The District of Houston wants more information from the Competition Bureau on the recent ruling about the Canfor and West Fraser timber swap.
The District sent a Freedom of Information Request to the Province in early-March.
Canfor traded West Fraser their timber rights in Quesnel for West Fraser’s timber in Houston. Announced October 2013, the deal included shutting down Houston Forest Products (HFP) and a Canfor sawmill in Quesnel.
The Federal Competition Bureau and the Provincial government reviewed the trade of timber licences to see if it restricted the competitive market.
The B.C. Minister of Forests can cancel forest licences if something unduly restricts the competition in the market for timber, logs or chips.
The Competition Bureau ruled March 3 that the exchange of timber rights between Canfor and West Fraser did not unduly restrict competition.
The Federal Bureau refused to comment on the ruling.
Ministry of Forests Public Affairs Officer Greig Bethel said the provincial assessment found that “while the mill closures did reduce the number of processors, the tenure exchange itself did not in an of itself unduly restrict competition.”
He said “the regions declining timber supply will lead to fibre supply challenges so the tenure exchange (in addition to the mill closures) will provide for a more efficient supply of timber for mills that remain open.”
Houston Mayor Shane Brienen said the Minister of Forests called him March 3 about the Competition Bureau ruling.
Brienen says the Province feels there are enough companies operating in this area: West Fraser operates Pacific Inland Resources in Smithers and Hampton Affiliates runs Babine Forest Products in Burns Lake.
“They don’t feel [Canfor] has the whole market to themselves,” he said.
“Three is the magic number in competition,” added Councillor Jonathan Van Barnevald.
Van Barneveld says he is not surprised by the ruling.
“From the get-go, people knew that nothing was going to change that deal,” he said.
Mayor Brienen agreed.
“We felt all along that they would allow it.
“I don’t know if it is the best thing for Houston, or if it is the best for the Province because at the end of the day, if you don’t have strong competition out there, then you’re not getting the best dollar and stumpage could go down.”
Brienen said he thinks “what was going on in Quesnel really moved that deal ahead.”
Looking at the timber supply review and coming harvest cutbacks, “you can see we have five years or so left before we were running into major trouble,” Brienen said.
“It was coming eventually, and we were going to have trouble with our fibre supply, but it came a little sooner just because of the way things were going in Quesnel and how the puzzle fit together for those two companies.”
Van Barneveld agreed.
“You can see how the deal in Quesnel probably needed to happen. And Houston Forest Products was basically the victim of that deal.”
Van Barneveld says Houston people seem skeptical of the Competition Bureau process.
“It’s so secretive and not very transparent. You don’t know what’s being analyzed and what’s not,” he said.
“It’s hard not to feel jilted.”
Looking ahead, VanBarneveld says it is the end of previous lobbying for some of West Fraser’s timber rights to go to Community Forests.
“The ruling basically puts the nail in the coffin a little bit for any further advocacy for smaller operators,” he said.
Asked how he views the timber market, Van Barneveld said he can’t say.
“In generalities, one less operator is less competition,” he said.
“It’s one less person competing for wood.”