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Montreal Wood speakers offer solutions to labour challenge

March 22, 2018 – The sixth annual Montreal Wood Convention is taking place at the Fairmont The Queen Elizabeth in downtown Montreal and the agenda is wide-ranging with talks on transportation and logistical challenges in the rail sector to opportunities for Canadian wood products in the growing Chinese economy.

The industry seminar on economy and markets was moderated by Canadian Forest Industries publisher Scott Jamieson and drove home the message that despite all the factors that come into play for the industry, a shortage of labour is the biggest concern in lumber yards today.

Paul Quinn, paper and forest products analyst at RBC said export growth trend has been good generally and should accelerate going forward with the lower Canadian dollar.

In housing, Quinn said resales across Canada have been strong. In the U.S., household formations remain strong with a trend level at 1.1 million, Quinn said.

The biggest problem on home building now seems to be labour, Quinn said. Home ownership is also low, especially by the millennial generation.

Lumber prices hit record levels in 2018 due to B.C.'s record fire season, hurricanes Irma and Harvey and then the California fires, which greatly affected lumber prices in 2017.

Lumber margins are continuing to move higher. "People are making significantly more money even with the 20 per cent duties... Those duties really have no basis," Quinn said.

François Robichaud from Forest Economic Advisors (FEA) said the FEA expects housing starts to increase over the next few years but are concerned with the ability of the supply side to respond to demand.

Lumber demand is expected to continue an upward shift through 2019–2020, Robichaud said. He added that the FEA believes increasing labour supply issues are to blame for the currently largely underbuilt U.S. housing sector.

Robichaud said improved job security and wages may help fix the labour shortage issue by encouraging millennials to enter the industry. He added that small, regional builders are still showing a better bottom line so far.

The FEA predicts that more pre-fabrication will occur. “The labour issue right now and the Information Age we are in are unprecedented and will drive industrialization," Robichaud said.

Excess supply in lower grade hardwoods is going to help substitute the shortage elsewhere, Robichaud said.

Robichaud said lumber needs to be part of the solution in industrialized building systems and FEA's advice to lumber manufacturers is to be careful with grading and keep lumber quality very high.

Kirk Grundahl, executive director of the Structural Building Components Association was the final speaker on the economy panel and said nothing has changed in building processes since the late 1800s including the quality of building materials. He says today's technology can be used to automate aspects of the building process.

"There's a huge opportunity here for differentiating and providing reliable design properties… We need partners that think about our industry in an engineering way to make a big difference," Grundahl said.

Innovation through engineering and manufacturing is a priority, he said.

Human resources challenge
Stéphane Renou, president and CEO of FPInnovations moderated the human resources (HR) challenge in the manufacturing industry panel, which delved deeper into the labour issue and offered some recruitment tips to industry members.

Joel Neuheimer from the Forest Products Association of Canada (FPAC) says key HR issues include access to fibre, carbon regulations, competitiveness, Aboriginal engagement and labour shortages.

The latter is a big issue today, Neuheimer said. "We're typically located in remote locations... We need to do a better job selling the way of life in those communities," he said.

Replacing an aging workforce, creating new jobs, promoting remote locations, and hiring more women, Aboriginals and new Canadians is part of the solution to HR challenges Neuheimer said.

There has been some hiring success with the Temporary Foreign Workers program, but there are shortages for positions like foresters and power engineers working in mills, Neuheimer said adding that FPAC created the greenestworkforce.ca to help solve HR challenges in forestry.

Bruno Lambert vice-president, services at HumEng International — a Quebec company that specializes in continuing education for the manufacturing, industrial and natural resource sectors — discussed wood industry workforce challenges in his presentation on the HR panel.

The average job tenure is decreasing year after year, he said adding that the average job tenure decreased from 4.5 years to 4.2 years from 2014 to 2016.

"Do we have the right mindset?" Lambert asked. "Are we managing jobs or are we managing skills?" He said different generations have different hiring needs and recruitment in the manufacturing sector is not high despite average salaries being 22 per cent higher than other sectors.

Lambert said three important retention moments for a company are an employee’s first 30–60 days at a new job, 12–18 months, and after three years where there is expectation for career progression.

Jeff Weber, executive vice-president and COO of EACOM discussed the value of investing in people and technology to attract talent to the sawmill industry. "Continuous improvement is a 24/7 endeavour," he said.

Weber said EACOM’s decision to invest in continuous improvement and specifically the human side is the reason for the company's production increase year-over-year.

Sylvain Messier, corporate projects and controls manager at EACOM said continuous development and acquisition of the latest technology attracts quality talent.

EACOM’s four pillars to human capital are innovation, collaboration, training and mentoring. "There's a lot of good talent out there. If a company is willing to create opportunity... They will attract some young talent," Messier said.

FPInnovations' Serge Constantineau presented the last session of the conference on smart and agile manufacturing and why it matters.

The FPInnovations SM2 initiative is about the industry reinventing itself to improve competitiveness, Constantineau said.

This includes finding innovative uses for surplus materials such as chips. The purpose is still to make chips, but to find new homes for the surplus in supply. Constantineau said the goal is to reduce chip production.

Constantineau also mentioned a shortage of skilled manpower as a major challenge in the forest industry sector. News of mill shutdowns prevents recruiting new people who, as a result of learning about the shutdowns, may not be inclined to join the industry, Constantineau said.

"Our manufacturing mission is in tune with the 21st century," Constantineau said. And he said the best way to accelerate is to work with partners.

Currently more than 200,000 chips are on the ground in Quebec for which there is no use, Constantineau told the crowd. The FPInnovations goal is to find a new use for these surplus materials.

A new home for chips could be for board insulation or even organic cat litter and Constantineau said perhaps that could expand to other animals.

Constantineau said FPInnovations will spend 20,000 hours on research to explore alternate uses for surplus materials from sawmills like chips and wants to work with mills to find creative solutions.

The 2018 edition of the Montreal Wood Convention brought together nearly 1,000 participants from across Canada and the globe including Mexico, France, Belgium, Japan, China, Senegal, Germany, Austria, Jordan, and the U.S.

March 22, 2018  By  Tamar Atik

Paul Quinn