FOREST INK: Why can the Asian markets pay more for B.C. logs than our local mills?

While this accusation is coming from the U.S. we should not be too complacent

Some of the log exporters in B.C. claim cheap Chinese labour is the reason for outcompeting our local mills but some U.S. companies claim Chinese government subsidies may be the main reason.

In an article on the Woodworking Network site, it was reported that Chinese buyers are purchasing more logs directly from log exporters, bypassing the U.S. sawmills.

“The Chinese are subsidizing their companies to the extent that U.S. sawmills can’t compete for the timber and logs in our area. The Chinese are also illegally receiving logs not fumigated into their country to cut their cost. The result is U.S. log exporters are going to force U.S. mills out of business.”

While this accusation is coming from the U.S. we should not be too complacent to think a similar thing is not happening here.

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According to a recent Canadian Centre for Policy Alternatives (CCPA) report, one in three trees cut on the B.C. coast was exported in 2016 — 6.6 million cubic metres — which is slightly short of the 6.9-million-cubic-metre record in 2013. Log exports between 2013 and 2016 generated $3 billion. An average sawmill produces 300,000 cubic metres of lumber annually, so the amount of logs exported in 2016 would have been enough to supply at least a dozen sawmills for a year in B.C.

According to Ben Parfitt, the author of the report, “if we continue down the road that we’re on, we run a very real risk of fewer and fewer sawmills, and more and more log exports, which means more forgone job opportunities. If you believe – and the writing clearly is on the wall — that there are going to be significant declines in available log supply in the Interior of the province, then the future of the forest industry — at least the immediate future — is going to be much more dependent on coastal forest industry activity.”

I can appreciate that it may not be fair to make too many comparisons with the larger private hardwood market system in the USA but we should not be too slow to think that the same outside pressures could be at play here as well.

In defence of log exports, B.C.s forest-sector organizations like the Coast Forest Products Association (CFPA) and Truck Loggers Association (TLA) argue that log exports are a very important part of the economics of the coast, ensuring that we can harvest the entire profile of the allowable cut, and that means getting into some of the harder, more economically challenged areas into the lower-quality stands. Log exports help you do that, and they help you do that in a manner that puts logs in front of domestic mills.

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This explanation by a forest sector organization was not surprising and I could accept that there may be some justification for log exports as long as the ratio of domestic mills compared to log exports is in our favour. My conclusion was that there should be a gradual reduction and eventual elimination of raw log exports so we don’t end up with more mills overseas than we have on the coast. I was hoping to find some support for my position but found the opposite from a number of reports which I will cover in my next article.

Jim Hilton is a professional agrologist and forester who has lived and worked in the Cariboo Chilcotin for the past 40 years. Now retired, Hilton still volunteers his skills with local community forests organizations.

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