Future of forestry at risk

It is what it is…

By Marc Chayer

 

In considering this article, I did not want to run the risk of sounding overly dramatic, but one cannot deny the severity of the situation we are facing as a community. An ugly prospect hangs in the air – that many in our community face the possibility of losing their jobs due to the seemingly endless assault on our forestry sector including the latest efforts in caribou recovery planning.

Now it would be easy to lay this at the hooves of the caribou, but that would be unfair. There are many reasons the forest industry is feeling under siege such as the softwood lumber dispute with the US, increasing regulatory burdens, and rising costs including power costs and new carbon taxes. But, caribou looms large as an issue of concern because it is reducing the availability of the industry’s most important input – trees.

What makes this frustrating for local producers such as Millar Western and Alberta Newsprint is that they already factor caribou habitat protection into their plans which are approved by the provincial government before implementation. For forest companies operating in Alberta, responsible forest stewardship including wildlife habitat management is not only legally required but common sense – it ensures protection of resources for the benefit of future generations. Forest professionals use the latest science to ensure that caribou and other species have a place to live as part of their regular work of sustaining bio-diverse forests.

Despite these current practices, new habitat conservation measures are likely on their way. To give some background, the development of caribou recovery plans is being driven by the federal Species at Risk Act. While caribou populations Canada-wide are strong, certain woodland caribou herds are listed as endangered including 12 in Alberta. The provinces were required to provide the federal government with recovery plans by October 2017; however, many plans, including Alberta’s, will be delayed.  Based on a 2016 draft plan for the Little Smoky and A La Peche herds in the Whitecourt region, it is expected that the Alberta government will curtail harvesting in caribou zones which will affect timber availability, mill productivity, and forest sector jobs including contractor jobs throughout the province.

This past week, I had the opportunity to stop by Millar Western’s mill in Fox Creek and engage in a casual conversation with one of the employees there. When I asked a simple question, “How is it going?” I heard this reply: “Good, but we need trees!” The log pile was low, but that was mostly due to weather and the late start-up of the winter log haul. While the pile will be replenished to sustain the mill through the next year, it is less certain what will happen in the years to follow.

In speaking with Millar Western staff, I learned that the company has taken on the task of addressing fibre shortages. First, it is trying to increase its purchases of private wood, but these opportunities are limited and potentially unaffordable depending on the distances travelled. Second, with conifer trees in greatest demand, it is looking to diversify its product mix to under-utilized species, for example launching an aspen lumber project.

But launching a new product can take years. So, while Millar Western develops markets for aspen lumber, it is looking for enough conifer timber to keep its sawmills going. Part of those efforts include an application for a Commercial Timber Permit to harvest 120,000 m³ of aspen and 80,000 m³ of conifer in the White Zone. What is the White Zone? The province is divided into two areas. The Green Zone is where most forestry occurs though it is also managed for conservation, recreation, energy development, and grazing. The White Zone is mostly privately owned, but forested public land may also be managed for timber production on a sustainable basis. This is where Millar Western is looking to harvest, specifically in the Groat Creek, Hard Luck Creek, and Chip Lake compartments of an area called WO1.

If granted the permit to operate in WO1, Millar Western would manage the lands in a manner consistent with the Alberta Operating Ground Rules: it would harvest on a sustained yield basis, and ensure the renewal of healthy forests through a combination of tree planting and natural regeneration. In addition to accessing fibre that will help it to maintain current employment at Millar Western, harvesting in this area would also serve to “Firesmart” the targeted stands which have not been thinned or harvested in years. As we have seen in both Slave Lake and Fort McMurray, thick overgrown forests provide fuel for fast moving forest fires, and put people and property in harm’s way.  Sustainable forest management can help to reduce that risk.

As part of its permit application, Millar Western engaged the public through open houses and made presentations to the councils of Woodlands County and the Town of Whitecourt, both of which endorsed the plan. The company also dropped blocks from their initial plans in response to concerns heard from concerned stakeholders. The permit application is now with the province for review.

In considering whether to support Millar Western in its plans, it is important to think about what is at stake.  First, there are 550 jobs at Millar Western. As a company, it generated $679 million in economic output in Alberta alone and spent $345 million on wood, labour, taxes, and levies. The words “labour and taxes” should certainly grab your attention because most of that ends up in our community.

Some people might think, “Well, I don’t work in the forest sector, so this doesn’t affect me.” Think again. According to an independent economic impact study commissioned by Millar Western, the loss of one sawmill shift would remove 86 full-time jobs and result in $49 million less revenue. The broader impact to the local area would be the loss of 302 jobs and $9.3 million in tax revenue.

These kinds of policy issues are not limited to Millar Western, however.

In a recent meeting of the Whitecourt & District Chamber of Commerce attended by the Alberta Ministers of Economic Development & Trade and Agriculture & Forestry, senior management from Alberta Newsprint took the ministers to task for the policies that have harmed forest operations.

Mike Putzke, General Manager, outlined three areas where provincial policy has directly impacted the ANC mill: carbon tax, the Caribou Range Plan, and transmission rates regarding power.

He stated emphatically that, as a company, they are being forced to look at a 20 per cent reduction in the workforce due to the costs associated with these regulations as levied by the provincial government. His question to the ministers was a simple one, “What are you going to do to change this?”

The response was indirect and without substance. The ministers encouraged Putzke to reach out to them to explore ways they can assist with the issues he was presenting.

To this point, Putzke points out the following, “The other thing that threatens the Whitecourt Forest Industry is the increase in power prices related to its green energy transformation plan. Retiring cheap coal (at no benefit to the globe given China’s massive expansion of coal) and replacing it with expensive renewables is a train wreck in the making.”

The current cost of power to ANC is $20/mwh and under the current plan it’s expected to be $83/mwh by 2022. This is a quadruple price increase in five years. Would anyone wish to fathom a guess as to how much more ANC can get for newsprint in the same period? I would expect it will not be four times the current pricing and this simple move alone will render the mill uncompetitive in a North American market throwing quality jobs onto the scrap heap.

While the direct effects are obvious, the rates for power will provide a double strike in the fact that new projects considering Alberta for capital expenditures will be dismayed about making any investments in the province. As we have seen already, the current political environment has led to three years’ worth of divestiture by major oil producers who have bailed on this once vibrant province.

In my opinion, this is what’s wrong with the provincial government today and how it approaches issues. Someone screams that the caribou herd is thinning, and we have reactions that overstep what is logical. There are distinct failures on the part of the government in that they first do not assess what the impacts will be to people and communities and secondly, they do not or will not engage in a discussion with those on the front lines as to what is the best possible outcome with the stated objectives in mind.

This approach is evidenced by the fact that only after the submission of the Caribou Range Plan to the feds did the provincial government agree to research the socio/economic impacts of that plan it if were to be implemented. Basically, now that we have a plan to save the caribou, we need a plan to save jobs and communities. Wow!

With the consultations now being planned, the Chamber of Commerce saw the opening and questioned if it will be a part of the discussion? The ministers having seen the forest for the trees… finally, agreed that we need to be consulted in this community as the impacts are already being felt.

With the recession in oil and gas seemingly falling away, we now have government struggling to keep its power base in the city and to do so is to throw our resource-based economy under the bus. Government policy threatens both of our major industries here in Whitecourt /Woodlands.

An example of government policy affecting our jobs is the plan regarding the reduction of methane gas being released. Canadian Natural Resources is far above what has been expected and is almost halfway to the anticipated target and, yet, government will once again not entertain the plan it has embarked upon despite the fact it works. In the estimation provided by CNRL and the Canadian Association of Petroleum Producers, the current government strategy would impact 7,000 jobs in Alberta.

Now let this sink in, government policy, and only government policy will be what causes significant job loss in the two industries that fund this province. Not prices, not foreign competition, not even Trump. Factor in the federal Liberals and their stance on Alberta in general and you can see what we are up against.

Folks, standing behind our neighbours is not a social media tweet or Facebook message of support to those affected. In simple terms, it’s supporting the strategies being put forward by Millar Western, Alberta Newsprint, and major producers as they try and navigate a minefield of policy initiatives that is aimed at saving everything except our jobs and communities.

Let your MLA know it’s important that local forest companies have enough timber to keep their mills running, and urge them to draw up caribou recovery plans that support the economy and conservation. Second, let the federal government know that you think its species-at-risk legislation is flawed – that the parameters for caribou planning are based on old science and are likely to do little to improve caribou populations. As well, by taking a species-by-species rather than a whole-ecosystem approach, legislators are putting us all in the position of having to go through this process again and again in future as we deal with other at-risk species providing perpetual uncertainty to all operators. That’s no way to manage a land base.

I have said it before in past articles, while we may not like the log, gravel, and oil trucks in front of us on a two-lane road, while we may not like waiting for the train, they are all examples of activity we need in both the town and the county to provide us with the things we do like. The trucks and trains haul what your neighbors produce and without them, we have a problem.

This is not the time for “not in my backyard.” Not in my backyard can extend to the loss of facilities and services we have grown to expect and, at some point, both councils will have serious decisions to make about where tax dollars need to be spent. We can scream all we want about it being our tax money but in the end, two out of every three dollars comes from those industries needing our support.

We need to pick a side folks.

It is what it is…