The forest products sector has long served as B.C.’s leading source of exports and a key driver of jobs and other business activity across the province. But the industry has fallen on hard times—to the point where it is no longer B.C.’s number one export sector. Some of this reflects fallout from the pine beetle infestation that devastated forests in the interior in the early to mid-2000s. The beetle destroyed a sizable fraction of accessible fibre in the affected areas. More recently, wildfires have added to the downward pressure on the timber supply.
However, government policy decisions have also played a big role in the jaw-dropping decline in timber harvesting which, in turn, has reduced the supply of logs and other raw materials needed by lumber manufacturers and pulp and paper mills operating in B.C. A host of policy changes adopted by the province have slashed fibre supply, sterilized an ever-growing portion of the Crown land base, increased operating costs for logging contractors and lumber companies, and created endless delays and uncertainty across all segments of the industry.
B.C. has seen staggering declines in the annual timber harvest—from 70 million cubic metres in 2012-14 to roughly 35 million cubic metres last year. Less harvesting on “public lands”—lands owned by the Crown—accounts for almost all of this. Moreover, actual volumes of timber harvested from public lands have fallen well below the amounts officially approved by the Ministry of Forests. In 2023, the harvest was 40 per cent lower than the annual allowable cut (AAC) set by the government. This is unnecessary and unacceptable.
Since 2017, some 30 B.C. sawmills have closed or been forced to take extended downtime, owing mainly to their inability to obtain timber to support manufacturing. This is equivalent to a 35 per cent reduction in the province’s total sawmilling capacity in just seven years. Current policy directions point to further pain in the next few years.
The consequences of this mix of “natural” and “policy-driven” changes affecting forestry have been devastating for logging contractors, workers in the industry, and forest-dependent communities. And with B.C.’s leading forest companies increasingly investing and seeking to expand their business footprints elsewhere—in other provinces, the U.S. and even Sweden—the signs are troubling.
All of this underscores that both shifts in market conditions and government policy choices have combined to create unprecedented challenges for logging companies and lumber manufacturers trying to do business in the complex, high-cost operating environment that has evolved in B.C.
What can be done to improve the outlook for B.C.’s foundational forest industry?
In terms of provincial government policy, the near-term priority should be to stabilize and then gradually increase the accessible fibre supply. Over most the last decade, the province has prioritized conservation values and other environmental objectives and downplayed the importance of sustaining an economically viable and competitive forest industry in British Columbia. A better balance is needed.
A second priority is to advance agreements with First Nations to increase their role in the forest sector and provide for greater revenue sharing to expand benefits for First Nations.
Another policy commitment should be to accelerate innovative management and regulatory models for the forest industry to expedite land use planning, speed up regulatory decision-making, improve wildfire mitigation and pursue biodiversity goals while also ensuring a reliable fibre supply for the industry.
It is time for policymakers to shift gears. Over the last several years, they have overlooked the commercial needs and the economic benefits that flow from the presence of a significant, globally competitive B.C. forest products industry. The balance among the sometimes-conflicting objectives that necessarily shape forest policy—particularly in a jurisdiction where the Crown owns most of the resource—has been lost. It is time to recalibrate policy to put a higher priority on maintaining and expanding fibre supply, improving the industry’s cost competitiveness and ensuring that the large B.C.-based companies that have contributed to building a world-class forest products cluster remain anchored in the province and continue to be an important part of the British Columbia business community.
Jock Finlayson is chief economist of the Independent Contractors and Businesses Association. Ken Peacock is chief economist at the Business Council of British Columbia.
