemented and expected to bear results within a four-year election cycle (or less) is not realistic given the size and complexity of the forest sector. A good first step that would hopefully withstand political pressures and help move the necessary conversations forward is having a forest sector economic strategy supported by all that rely on British Columbia’s forests…otherwise the Recipe For Gridlock will continue as evidenced by the closures of Canfor’s Houston sawmill and subsequently Brink’s Pleasant Valley Remanufacturing.

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Dare we dream to change BC’s timber harvest decline?

By David Elstone, Managing Director
The Spar Tree Group
May 1, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

The following is a summary of David Elstone’s presentation at the BC Council of Forest Industries Convention in Prince George, BC

Last January, upwards of 40% of the sawmilling capacity in British Columbia was affected by some form of curtailment or closure, which in turn affected a number of pulp and paper mills. How far will reductions in future lumber production go as the BC industry transitions? A similar path or can we change? …What do we dare to dream about for the sector in order to change its path? Indigenous forestry? Ecological regenerative forestry? Silviculture investment? New value-added products and manufacturing innovation? The vision paper, Modernizing Forest Policy In British Columbia offers many good intentions but there are large gaps in understanding how several of the initiatives can be achieved. …For the industry’s transition to a future prosperous sector, investment will be needed but current conditions lack predictability largely due to current policy initiatives. 

One solution to help further current government policy priorities while creating the specific parameters needed by industry, would be to create a strategic plan or economic strategy. An economic strategy would be coordinated with social and ecological objectives and include the following components: i) a long-term provincial vision for the sector based on regional economic strategies made in partnership with First Nations; ii)  a data-driven economic plan that reflects regional strategies, specific goals and a realistic timeline for implementation; and iii) appropriate metrics for change to help guide the changes that are occurring and need to occur. …Such a plan could help position British Columbia as a leader in value-added manufacturing, indigenous forestry and conservation management. If the oil sector can change direction, surely, a “green” renewable resource like BC forestry can change as well.

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The influence of Indigenous’ interests on BC’s natural resources sector is expanding at a rapid pace

By David Elstone, Managing Director
The Spar Tree Group
April 6, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

The influence of Indigenous’ interests on British Columbia’s natural resources sector is expanding at a rapid pace. …The BC government’s [2021] Modernizing Forest Policy intentions paper conveyed a goal “to increase the amount of ‘replaceable’ forest tenure held by Indigenous peoples to 20% from the current level of approximately 10%. …A March 2023 analysis by the Spar Tree Group, showed that the total amount of tenure held by First Nations organizations had decreased by 7% to 9.7 million m3, but the amount of replaceable tenure increased by 6% to 7.3 million m3. …With ongoing reductions to AAC in various regions of the province, comparing the absolute totals may not be the best way to monitor progress.

Over the last year and half there have been two significant developments in regard to industry agreeing to sell or dispose of tenure to First Nations. The first is Canfor’s announced intentions to sell its Mackenzie area tenure to two local First Nations. The second is due to Interfor’s potential tenure transactions with several First Nations. …If those pending tenure dispositions occur, it would mean that industry is moving ahead with tenure diversification without government intervention… and the estimate of replaceable tenure held by First Nations increases to 15.4%. …While the government’s vision for Indigenous held replaceable tenure has still to be fully achieved, it is apparent that the rising influence of First Nations extends well beyond that objective. As I have written many times before, if your business does not have a relationship with local First Nations, you may want to change that, because without such a relationship, your business’ supply chain may be at risk.

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A Hollow Paradigm Shift?

By Bob Brash, RPF, MBA, Executive Director, TLA
Truck LoggerBC Magazine
April 4, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

Over the last few months, the BC forest sector has increasingly been the beneficiary of broad proclamations by many who work outside of the sector about an upcoming “paradigm shift” and “transformative future” in the management of BC’s forests. For some, these are apparently new and wise revelations worthy of our everlasting gratitude. The reality is that many of us have been around long enough to know that for decades, these terms have been bandied around repeatedly when each generation believes they have found the grand solution to the forestry issues of the day. These many decades have also seen the ebb and flow of the lobbying influence each faction in the debates can harness for their agendas dependent upon the government’s leanings in any particular election cycle. Today, many would say the pendulum is weighted towards environmental influences, while others will argue the industry’s influences were dominant in previous times. There is probably merit on both sides of the argument.

When was the last time all of those with a stake in our province’s forests collaborated on the development of a true vision for the future of BC’s forests? …Perhaps Pearse’s Royal Commission qualifies, but that was 47 years ago. I think it’s fair to say things have changed a bit since then. …What would those broader discussions and the development of a collaborative vision entail? …The question is whether all of those involved want to work on that solution to the broader benefit of all of us collectively or continue the current course of trying to outgun each other with lobbyists to Victoria.

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BC mill closures blamed on incorrect notions of overharvesting and wood pellet plants

By David Elstone, Managing Director
The Spar Tree Group
February 27, 2023
Category: Opinion / EdiTOADial
Region: Canada, Canada West

David Elstone

I read with concern a recent editorial by Ted Clarke with perspectives by Ben Parfitt, from the Canadian Centre for Policy Alternatives [Business in Vancouver, Feb 23]. To correct Mr. Parfitt, infestations did not begin in 2009. …In the late 1990’s and early 2000s these outbreaks expanded into an epidemic with the amount of pine being killed each year reaching a peak in 2005. …Faced with such a catastrophe, the government had two options. Option 1. Do nothing and let the dead timber decay, and possibly burn in wildfires. Option 2. Encourage the industry to use as much of the decaying timber as possible by temporarily increasing the harvest before it rotted. …Yes, harvesting, and lumber production rose to levels well above historical averages, but it was done with intention – this was no secret! 

Parfitt said the province would have been better off to give secondary value-added forest companies access to timber supplies the pellet industry is now using”. …A recent study found that 85% of the BC pellet industry’s fibre supply comes from by-products of sawmills and allied industries, and the remaining 15% is supplied from the forest including low-quality logs not suitable for lumber production and post-harvest residue. Perhaps there may be an innovator that could use some of this fibre, but not likely at the same scale of the pellet industry. …The article is correct in providing the message that “there’s every reason to believe that we’re going to see further mill closures”, but this is not news to anybody in the industry and mill closures cannot be blamed on the incorrect notions that the industry was overharvesting (dead timber) or the rise of the pellet industry.

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Setting the Record Straight about Forests and Forest Products: It Takes a Village

By Carlton N. Owen
Tree Frog Editorial
July 28, 2023
Category: Opinion / EdiTOADial
Region: United States

Carlton Owen

Re: “Reel Paper” – “the disruptive start-up creating tree-free toilet paper.” The headline alone is puffy enough but go to Reel Paper’s website and you’ll find all kinds of misinformation or just “alternative facts.” How is a small startup going to truly “disrupt” a global market? Simply stated “it ain’t gonna happen.” It doesn’t mean that the procurement of fiber and production of toilet paper can’t continue to make progress in being more environmentally friendly and sustainable. But that’s not the gist of this short piece. It’s the well-intentioned, but absurd misinformation foisted on consumers that want to feel better about the environmental footprint of their purchases. … how many millions of acres of valuable farmland would we convert from forests or food crops to achieve the goal? … if we want to sustain a robust wood products sector it’s all of our jobs – but especially those of us who do or have made our livings in the sector – to engage and promote the facts. At the same time, we need to acknowledge that there is always room and need to improve our practices both in the forest and in the manufacturing process.

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Retirement: A False Concept for White-Collar Professionals; More so for those in Natural Resources

By Carlton Owen, retired CEO, US Endowment for Forestry and Communities
Tree Frog Editorial
March 5, 2023
Category: Opinion / EdiTOADial
Region: United States

Carlton Owen

When people ask how I’m doing in retirement, my standard answer is, “I used to work 60-70 hours per week for very good pay.  Now I work 40-50 hours per week not only for no pay, but everything I do costs me money. And, I’m having a ball.” …When I hear young people talk about what they are going to do “when they retire,” I cringe.  We need the best minds and the best actions of young and old alike to fully engage in service to humankind for their entire, but limited, time on Earth. Just as this is the best time for a young graduate in natural resources to enter the profession, I too believe it is the best and most needed time for seasoned and experienced professionals to continue to invest and give back. My nearly 50-year career in forestry and wildlife has been a blessing for which I will forever be grateful.

For those that don’t know the background for America’s retirement age, “Age 65″ was chosen because, “… studies showed that using age 65 produced a manageable system that could easily be made self-sustaining with only modest levels of payroll taxation.” Another way of saying it is, retirees wouldn’t live long enough after 65 to put pressure on the system and there were ample numbers of workers to keep paying forward for those few retirees. Fast forward nearly nine decades from the system’s founding (1935) and much has changed leading our system to a path of sure bankruptcy if significant modifications aren’t made soon. While we can hope that our political leaders will soon fix the broad safety net for retirees, I stand by my belief that retirement as we’ve come to know it, especially in North America, is one that neither serves well the individual and surely not society.

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Offshore log and lumber markets may be worse than you think

By Russ Taylor, Russ Taylor Global
Russ Taylor Global
November 21, 2023
Category: Opinion / EdiTOADial
Region: International

Russ Taylor travelled in Europe and China in October to obtain a first-hand view of market conditions.

My personal view is that the real situation is probably worse that what is being reported. European demand will be about 11% lower in 2023 vs. 2022 and lower again in 2024. China’s consumption levels are completely stalled from a construction market in chaos. Consequently, it is going to take until some time next year for a recovery to occur. …Overall consumer sentiment in China is at a 12-month low as there continue to be lingering concerns over the future of the Chinese construction market. This has been not only a key driver of the economy (up to 24% of GDP but now closer to 19%), but a key driver in the wealth of Chinese citizens. With the construction industry awash in massive debts and no clear path ahead, this is having a negative impact on end users’ demand for imported logs and low-grade lumber for use in construction.

Inventories of logs and lumber at ocean ports and distribution yards are very low in China, especially when compared to previous years. …Most importers in China are worried about what happens after Chinese New Year in 2024. They remember very clearly what happened in 2023, as everyone thought there would be rising demand and higher prices after the COVID lockdowns were removed. The opposite occurred, and many overbought high-priced lumber in all grades in first quarter 2023 and have been licking their wounds ever since. …If there are more shocks to consumer confidence, then all bets are off for any increases in imported logs or lumber or prices until well after Chinese New Year in 2024. …This all means that lumber exporters to China should be also careful on their shipment volumes, as their future business in China could be negatively impacted if prices decline from weaker demand and/or there are excessive inventories after Chinese New Year.

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