B.C.’s coastal forest industry may be feeling optimistic after a few years of improving sales and economic conditions, but the organization that represents industry contractors warns there are still major challenges on the horizon.
David Elstone, executive director of the Truck Loggers Association, said the overriding theme of this year’s annual convention, which wrapped Friday in Victoria, was the long-term health of the industry and the TLA’s membership.
“The health and sustainability of contractors is reflected in the sustainability of the communities in which they work. They are the backbone of those communities,” he said.
Elstone said improving the competitiveness in the industry, continuing to improve the playing field for independent contractors and tackling issues such as an aging coastal workforce will go a long way to ensuring the long-term health of the industry. “We’re working to make sure our contractors have an industry they can pass on to their children,” he said.
The most pressing issue may be a labour shortage. Elstone estimates there will be 4,700 positions available in the coastal industry over the next 10 years.
In an address to the convention, Premier Christy Clark said the recent drop in oil prices, which displaced workers in the Alberta oilfields, could be an opportunity for B.C. to lure back skilled workers to industries such as forestry.
Elstone said while that may help, the TLA is also working on developing recruitment and training programs with the Coast Forest Products Association as well as programs to build a First Nations workforce.
“We want to be proactive. There will be a lot of people leaving over the next 10 years,” he said.
The TLA did get some good news this week as Clark said her government would work on establishing funding for the $5 million Forestry Service Providers Compensation Fund. The fund offers protection for contractors in the event timber licensees who hire them face financial difficulty.
If a licensee goes bankrupt or has money problems before paying for the wood a contractor has delivered, there is no security and contractors are unable to borrow against their work.
The fund is part of ensuring the long-term health of the contracting businesses, said Elstone.
“We are encouraged to hear the Minister of Forests [Steve Thomson] talk about the fund and an ongoing replenishing mechanism. It speaks to contractor sustainability,” Elstone said. “They feel it’s necessary and they have access to it so their working capital is not put at risk because another business has a failure.”
During his address Friday morning, Thomson said the province is working to ensure B.C. timber is pushed out to the market. The goal is to advertise 14.4 million cubic metres of wood in the 2015-16 year, up from 11.9 million cubic metres in 2014.
“A priority for us is competitiveness. A healthy industry means a healthy contracting sector, which leads to a healthy supply sector,” Thomson said. “We are all in this together and a healthy sector is one that we will need to work on collaboratively.”
Thomson also talked about the optimism, with sales volumes up, employment numbers up and harvest numbers up. “We’ve been through the worst after the collapse of the U.S. housing market but we are now seeing positive signs of recovery,” he said.
While the U.S. market is in recovery, Rick Jeffery, president of the Coast Forest Products Association, said there are problems in other key markets. “There are headwinds in China. It’s continuing to slow, so we are focusing efforts to move up the value chain [with higher-value timber and dimensions], and in Japan the markets are extremely flat,” he said.
Jeffery said the industry is buoyed by the U.S., where there are strong sales of cedar riding on a low Canadian dollar and low cost of fuel.