TLA boss David Elstone targets ailing contractor-company relationship

A profile of the executive director of the Truck Loggers Association

David Elstone | Photo: Chung Chow

Chopping wood or kayaking around Howe Sound driftwood are intrinsically gratifying activities for David Elstone.

Whether he is working on home renovations or exploring the West Coast’s natural beauty, the executive director of the Truck Loggers Association (TLA) is constantly reminded of the history of his Sunshine Coast community and the industry on which it was founded.

For those living in rural B.C. communities, life was built on the success and sustainability of the forestry sector. But for others living in urban areas, it is easy to forget the value, importance and economic vitality of one of Canada’s most important natural resources.

Even before he decided to pursue his bachelor of science in forestry in 1994, Elstone felt an enduring connection to the woods.

“It is important that people fully recognize what forestry is to our province. Too many of our urban areas don’t fully appreciate the importance of forestry.”

After completing his undergraduate degree at the University of British Columbia, Elstone spent nearly a decade as a financial analyst at ERA Forest Products Research – a position he felt might seem controversial given his love for Canada’s bountiful forests.

“You can’t make change standing on the outside.… You need to be part of the process,” he said. “That was always a huge motivating factor in embracing forestry in the beginning of my career.”

ERA is an independent financial research company that follows the global forest products sector, and, had it not been for B.C.’s commitment to sustainability, Elstone might have felt conflicted in his position. Instead, he felt a sense of pride.

He completed a business administration graduate diploma at Simon Fraser University in early 2003 and, as a registered professional forester (RPF), belongs to a select group of designated forest professionals responsible for looking after the forests, forest lands and forest resources of B.C.

RPFs are also called upon “to make decisions such as when, where and how to harvest and reforest areas.”

B.C.’s forestry sector has had a difficult year.

Expiration of the Canada-U.S. softwood lumber agreement’s grace period following the expiration of the 2006 deal resulted in the United States slapping export levies of up to 24% on Canadian lumber producers. The duties hit many smaller B.C. producers especially hard.

Meanwhile, the province’s worst wildfire season on record has thus far destroyed 1.19 million hectares of B.C. forestland.

Finally, uncertainty over continuation of the North American Free Trade Agreement has worsened an already difficult year for a sector that remains one of the most reliable contributors to Canada’s economy.

However, despite the negative publicity, the sector has performed surprisingly well in 2017’s first two quarters. Forestry giants Canfor Corp. (TSX:CFP), West Fraser Timber (TSX:WFT) and Interfor Corp. (TSX:IFP) all reported strong earnings for the first half of the year.

Yet beneath what catches regional headlines there is an inner illness clogging the once-
fluid veins of the sector. Big-name industry leaders reporting strong earnings might be indicative of the issues that Elstone encounters daily.

“There is an issue that we often talk about, our top advocacy issue, and it is a brewing crisis that could have just as big or even a bigger impact on the forest industry in B.C., and that is the issue of what is happening with our contractors.”

Elstone has been at the helm of the TLA for more than two years but admits ties with logging contractors have been fraying since early 2000 when a large number of new policies that benefited tenure holders were instituted.

The TLA represents 480 independent forest contractors and their suppliers operating on the coast of B.C. The association, along with other independent contractors, accounts for nearly 90% of trees harvested in the coastal forest industry.

Elstone has watched the working relationship between contractors and the entities they serve become increasingly strained, forcing many out of business.

“The problems are wide-ranging, but the relationships between contractors and their tenure holders, the major forest products companies … that relationship is broken,” he said.

“It is very frustrating to see people with a downward trend in earnings and profitability, so much so that [contractors] are being driven out of the business, but then see the earnings of companies that I used to follow at ERA … seeing record earnings, showing a veil of prosperity.”

Elstone has been hearing these concerns grow louder during his employment and is quick to note that while the issue doesn’t gain widespread media attention, it is a dire situation that will inevitably affect many more workers.

“Over $13 billion to $14 billion worth of international sales of our forest industry rides on the shoulders of logging contractors,” he explained. “If we cannot move logs from the bush to the throngs or harbours, there is no point in having a softwood lumber agreement because you won’t be milling anything up.”

To address the issue, the previous government initiated a contractor sustainability review, much to Elstone’s pleasure.

“In terms of accomplishments, I’m very happy that in the last two and a half years … we were able to get this contractor sustainability review conducted, which is basically like a public inquiry.”

According to the Government of British Columbia website, the review – one of the key action items under B.C.’s forest sector competitiveness agenda – will aspire to “improve the competitiveness of British Columbia forest sector contractors and licensees.” The review is entering its next phase, spearheaded by former politician and cabinet minister George Abbott and his partners at Circle Square Solutions.

As for personal goals in his role, Elstone hopes his efforts at the TLA can remind the people of B.C. just how indispensible the forestry sector is.

“This is the best resource in the world, and one of the reasons that motivates me to be in the industry every single day.”