Even with record-high lumber prices driving the forest industry, logging contractors continue to struggle to stay in business, says B.C.’s main harvester group.
Members of the Truck Loggers Association are hoping for quick action by the B.C. government on recommendations from the recently completed review of logging contractor sustainability, conducted by former cabinet minister George Abbott.
“This report and recommendations basically validates the reality of logging contractors today,” said Dave Elstone, executive director of the TLA. “There is declining profitability for contractors across the province.”
The recommendations include establishing a minimum standard rate model for logging contractors by 2020, including equipment required, set-up times, fuel costs, crew costs and distances to be travelled. The report also calls for a government and industry-funded training program by 2019, to address the skilled worker shortage caused by people retiring or leaving the industry.
Elstone said contractors are working at less than full capacity, even with high lumber demand and prices, because they don’t have enough skilled operators to keep their trucks and harvest equipment going. The contractor system puts a lot of risk on loggers and they don’t generate the profits to manage that risk, so some are closing down, he said.
RELATED: How will Winter Harbour survive?
RELATED: Industry lauds Canadian lumber trade action
The TLA says its members are the foundation of an industry that supports 140,000 jobs in B.C. and generates $14 billion in revenues internationally, with lumber sales to China, Japan, Korea and other countries in addition to the U.S.
Forests Minister Doug Donaldson has responded cautiously to the report, offering to hire a facilitator to bring together large companies and contractors, with a deadline of deciding which recommendations to move on by the end of July.
Randy Spence, chair of the Interior Logging Association, said the report confirms that conditions are similar in his region as the B.C. coast.
Susan Yurkovich, president of the B.C. Council of Forest Industries, cautioned that logging contractor costs for forest companies are already higher than competing jurisdictions, and the industry needs to maintain global competitiveness.
B.C.’s lumber producers are also dealing with tariffs imposed by the U.S. government since the expiration of the latest softwood lumber trade agreement last year.