Sawmill closures are not a new thing in British Columbia. There’s an attitude in the province that whatever else happens, “There will always be logging in B.C.” The industry as a whole has gone through plenty of boom-and-bust cycles as the price of timber products has varied over the years and decades. But, over those same decades this process of boom and bust has slowly devastated B.C. communities and led to the hollowing out of small towns up and down Vancouver Island and the mainland. It has also led to a forestry industry that is concentrated infewer and fewer mills and companies. Forestry companies assert that, at least in theory, those consolidated mills left operating are on a firmer financial footing. If that is true, why is B.C.’s forestry sector still collapsing? The recent and sudden spate of closures in the major mill centres of Prince George and Port Alberni, with many more predicted this year show that the current crisis is more than just another bump in the road.
Arguments from the mainstream press on mill closures will either directly or strongly imply that the blame for this crisis falls on government obstruction of logging old-growth forests. As old-growth trees are far larger, they yield far more usable lumber immediately; while the managed forests take years to produce smaller, second-growth trees which yield far wood per tree. This means that old-growth forests are extremely valuable and sought after to the forestry industry. But one important fact that is downplayed by industry is that in March of last year the price per thousand-board foot of lumber plummeted to $360 USD. This is a massive drop from lumber’s post-pandemic peak of over 1,600$ USD per board foot. Considering that the break-even point for most sawmills is between $450 and $500 USD, it’s not just “government regulation” that’s strangling the industry.
If anything, the B.C. government under John Horgan, and now David Eby, has gone out of its way to help the forestry companies continue making their profits at any cost. They infamously allowed logging in some of the last remaining old growth forests in the province, and have consistently subsidized the industry instead of simply allowing capitalism and market forces to close these mills. The corporate media, acting as tribunes of industry instead blame “old growth deferrals”, “government land preserves”, and even “caribou habitat protection” as the culprits.
The province has gone above and beyond in its effort to give the forestry companies what they want. In fact, logging old growth has created political disasters for the B.C. NDP, especially after the Fairy Creek debacle. And it’s not just forestry, from Wetʼsuwetʼen to the Fairy Creek protests, blockades and mass opposition have exploded onto the scene every time the B.C. NDP has agreed to push through some new project with environmental repercussions. Given how much the NDP has kneecapped itself for the sake of oil barons and sawmill owners it’s hard to see how they could have done much more for the forestry industry without actually destroying themselves.
It’s the economy, stupid
From January of last year to January of 2023, B.C. forestry product sales fell from around $1.2 billion per month to just over $900 million, an overall decrease of 21 per cent. Nearly the entirety of that drop in exports was due to a 40 per cent loss in softwood lumber exports, mainly to the United States. Since the start of 2022, central banks in the United States, and much of the rest of the world, began raising interest rates in an attempt to rein in inflation. And yet, inflation has continued to erode the purchasing power of wages. This has led to something of a paradox in U.S. housing and a worst case scenario for B.C.’s forestry industry. Higher borrowing costs helped drive higher overall costs of housing construction in the last half of 2022, while the actual number of new houses built fell. More money made less houses. Fewer houses means less demand for lumber, and with that, a fall in the price of lumber and potential unprofitability for sawmills across B.C. and North America. In March 2023, new housing starts for single family houses in the U.S. were down 31.6 per cent year over year.
The effects of higher interest rates show that the “solutions” of the past are driving the crisis we face today. First came the corporate COVID handouts, the injection of money into the economy during the pandemic to stave off an economic crisis. Then as that led to record inflation, the “solution” of raising interest rates, and “provoking a recession” was raised by the Bank of Canada, and now we are seeing the results. Higher interest rates don’t just destroy banks like SVB. They’ll destroy even productive sectors of the economy.
Capitalism means production for profit. The forestry industry of B.C. and the products it creates may be useful, and even needed around the world, but if it’s not profitable then the industry will not survive. As capitalism enters into crisis, nothing is certain, not even that “there will always be logging in British Columbia”. The only way to actually save the jobs and future of the small towns across the province that rely on logging is to nationalize the industry as a whole and run it under workers’ control. This does not mean nationalization while the industry is unprofitable, only in order to privatize it in better times, like the Federal Liberal’s plan for the Trans Mountain Pipeline. But instead, nationalization by and for the working class. The working class has a need for lumber and pulp products. B.C. has been going through a dire housing crisis for over a decade, as housing prices have spiked so high, that workers have been priced out of their homes. A nationalized forestry industry under workers’ control could produce according to need, not profit. It could also put resources into more sustainably managing forests, saving old growth for the future.
The continual closures of sawmills show that the B.C. NDP’s strategy of subsidizing and pandering to the private forestry industry is a proven failure. They have not saved jobs, nor will they prevent the small towns near these closed mills from becoming ghost towns. And while they have not saved jobs, they’ve drained state funds which could have gone to healthcare, education, or alleviating the housing or opioid crisis. The only future for forestry in B.C. is in nationalization and workers’ control.