Gorman Bros. Lumber's machine sorts logs in Kelowna's South Slopes.

(ROB MUNRO / iNFOnews.ca)

KELOWNA - The crises in the Interior forest industry that led to a number of recent mill closures and ongoing cutbacks have been decades in the making.

That’s the perspective from Nick Arkle, CEO of the Gorman Group of mills based out of West Kelowna and with operations in places like Salmon Arm, Lumby and Revelstoke.

In many ways, today’s problems started when Arkle was starting out decades ago.

“When I was a young guy, before I went off to university to study forestry, I was working in our woodlands department here at Gorman’s – so we’re talking 1975, 1976,” Arkle told iNFOnews.ca.

“The mountain pine beetle infestations, while they’ve always been kind of endemic in the province — they were always here — that was when they started to be experienced at a sort of epidemic level.”

By the 1990s, massive areas of B.C.’s forests had turned red as trees were dying from beetle kill.

That was due, in part, to the fact that much of B.C. marketable timber is Lodgepole Pine and it was getting old. After 120 years, just like humans, trees weaken and become susceptible to attack, Arkle said.

The devastation caused by the beetle prompted the government and industry to ramp up the harvest of the damaged trees so they could be turned into marketable lumber before they rotted.

Industry leaders always knew this was temporary because, as the damaged wood was used up, there would be fewer healthy trees of a suitable age to fill their mills.

Some companies, including Gorman's, began making adjustments years ago.

Many CEOs, concerned about the economic health of their employees and the, often small, communities where they were based, tried to keep employment up for as long as they could.

But climate struck some serious blows over the last couple of years.

Tinder dry forests and massive wildfires not only forced some mills to close temporarily but kept loggers out of the bush, creating a shortage of lumber and the consequent spiking of prices last summer.

It was a price “overreaction” in one direction that soon became an overreaction in the other direction – dropping prices to below the cost of production, Arkle said.

Buyers stopped investing in lumber, expecting the prices to decline. As housing starts dropped off last fall – as is normal - lumber yards were buying only what they needed at the moment.

As the home building season was about to take off this spring, severe storms crippled construction, particularly in large U.S. markets.

Lumber prices, therefore, stayed below the cost of production at the same time as the supply of fresh logs was drying up. Mills were scrambling to buy enough logs to keep going, driving up their costs even while the price of the finished product stayed low.

“Everyone was preparing for it (decrease in the supply of logs),” Arkle said. “The problem was this year, the whole process got sped up. We thought it would evolve over three to five years.”

That led to entire mill closures in the Cariboo, North Thompson and further north along with temporary shutdowns and the cutting of shifts as far south as the Okanagan.

This is something that’s likely to get worse before it gets better, Arkle said.

“The supply of logs, that’s not going to come back for quite a while, not until 2050 to 2060,” he predicted. “We’re going to see a steady drop for the next 10 years as we get to a harvest level that is sustainable.”

While there will be job losses there will also be changes in what skills are required to work in these mills.

“We employ as many people today as we did 10 years ago,” Arkle said. “It’s just that the employee transferred from someone trying to get volume through the mill to someone trying to get value out of the mill.”

That means more mills are investing in technology in order to get more saleable product out of each log.

In some cases, that will mean job losses but, in mills like Gormans, that also means there are as many computer experts as there are people physically pulling lumber off a chain, Arkle said.

So, what’s to be done?

“A lot of what you see, whether it’s here in the Okanagan or in the Merritt area or the Kamloops area, heading up into the Cariboo, quite simply, it’s just too many mills for a reduced amount of fibre available to them. As painful as it is, it’s a period that we’re just going to have to go through.

“What I would like to see is a lot more planning around that transition period. I want to see government figuring out how do we help these communities make that transition. There’s no point trying to jump in and save companies. Really, all you’re doing is prolonging the inevitable. I know that sounds really harsh, but, unfortunately, that’s where we’re at. It’s just how do you do that and try to have as little pain as possible for communities and for employees?”

Here’s an industry list of mill cutbacks and closures. More have been announced since this list was compiled in early June, including this one.

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