Editorial: Bouncing back
Feb. 26, 2018 - It was a pleasure to meet the family and staff behind Northland Forest Products in Fort McMurray, Alta., this past fall.
From the outset I knew this was going to be an interesting visit, pulling up to the sawmill after driving past miles of charred stems left over from the Fort McMurray wildfire that decimated the community in May 2016.
The mill site is visible just off Highway 63, but I’m told it was once separated from the highway by a thick row of trees. Those trees were cut down to help protect the mill as, day after day, the wildfire threatened to close in.
Northland and its people are remarkable for a few reasons. One: my instinct during a wildfire is to … run. Northland’s owners and a few staff members chose to defend the mill against the fire. With reliable intelligence from the provincial wildfire service (a pivotal reason for their decision to stay), Howie and Craig Ewashko and a small team set up sprinklers around the mill and a hydrant system in the Athabasca River. Read more about their experience of the wildfire, and the mill profile.
The second reason Northland is remarkable is its location. The 75-mmbf dimension mill is in the heart of Alberta’s oilsands where, during boom times, the cost of living is outrageous and employees are next to impossible to find. Yet this mill has managed to continuously invest in its improvement, most recently boasting a brand-new small log line with feed-speed capability of up to 650 feet per minute.
Northland’s story, while unique, reflects a tenacity demonstrated by many sawmills in Canada. During difficult times for the industry, we remember that our mills have waded through adversity before and emerged stronger than ever.
And times are indeed volatile. In his 2018 North American lumber outlook, Russ Taylor explains that, as predicted, the U.S. import tax on Canadian lumber caused prices to rise as Canadian producers passed on the increased costs to U.S. buyers. The U.S. appetite for lumber continues to grow. In spite of an anticipated increase of lumber output from U.S. mills, their capacity does not equal the demand. This situation is likely to inflate prices even more over the coming year. Russ writes that Canadian shipments could decline by 2.5 per cent from 2017 to 2019, while Canadian exports to the U.S. could drop by seven per cent.
This market situation is unsurprising to regular readers and industry veterans. Canadian companies have been preparing for trade uncertainty since the most recent iteration of the Canadian-U.S. softwood lumber agreement expired in 2015. Sawmills from Vancouver Island to Nova Scotia will be cinching their belts this year, but their perseverance should pay off.
On Dec. 20, Canada filed a trade complaint with the World Trade Organization listing nearly 200 cases over the past two decades. The complaint was made public in early January, and the BC Lumber Trade Council president Susan Yurkovich was one of the first to welcome the legal action. “We know that when unbiased entities review these unfair trade practices, they have found in Canada’s favour,” she said.
Softwood lumber companies may not be the only ones having a lean year. NAFTA talks are scheduled to wrap up in March and many are braced for a U.S. withdrawal of the trade agreement.
The wait is on this year, and Canadian Forest Industries will be there to share your stories of resilience.