High cost of logs hurting lumber mill workers throughout the Okanagan - InfoNews

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High cost of logs hurting lumber mill workers throughout the Okanagan

The high cost of these logs sitting in Okanagan Lake is probably the main reason Tolko closed its Kelowna mill. Expect them to be trucked off to other Tolko mills in the Okanagan.
November 14, 2019 - 6:30 PM

Mills throughout Tolko's B.C. operations will be shut down for two weeks over Christmas the company announced Nov. 14, just a week after revealing the permanent closure of its Kelowna mill.

The high cost of raw logs was cited as one of the reasons for the Christmas shutdown, which will take place from Dec. 21 to Jan. 6, and according to the workers' union president, that's also the main reason for Kelowna's mill closure.

“Had there been viable cost logs coming into the mills that weren’t so highly-priced, that mill would still be running and still be making money,” Pat McGregor, president of United Steelworkers Local 1-423 told iNFOnews.ca today, Nov. 14. “But because the cost of logs, which they’re telling us is over 75 per cent of their overall cost, the mill can’t run.”

The Kelowna mill also only produced stud lumber — eight and nine-foot long 2x4s and 2x6s. The market for such wood products is very weak right now.

Tolko’s Armstrong plant also makes studs and that part of the mill is on a work share program where they work four days a week and get paid by Employment Insurance for the fifth day. That mill also has a plywood plant that is more viable.

The closure in Kelowna has a multi-million dollar economic impact to that city but the shutdowns and the uncertainties also impact Tolko operations and forest workers in other Okanagan towns, such as Armstrong, Lavington and Lumby.

Mill worker wages start at about $30 per hour, McGregor said, and go up from there. So, they’re making at least $60,000 to $70,000 a year. Multiply that by the 200 union workers who lost their jobs in Kelowna and that adds up to an annual payroll of more than $12 million per year.

The Central Okanagan Economic Development Commission told iNFOnews.ca that it doesn’t know what the effect the closure will have on the local economy since it doesn’t track such things.

But McGregor has some idea.

“The guys aren’t buying new cars and mortgages,” he said. “It’s quite a financial blow to Kelowna.”

But it’s not just Kelowna and not just the Tolko employees.

Pulp mills, for example, will lose supply of chips and pulp logs and the people who drive those trucks will not have those trips to make.

“Machine repair, contractors, loggers, office staff that is also affected,” McGregor said. “It has a huge impact. It’s not just 200 workers at the mill. It’s everything that helps get that log to the mill, forest techs that lay out the cutblocks, the actual fallers, logging truck drivers.”

The forest technicians are about to be laid off for five months, he said.

Reduced work weeks and cuts of shifts impact all the workers throughout B.C. and their buying habits in their own home towns.

Tomorrow, McGregor will meet with Tolko representatives for the first time since the closure was announced last week.

He has some ideas on how his members can help with dismantling the mill and helping move the logs off site and out of Okanagan Lake. He expects the logs will be shipped to other Tolko mills and loading them onto trucks is work done by his members

The official closure is on Jan. 8, which is when severance will be paid. That timing is helpful to his members because a large payment this year could have pushed some into higher tax brackets.

He also has to work on bridging some older workers into their pensions. In some cases, they could benefit from government-funded bridging programs but in other cases that doesn’t work because they would give up more in severance pay than they would get with the bridging funds.

The province has training fund programs and he’s asked them to set up a transition office in Kelowna for the Tolko workers.


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