With continued steep border tariffs from the U.S. and new trade threats in Asia, B.C.鈥檚 Interior forest industry is grappling with new regulations on forest waste recovery that it says it can鈥檛 afford.
The NDP government moved ahead with its promised overhaul of Interior logging regulations at the start of the year, implementing what the forests ministry calls 鈥渁lternative scaling methods to support cost-effective removal of logs designed to become a secondary product, such as pulp and paper, pellets and energy.鈥�
As with new logging rules on the B.C. coast that have since been fine-tuned, the industry says its initial take on the Interior system is that it is not cost-effective.
It鈥檚 a 鈥渇undamental economic problem鈥� for an industry that is already struggling with North America鈥檚 highest log costs, said Susan Yurkovich, president of the B.C. Council of Forest Industries.
鈥淚f you鈥檙e talking about the coast, the harvest costs before stumpage are north of $100 a cubic metre,鈥� Yurkovich said in an interview with Black Press. 鈥淵ou bring it out and you can get $40 or $50 for it. Companies cannot lose that quantum on a sustained basis and expect to continue to be companies.
鈥淚n the Interior, the costs are a little lower. I would say on average [harvest costs are] about $70 a cubic metre in the Interior. But still, when you bring that waste out you鈥檙e getting about $30 for it.鈥�
The province did a consultation tour with the Interior industry on the issue last summer, promising a 鈥渨hat we heard鈥� report would be released by the end of 2019. But with the ministry grappling with an overhaul of waste wood zones on the coast, where most logging stopped due to stumpage costs, waste regulations and a long strike by the United Steelworkers against Western Forest Products, the report and further regulation have been delayed indefinitely.
Already in force in the B.C. Interior is a new regulation that adds additional penalties for late reporting of wood waste. That鈥檚 another burden for an industry on its knees, says B.C. Liberal forest critic John Rustad.
鈥淭here鈥檚 a tremendous amount of additional reporting required for companies, in tabulating all the information and putting it into government,鈥� Rustad said. 鈥淚t was always there, but the time frame and stringency in terms of information is what has changed here.鈥�
Rustad says everyone agrees that B.C. logging leaves too much usable wood on the ground, beyond what foresters say is necessary.
鈥淧art of that is utilization standards were lax when we were trying to clear out as much of the pine beetle as they could,鈥� Rustad said. 鈥淭he bottom line is we shouldn鈥檛 be leaving the waste behind in the woods. We should be utilizing the whole log to the best of our ability, keeping in mind you have to leave some behind for the critters, the biodiversity on the landscape.鈥�
Wood pellets, which can use almost any waste to manufacture, are in high demand in Japan, where most nuclear plants are still idle after the 2011 Fukushima earthquake and tsunami. Japanese buyers have increased their purchases of pellets to the point where they have cut off retail sales and local users can鈥檛 keep their pellet stoves running in a cold winter.
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Japan has long been a strong export market for B.C. lumber, but that too is under threat. A large new wood pellet export terminal recently opened in Mississippi, as B.C.-based foreign companies have expanded into the southern U.S.
And a new report by the says a tentative trade deal between Japan and the U.S. effectively ends Canada鈥檚 advantage against its giant, and often hostile, southern neighbour.
鈥淐anada鈥檚 advantage of the U.S. in Japan from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership lasted a whole 13 months,鈥� the report says. 鈥淭he U.S. will eventually expand its partial agreement with Japan and further erode one of the most significant advantages that the CPTPP gives Canada in Japan 鈥� tariff and non-tariff advantages over American exporters.鈥�
tfletcher@blackpress.ca
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