They called it ‘Black Tuesday’ for Vancouver Island mill workers when Catalyst Paper announced the layoff of 227 employees between its Crofton and Elk Falls mills, but the event was soon overshadowed by worse news for about 800 workers at the Pope & Talbot Harmac and Mackenzie mills, when the company’s bankruptcy and the mill’s closures were announced. (Graph: BC Pulp & Paper Layoffs.Adapted from information supplied by Canadian Forest Service, Natural Resources Canada.)
In fact, the ever-increasing frequency of closures, layoffs and production curtailments announcements has reached a dizzying pace in recent weeks and months. Sales, mergers and acquisitions further serve to contribute to the kaleidoscopic landscape of the forestry business in BC.
The BC pulp mill industry is heavily dependent on the sawmills of the province to provide fibre from the wood waste of their processes, and therefore, are as sensitive to the lumber markets as they are to the pulp markets when fibre supplies run short. Between the US economic downturn, with its related housing market collapse, and the devaluation of the US dollar, lumber export markets have crashed and sawmills have been closing all over the province.
The most recent examples are the TimberWest sawmill at Campbell River, and the Western Forest Products flagship Ladysmith sawmill, the main suppliers of fibre for the Campbell River Elk Falls mill and the Crofton mill respectively. Announcement has been made for both of their closures, and laying off close to 300 workers. The layoffs at the pulp mills followed close behind.
Some argue that, economic climate notwithstanding, the real culprit is BC government forestry policies that have given the green light to raw log exports and sacrificed the ‘value added’ sectors of the BC industry. Pulp markets are reportedly strong enough to support the business, the problem being that the fibre shortage from the closing sawmills has seriously impacted the availability of materials and escalated the price of inputs, making BC pulp producers uncompetitive in global markets. Recently, the Vancouver Sun reported that the Catalyst Crofton mill was actually buying sawdust from US mills that was derived from Canadian raw log exports.
The logging sector has not, however, been immune to cutbacks either in BC, as demonstrated by Western Forest Products idling large parts of its logging operations on the coast this spring to bring their production in line with the sawmill demand, affecting about 800 workers. Clearly, raw log export volumes are insufficient to justify all the allowable logging operations.
According to the Industry Canada website, the total number of employees for the Pulp, Paper and Paperboard Mills industry group decreased from 68,438 workers in 1994 to 53,704 workers in 2003 – a loss of 14,734 jobs (or 22%). Figures from the Canadian Forest Service show a decrease of 16, 755 jobs in the pulp and paper sector in just the next 5 years between 2003 and 2007 – over double the rate of job loss. 2008 is shaping up to follow the trend.
The same Canadian Forest Service reports named 40 sawmills that have closed across BC since January, 2003. On top of that there are another 21 instances of partial shut-downs and shift reductions. In the same period (January, 2003 – April, 2008) only 3 pulp mills faced full closure with another 8 announcements of shift reductions and partial shut-downs. With sawmill closures accelerating at this rate, pulp mills have little choice but to follow on their heels however, amply demonstrated by the recent closures and cut-backs in the six weeks since the report release. 2008 has already surpassed any previous year in layoffs in British Columbia pulp and paper mills, and it is not yet halfway through the year.
(Layoffs in the Canadian Forest Industry)
Adapted from information supplied by Canadian Forest Service,
Natural Resources Canada and news reports on job losses
No one denies the severe impact that these job losses have on local economies, especially considering the semi-rural nature of many mill locations, making entire communities dependent on one mill for local economic generation. There has been a recent trend to shift municipal tax base away from the corporate sector, but still the tax base of mill-towns is sent into shock when the mill is suddenly gone. Harmac accounted for 72% of the industrial tax base of the Nanaimo region with their $3.5 million tax bill.
Recent calls for provincial government assistance for the industry have mostly met with stony silence, perhaps due to the fact that BC, by most accounts, seems to be doing just fine despite the forest industry’s claims of its keystone position in the provincial economy. Statistics Canada reports BC unemployment for April 2008 at 4.3%, considerably below the national average of 6.1% and nowhere near past national highs of 11-13%.
It will be up to the communities to cope, adapt and replace the mills with something else that can replace at least some of the tax revenue and local economic multiplier effects to keep other businesses going in the small communities. The decline of the pulp mill industry in BC, although painful for many, represents a unique opportunity for communities, and the province, to re-invent itself. Examples around the province include shifting the local economy to everything from eco-tourism and the arts, to the Gold River example of morphing the pulp mill into a waste incinerator.
Local politicians in Gold River are ecstatic that their tax-base and employment will be re-instated by the facility, but the health impacts of living near waste incinerators are well documented. The trade-off, while looking attractive in the short term appears to ignore the new and increased level of toxic load that the facility will bring to the community.
While the provincial government may be powerless to change macro-economic effects like the housing market of the United States, they are not powerless to help shape the local economic alternatives. Dealing with the toxic legacy of closed mills is not straightforward or cheap and it will be up to the Ministry of Environment to ensure that someone is taking responsibility for the legacy landfills full of toxic waste and all of the other pollution sources on a mill site.
The province can help best by helping to develop sustainable alternatives for local economies, providing bridging mechanisms and re-training for workers and fully participating in the transformation from mill towns to communities geared to the opportunities of the future. The government role is not to prop up a failing industry, but to support the communities and the workers who are facing traumatic times as they make this transition.
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