Sudbury

'Historic spike' in lumber prices keeps northern Ontario mills humming

With the ballooning price of lumber, mills in northern Ontario are busier than ever.  But in the boom-and-bust wood business, it's hard to know whether this spike will have lasting affects.

Workforce hasn't increased as most mills already running 'full blast' when prices shot up

Most sawmills in northern Ontario were running at full capacity before the price spike and some have been offering overtime pay to meet the demand for lumber. (Erik White/CBC )

With the ballooning price of lumber, mills in northern Ontario are busier than ever. 

But in the boom-and-bust wood business, it's hard to know whether this historic spike will have lasting affects.

"We do make a lot of puns about volatility, things being on fire, etcetera," says Biliana Necheva, senior public relations adviser for Eacom Timber Corporation.

"It is good news for us because we're able to sell our product at a higher price."

She says new home construction in Canada and the U.S. is "flying off the charts," plus there is increased demand for home renovation materials during the pandemic. 

But Necheva said it also puts a lot of pressure on their sawmills — including in Timmins, Gogama, Elk Lake and Nairn Centre in the northeast — to meet that demand and cash in on those higher prices.

There are also disappointed customers, paying a lot more for lumber and often not getting as much wood as they want.

Northern Ontario lumber has set sales records in the United States over the past year, despite the pandemic and ongoing trade tariffs. (Erik White/CBC )

Necheva said it's not as simple as just cutting more trees, since the harvest is highly regulated by the provincial government and drying the logs takes time. 

"So it's not as wonderful as it may seem right off the bat," she said. 

"In as much as we are enjoying this historic spike, and it is historic, we're at the same time very mindful that it will come down." 

Necheva said Eacom is looking to invest some of the profits from this lumber boom that will help its sawmills weather the next market downturn, including $8.9 million worth of new machinery for its Elk Lake operations.

Forestry unions say if lumber prices remain high, workers will likely be seeking a larger share of the profits with several collective agreements set to be renegotiated this fall. (Erik White/CBC )

"They want their plants to be running and it's good for the workers. The workers are going to be working," said Jacques Jean, president of United Steelworkers Local 1-2010.

His union represents nearly 2,000 northern Ontario forestry workers, from those who cut trees in the bush, to the workforce in sawmills and paper plants.

Jean said some mills were offering overtime pay to meet the demand for lumber, but most were already running "full blast," with two shifts before the prices jumped up and adding a third would infringe on maintenance time for the equipment. 

He said if the timber companies keep turning big profits, his union will likely be seeking a bigger cut for workers, with contract talks at several mills scheduled for this fall. 

"I don't have a crystal ball, but I believe it's going to be like that for a while."

ABOUT THE AUTHOR

Erik White

journalist

Erik White is a CBC journalist based in Sudbury. He covers a wide range of stories about northern Ontario. Connect with him on Twitter @erikjwhite. Send story ideas to erik.white@cbc.ca

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