Layoffs at B.C. sawmills no cause for concern in northwestern Ontario
Dozen pulp and paper, sawmills shuttered in northern Ontario since 2007
Layoffs at sawmills across British Columbia are not an indicator of the health of Ontario's forest industry, say two insiders with knowledge of Ontario's sawmill operations.
Twenty-five sawmills in Canada's westernmost province have shut down in 2019. Three mills have temporarily closed in northwestern Ontario this year, one being closed since April.
While access to wood supply is an issue in B.C., it's U.S. softwood lumber tariffs causing problems for sawmills in Ontario, said Jamie Lim, the President and CEO of the Ontario Forest Industries Association (OFIA).
"If companies have large sums of money sitting at the border that they can't use to run their operations, it may leave them with no choice," said Lim, referring to the shutdowns in Ontario.
Lim said she can't predict what individual operations may do in the future, but said the concern in the industry is the millions of dollars tied up at the border, which is not being invested in sawmill operations, or staffing.
Resolute Forest Products, the company which owns the sawmill in Ignace, Ont., said it shut down its operations in that community because of weather issues. A wet spring and fall meant contractors had difficulty getting fibre out of the bush.
That issue, along with a downturn cycle in prices are to blame, said Seth Kursman, a spokesperson for the company.
The price of lumber though, is starting to stabilize, and go back to historical prices, said Stephen Boon, a national representative with Unifor. The union represents sawmill workers throughout northwestern Ontario.
"Some mills are weathering it better than others, such as Ear Falls," he said.
"They've been able to absorb it better, but there are some mills that are having a little bit of an issue with making money and paying those duties."
Boon said mills in Kenora, Ignace and Longlac are all on temporary layoffs. He anticipates meeting with the owners of Kenora Forest Products before Christmas, and hoped to have an update for employees shortly after.
Kenora Forest Products stopped its production on Oct. 21.
Boon said while the shutdowns are frustrating for forestry workers, he does not see massive layoffs and shutdowns in the future, as the industry saw in 2007.
A decade ago was an absolute once in a century crash where the entire economy was on the edge of a cliff. I think now we're debating whether it's a softening, more of a soft-type recession, nothing near what we saw back in 2007, 2008 where the entire industry collapsed."
Boon said the federal government needs to ensure lumber producers are not subject to any more tariffs, noting the 20 percent premium on lumber is the biggest hurdle facing the industry.
"The prices even now are at a more traditional type level."
Boon said availability of fibre is not an issue in Ontario, with 37 percent less fibre being harvested over the past 15 years, mainly due to less mills operating.