Canfor Corp.’s recent mill closures have hammered workers, their families and communities in British Columbia.
But the future of the province’s once strong forest economy may face an even greater threat from what the company is doing 5,000 kilometres away.
Steadily, over the course of the past two decades, Canfor has invested hundreds of millions of dollars — U.S. dollars — buying, expanding or building new sawmills in Alabama, Arkansas, Georgia, Louisiana, North and South Carolina and Mississippi.
Canfor’s hefty investments far south of the Canada-U.S. border have come as it has steadily closed one mill after another in northern and central B.C., including its most recent announcement that it will shutter its once formidable Plateau sawmill in Vanderhoof and a sawmill and pellet mill in Fort St. John. Another 500 workers will lose their jobs in an industry that has shed more than 40,000 jobs in B.C. in just 20 years.
The closures are making the once unthinkable possible: could Canfor, a name synonymous with forestry in B.C., soon be gone from the province altogether?
Green gold
To understand why Canfor has moved so much money out of B.C. and into the United States — a move being replicated by other companies that have long operated in the province, including West Fraser, Interfor and Teal-Jones — let’s look at what drew them to B.C. in the first place, its primary forests.
Primary forests are natural forests with trees of varying age from those only years or decades old to centuries-old giants whose cores contain wood of unparalleled quality.
These natural forests were never before industrially logged or cleared away by mining or oil and gas interests. Most important, humans had no hand in creating them, although humans most decidedly did live in and work in them for millennia before Canfor came along.
Indigenous Peoples selectively cut down individual trees to use in houses or to make monumental works of art like totem poles. They cut planks out of the trunks of certain trees, leaving them to heal their wounds and continue to grow. They also peeled bark from some trees to make myriad products including nets, clothing and baskets.
And, perhaps most importantly, they carefully and deliberately set fires in tracts of forests to clear away underbrush, making them better places to hunt, harvest and cultivate certain plants.
Canfor and other companies viewed such forests as the equivalent of rich veins of ore. And they mined that green gold, starting with the forests closest at hand and then moving farther afield. Up from the valleys into the highlands, over one mountain range and onto the next they went, pushing into the hinterland to the point where they’d cut so much forest down that what was left was in many cases too far away and too expensive to get.
After the gold rush
Wherever they went, they left in their wake depauperate tree plantations where the planted trees were those best suited to what would grow in harsh clearcut environments and would most quickly meet their legal obligations to “reforest” what they had logged.
The newly planted lands were deemed forests by both the companies that had cut them down and the provincial Forests Ministry that regulated them. And a public relations campaign built up around the whole log-it-and-plant-it enterprise: Forests Forever.
But the newly planted lands were about as far from a forest as one could get. They were, and remain, plantations. And when it comes to plantations, B.C. turns out to be seriously disadvantaged relative to the U.S. South, where Canfor and others have invested millions of dollars.
The late University of British Columbia sociologist Patricia Marchak foresaw this in her book Logging the Globe. The clear cutting of primary forests the world over would create a growing stockpile of tree plantations. And investment capital would naturally flow to where wood fibre could be grown as quickly and cheaply as possible.
This has often had serious consequences. Take the planting of eucalyptus trees that can grow a stunning three metres or more per year, but at the expense of radically altered groundwater tables, crashing biodiversity and increased risk of deadly wildfires. A case in point is Portugal, where non-native eucalyptus plantations used to produce fibre for pulp now blanket one-quarter of the country’s original native forest lands and in recent years have fuelled some of the deadliest wildfires the country has ever seen.
From cotton to pine
In the U.S. South, 130,000 square kilometres of pine plantations now stand — more than four times the area of Vancouver Island. These plantations occupy what were once highly diverse natural forests, many of which had been cleared away centuries prior to make way for cotton plantations tended by slaves and later sharecroppers.
Following the collapse of much of the region’s cotton production in the 1920s, these lands began to recolonize with native pine species, leading to a resurgence in logging activity. The pine plantations growing in the region are now “among the most intensely managed” on the planet. Extensive use of herbicides, insecticides and fertilizers has allowed pine crop yields more than four times greater than in the 1950s and 1960s.
In just 12 to 15 years, the trees in these sterile landscapes are thinned like carrots, with the thinned trees being chipped to make wood pulp or pellets. Then in another 10 years or so, many of the remaining and now much larger trees are cut down to make lumber.
The received wisdom in B.C. was that forest companies would be back to log their plantations in 80 years, but there are many trees in the province’s plantations that have been logged in half that time. Still, even an expedited “second-growth” or “third-growth” logging regime of 40 years in B.C. is twice as long as it takes a plantation in the U.S. South to yield trees for lumber.
Southern man
It didn’t take much for Canfor’s shareholders to glom on to the fact that southern pine had huge advantages over northern pine. But there were other attractive reasons to set up shop in the United States as well.
The U.S. lumber market is huge and is where Canfor and others have sold the bulk of their Canadian output for decades.
The U.S. South is also predominantly a low-wage region.
County governments in impoverished southern U.S. states long ago began offering incentives to draw companies to invest there. MacMillan Bloedel, the company that once dominated B.C.’s forest industry before winking out decades ago, was drawn to the state of Alabama in the 1960s in part because of such breaks.
And then there’s the issue of the powerful U.S. softwood lumber lobby, which has succeeded time and again in convincing the U.S. government to impose tariffs on Canadian lumber imports.
The tariffs, which Canfor said will more than double next year, were a factor in its decision to pull the plug on its Plateau and Fort St. John mills.
“Continuing to operate under these conditions would prolong the punishing anti-dumping duties and put additional operations at risk,” the company said earlier this month.
Canfor’s disappearing act
The speed and scale of Canfor’s investments in the U.S. South are captured in a directory of the company’s North American milling operations.
The directory lists a total of 39 Canfor facilities, of which almost half — 18 — are in the U.S. South. Another 16 are located in B.C. and a further five in Alberta.
But the directory is badly outdated. Seven of the listed B.C. mills either are now closed or soon will be. That includes Canfor’s massive Houston and Plateau sawmills — two of a handful of super-mills in the province — its Polar mill in Bear Lake to the south of Mackenzie, its sawmill and pellet mill in Chetwynd and its sawmill and pellet mill in Fort St. John.
With those facilities subtracted from the tally, Canfor is down to just nine facilities remaining in B.C., one of which is not a sawmill or pulp mill but a tree nursery.
A review of Canfor’s press releases over the past two decades shows the speed and the depth of the company’s U.S. investments, beginning with the outlay in 2006 of US$205 million to purchase the assets of New South Cos. Inc., a South Carolina-based lumber producer.
Other notable investments by Canfor following its New South acquisition include:
- Its June 2021 announcement that it was investing US$160 million to build a new state-of-the-art sawmill in DeRidder, Louisiana, that would produce 250 million board feet of lumber annually. The announcement highlighted that Canfor “was pleased to be receiving significant state and local incentives in support of the project.”
- Its May 2013 US$80-million purchase of Scotch & Gulf Lumber LLC, which gave it three more sawmills in Mobile, Fulton and Jackson, Alabama. The company would subsequently close the Jackson mill but announce a further investment of US$19.3 million to expand its Fulton mill. With the further investment in Fulton, Canfor received a 10-year tax abatement from the Clarke County Commission and the Town of Fulton.
- Its February 2018 decision to invest US$120 million to build a new mill in Washington, Georgia, a mill that would have a prodigious output of 275 million board feet of lumber each year.
- Its simultaneous investment in 2018 to upgrade another sawmill it owned in Georgia. The company noted then that the US$28-million investment at its Moultrie mill would boost work opportunities in a designated low-income community and that the company’s goal was to “exceed the region’s average living wage, as well as offering quality benefits.”
What next?
All of these announcements and more have played out and will likely continue to play out against the backdrop of further mill closure announcements by Canfor and other companies in B.C.
The province’s forest industry has, for the most part, run dangerously short of commercially viable primary forests to cut down. And the extensive areas of land that have been replanted in B.C. cannot compete — if speed and lower-value commodities are the goal — with other jurisdictions that can grow new trees in a fraction of the time it takes them to grow here.
Canfor has demonstrated repeatedly that its growth strategy is not in the province where it made its initial fortunes.
The critical policy question now becomes: What do we do with what we have left? If speed is not in our favour, what is?
Because in the foot race to grow tree crops quickly, B.C. is barely in the race and far from a podium finish.
Next: What would the parties to do to fix the crisis?
Read more: BC Election 2024, Environment
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