Late Thursday afternoon, West Fraser announced the shutdown of its Houston Forest Products mill operation and Canfor Corporation (Canfor) announced the closure of its Quesnel sawmill.
The Houston sawmill closure will affect 225 employees, and will be completed by spring 2014. The closure of the Quesnel mill will be completed in early spring, with 209 employees affected, although Canfor indicated those employees would be offered positions elsewhere in the company.
The decision to close the Houston operation is part of West Fraser’s Mountain Pine Beetle Plan, which includes exchanging forest licenses with Canfor to bolster the viability of other West Fraser operations.
“The mountain pine beetle devastation has and will continue to undermine the availability of merchantable timber in the interior of B.C.,” said Ted Seraphim, West Fraser president and chief executive officer. “The shutdown of our Houston mill has been a difficult decision and we will work closely with the affected employees to support them through this process. Our first priority is to explore opportunities to transition Houston employees to one of our other operations and we will provide assistance in finding new employment.”
Significant upgrades and modernizations were also announced for West Fraser’s Smithers and 100 Mile House operations. Whether or not those upgrades will result in more jobs is not yet clear. In total, $350 million in investments were announced by West Fraser, although some of those investment dollars had previously been announced.
West Fraser and Canfor exchanged forest licences in the Quesnel, Lakes, and Morice Timber Supply Areas (TSAs) to strengthen timber supply to remaining mills. Provincial approval of the exchanges is required.
The exchange of forest licenses and mill shutdowns are being blamed on the loss of timber supply following the mountain pine beetle epidemic.
“The timber availability in the Quesnel region following the mountain pine beetle infestation unfortunately leaves us unable to continue operation of our Quesnel sawmill,” said Canfor President and CEO Don Kayne.
In the north and central interior, West Fraser will maintain sawmills in Fraser Lake, Smithers and Quesnel. Canfor will continue to operate its sawmills in Houston, Vanderhoof, and Quesnel, as well as several locations in Northeast B.C.
Kayne added that the move may prevent further mill closures related to the mountain pine beetle.
“We want this to be the last mountain pine beetle closure we take at Canfor,” he said. “So we looked for a Quesnel operator who would be willing to exchange tenure in one of our other operating areas, allowing us to safeguard the future of another Canfor mill, in this case Houston.”
In Houston, within the next two weeks, West Fraser will begin a mill safety and worker retention program to keep the mill running smoothly until the spring shutdown. Dave Lehane, West Fraser vice president of woodlands, said the program will include bonuses to employees who remain with the mill until then.
“Our first priority was to communicate directly with our employees,” Lehane said. “Our second priority is now to ensure that the facility can operate safely into the spring.”
“We currently have 70 jobs on our internal job board, and we’re hiring at just about everyone of our locations,” Lehane added. “The real challenge is that employees may need to relocate. We will be working one-on-one with our employees in this difficult time.”
Houston Mayor Bill Holmberg found out about the mill closure only moments before the announcement was made public. Nechako Lakes MLA John Rustad called him about half an hour before the announcement yesterday. Rustad is working with the community to develop a plan to deal with the terrible news.
“The biggest concern is the loss of 225 jobs in Houston,” Holmberg said. “You’re not going to fill that hole. We’ve got to figure out how to mitigate the downfall.”