Very sad news: Kelowna mill closure puts 127 employees out of work – Global News

Very sad news: Kelowna mill closure puts 127 employees out of work - Global News
We are in a major crisis: Indefinite work shutdown at B.C. mill latest blow to forestry industry
The Tolko lumber mill in Kelowna has been a fixture in the city’s north end for decades, but now the operation is shutting down indefinitely.

Very sad news for our members in Kelowna, said Pat McGregor, president of United Steelworkers (USW) Local 1-423. Another 127 people being laid off in addition to the 90 that were given notice back in July.

“The BC Liberals have repeatedly warned the NDP, and have offered tangible ideas to help address the crisis, but there’s still been zero action from John Horgan or his incompetent forests minister,” said Thomson. “Communities across B.C. are being hit almost daily with closure announcements, and there is still no response from John Horgan.”

Making it more difficult is the fact the 127 workers were getting ready to go back to work on Monday following a six-week curtailment at the mill.

So far this year, dozens of mills across the province have curtailed production, reduced shifts or closed entirely, with industry sources citing weak lumber markets, the high cost of fibre and a reduced cut since the harvesting pine beetle ravaged forests in the Central Interior has wound down.

To our local, it’s huge. To the city of Kelowna, it’s huge and to the industry in general, McGregor told Global News. Its another warning sign that things need to change.

So far in 2019, there have been at least 150 weeks of operational downtime announced at mills in B.C. In addition, there have been 10 permanent and indefinite closures, significant shift reductions and hundreds of millions of board feet curtailed.

The shutdown is another blow to B.C.’s lumber industry — with high log costs and poor North American market conditions being blamed.

B.C. forestry critic Liberal MLA John Rustad called the situation a crisis right across the province.

Government needs to step in and understand that it has to drive down our costs and make us more competitive so that people can be working, he said.

Vernon-based Tolko Industries announced the indefinite closure of its Kelowna operations on Thursday. This following a temporary closure that was already underway.

Some of the changes he suggested to help struggling forestry companies like Tolko involve carbon taxes and stumpage fees.

The Liberal MLAs said in just this past week, job losses in the forestry sector include at least 300 logging contractors and more than 600 mill workers.

Other provinces are not taking downtime and British Columbia is, Rustad said. That is a direct result of us being uncompetitive.

Also this week, Teal-Jones halted its coastal harvesting operations, which in a matter of weeks will impact hundreds of employees at its Surrey mill.

We are going to be talking to the provincial government to try and get work for some relief on log costs, he said. Whatever we can do to maybe get [the Kelowna mill] fired up again.

Thomson says Premier John Horgan and the NDP remain have been "missing in action" as the forestry sector continues to free fall. 

Were very worried and that is the sentiment from the majority of the workers there, McGregor said. They are already of the opinion its probably not going to start back up.

Employees at the Tolko lumber mill in Kelowna were supposed to be returning to work this Monday, following a six-week shutdown.

In a news release, company vice president of solid wood Troy Connolly said the decision was not an easy one, but with lumber market prices at sustained low levels and high log costs in B.C., the mill cannot be cost-competitive.

Its the latest blow for the provinces forestry industry. On Wednesday, wood products company Teal Jones announced its curtailing harvesting operations in the Fraser Valley and on Vancouver Island, which will affect about 300 jobs. A news release from the company also blames weak lumber prices, and additionally cites high stumpage rates and harvesting costs affected by new regulations aimed at clearing out more waste fibre. The release stated: These negative factors have made it impossible for the company to continue operating its forest licenses economically.

On Sept. 3, Interfor revealed it would be permanently closing its Hammond sawmill in Maple Ridge before the end of the year. About 140 jobs will be affected. In a press release, Interfors president and CEO Duncan Davies said: The Coastal B.C. forest industry has faced significant log supply challenges over the past two decades and manufacturing capacity needs to be brought into line with available log supply.

David Elstone, of the Truck Loggers Association, told CTV News Vancouver unless something changes, he expects further pain to occur, with more curtailments and eventually news of contractors going out of business and leaving the industry.

We are in a major crisis. Almost on a daily basis now, were getting announcements by the major sawmilling companies in this province, Elstone said, adding he wants the province to start working on building a more resilient industry.

Forests minister Doug Donaldson said the affected workers are the first priority for the province, in terms of helping them find jobs and offering retraining.

Overall, if you count the number of workers whove been touched by this, either temporarily, indefinitely, or full closures, its been approximately 6,000, Donaldson said, adding thats the number affected since about May of this year.

Donaldson said low lumber prices triggered by weakened housing starts in the U.S. are a big factor, and in the long term, diversifying the industry is key.

We have to expand the manufacturing, value-added sector, and theres many entrepreneurs who are already doing that, Donaldson said.

If this had been addressed by the previous government, who knew these mills were going to be closing, then wed be a little bit further ahead, the minister added.

Liberal forests critic John Rustad said he believes the industry needs help becoming more competitive, including reducing operating costs.

You cant have value-added if you dont have anything to add value to. You need to have the primary industry and you need it to be healthy, and so far this governments completely ignored it, Rustad said.

He said one step the province could take immediately is to follow Albertas example and go to a monthly adjustment for stumpage fees, rather than adjusting them on an annual basis.

Its not about an artificial adjustment, its about having a monthly adjustment that more reflects what our current market conditions are, Rustad said. Albertas not taking downtime, Ontarios not taking downtime. British Columbia is being hammered.

Donaldson said B.C. has a very rigorous, well-established, well-defined stumpage system, and added changing it at this point would risk losing in U.S. courts on the issue of tariffs.  

A stack of western red cedar wood is seen at CedarLine Industries in Surrey, B.C., on Monday April 24, 2017. (Darryl Dyck / THE CANADIAN PRESS)

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