Another wave of sawmill closures swept across British Columbia in 2024, from West Fraser's Fraser Lake facility to Canfor's operations in Polar, Vanderhoof, and Fort St. John. As the Northern View reported, Chief Robert Michelle of the Stellat’en warned that “the economic impact for our communities will be dire,” citing job losses not just in the Fraser Lake mill but also among log haulers, restaurant workers and gas station employees. These closures disrupt entire local economies. It is clear that current conditions cannot sustain profitable operations, leaving businesses struggling and workers unemployed.
The fundamental issue lies in how Victoria approaches forest policy. The government faces mounting pressure from multiple stakeholders. Environmental groups advocate for reduced harvesting levels, while Indigenous communities seek both greater access to timber supplies and a larger role in forest management. While environmental protection and Indigenous rights are important considerations in forest management, and rightly so, the government's approach has failed to balance these priorities with economic sustainability.
Victoria has reduced industry access to timber and added regulatory complexity. To offset the job losses caused by these restrictions, the government is steering companies toward producing more value-added forest products—a shift they believe will require less timber while creating more jobs per unit of wood processed. While these products create jobs, their market remains limited, making this government intervention a risky strategy.
To support this transformation, they have spent $70 million through theManufacturing Jobs Fund and allocated timber supplies directly to value-added producers. However, even well-funded initiatives like this only offer temporary relief. While some value-added products are competitive, forcing this shift through subsidies risks directing investment toward ventures that may not be sustainable once government support ends.
The private sector, in contrast, has invested more than $1 billion in capital expenditures per year—far outpacing government subsidies. This long-term investment in new equipment and technology reflects a commitment to sustaining B.C.’s forest industry and supporting well-paying jobs. However, these companies can only continue making such investments if they have reliable access to timber and a stable regulatory framework. Rather than trying to reshape the industry through short-term funding programs, the government should focus on ensuring companies can operate under conditions that make investment worthwhile.
While U.S. tariffs and environmental challenges contribute to the sector’s struggles, the government's response has failed to address the industry's core need of stable timber access. This disconnect is evident in every company closure announcement, where economically viable timber supply consistently appears as a primary factor.
The industry's clear opposition to additional policy reviews was evident when the BC Council of Forest Industries responded to a proposed new forest policy review in 2024: "Another review of forest policy in B.C. should not be a priority right now." The message is clear—the sector needs concrete action, not more policy frameworks.
While some factors affecting the forest sector lie outside government control, Victoria can directly improve regulatory efficiency and fiber supply stability. High U.S. tariffs, combined with the economic urgency outlined in the throne speech, create an atmosphere that should enable the government to make the right decisions quickly. Reducing regulatory barriers, securing timber supply, and letting businesses decide the best commercial opportunities, will create the conditions for long-term growth in a sector that desperately needs stability.
Jerome Gessaroli is senior fellow at Resource Works and leads the Sound Economic Policy Project at the B.C. Institute of Technology.
