Slow markets, labour shortages lead challenges for Revelstoke forest industry

Forestry market remains slow but hopes are high for the future, though labour shortages could pose problems if things pick up.

Jim Scott spends his days out in the bush logging. As the owner of Two Guys Logging, a logging contractor, he admits that he’s at the bottom of the totem pole in the forestry industry. Still, he’s seen the industry’s struggles first hand.

“There’s no doubt it’s changed a lot in the last five to 10 years,” he said. “I’m employing 15 guys, I used to have a crew of 35.”

Those workers he no longer employs have scattered all over, he said. Some have gone to work in the oil fields while others have gone into mining.

Wherever they’ve gone to, they haven’t been staying in Revelstoke.

Revelstoke’s population decline, as noted in the last census, has been partly attributed to the struggling forest sector. The city is not alone in this regard. Other forestry-reliant towns have taken hits as well; Golden, Invermere, Mackenzie, Kitimat, Hope and Prince Rupert also saw their populations drop. Across the province, the percentage of people employed in the forestry sector has declined to 14 per cent in 2011 from nearly 25 per cent in 2001.

What is the state of the forestry sector in Revelstoke today? The general answer from talking to several people is the industry remains in a slump following the crash of the U.S. housing market in 2008.

“There hasn’t been a lot of change in the last few years,” said Mike Copperthwaite, the general manager of the Revelstoke Community Forestry Corporation (RCFC). “The markets still haven’t picked up very much. What we’re getting for our logs is still fairly low compared to five years ago.”

According to RCFC’s 2010-11 annual report, the average price the company received for its logs was $86.47 per cubic-metre. That’s down from a peak of $130.44 in 2007-08 and almost unchanged from the 2009-10 selling price of $84.98.

The value of cedar increased last year but is still well off its peak, while spruce, balsam and Douglas fir are also selling for less than their respective peaks when the U.S. housing market reached the peak of its boom in 2007. The value of pulp logs, that companies must remove and sell, is also at an all-time low.

“There is no profitability in this market with prices at historical lows,” Copperthwaite wrote in the report.

There are other issues facing the industry, most notably a shortage of skilled workers. While employment across the sector is down, there is a worry that the work force is aging and that as loggers retire or if the market picks up again, there aren’t enough young people to fill the holes.

“If you looked at the average age of logging community, we’re probably all getting up into our 50s,” said Copperthwaite. “We’re all aging and there’s not a lot of younger guys coming into the industry right now.”

The challenges are multiple. First, young people are scared to enter an industry where the future seems bleak, while at the same time, falling timber prices means companies can’t pay wages that compete with other natural resource industries like energy and mining.

“There’s no stability in the industry so what young person would want to try to make a career out of it?” said Scott. “It is a big challenge that the industry has lapsed into.”

There is recognition of this problem across the province and industry associations and the government are looking to tackle it. The provincial government has launched a campaign promoting careers in the forest industry, and other industries facing skills shortages.

“To bring in and start training people is something that the higher echelon of the whole industry province-wide – and even the government – have to try to grapple with,” said Scott.

Still, not all is bleak. Joe Kozek said his sawmill is seeing stronger markets than last year. While sales to the States have plummeted, the Canadian market has held up well. He is foreseeing growth in the future.

“It will be more like a ramp than a ladder, a slow steady increase,” he said. “I would say the forest industry in Revelstoke has weathered the storm moreso than other communities. We’re not totally reliant on that U.S. housing market.”

At Downie Timber, where the mill is back up to three shifts, there is also a sense of optimism, said wood manager Barry Wagner.

“It’s not going wild or … booming,” he said. “There’s a sense of optimism out there that maybe things are going to improve, or at least not drop off again.”

Mike Copperthwaite is also expecting things to improve in the not-too-distant future. “We’re forecasting next year to be similar to this year but in 2013 we’re looking for a significant improvement.”

 

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