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Canfor announces major mill closures in B.C.

Canfor blames provincial 'policy changes' and 'increased regulatory complexity' for crimped timber supply
Russ Taylor, left, and Paul Quinn discuss B.C.'s declining forest industry at Truck Loggers Convention

Canfor Corp. (TSX:CFP) will permanently shutter a sawmill in Bear Lake, B.C., indefinitely curtail one production line at a pulp mill, and suspend a planned investment to revitalize its shuttered sawmill in Houston, B.C.

Canfor blamed “persistent shortage of economically available timber and challenging operating conditions in northern British Columbia” for the closure decisions.

The closure plans include permanently shutting down its Polar sawmill in Bear Lake, north of Prince George. That closure alone will affect 180 employees.

Canfor Pulp Products Inc. (TSX:CFX) simultaneously announced it will indefinitely curtail one production line at its Northwood facility in Prince George. The curtailment of that production line is expected to affect 220 works.

Canfor also announced that a previously announced plan to invest in the revitalization of its Houston, B.C. mill, which it previously shut down, has been shelved.

Last year, Canfor announced it was shutting down its Houston sawmill, but said planned to redevelop the mill. That announcement came after the company announced it would permanently shut down its pulp mill in Prince George.

But Canfor said Thursday it is shelving the Houston mill redevelopment. The company blamed provincial policies for a shrinking timber supply.

“The ability to reliably access enough economic timber to run our manufacturing facilities is critical for our business," Canfor president Don Kayne said in a press release. 

"Unfortunately, while our province has a sufficient supply of timber available for harvest as confirmed by the Allowable Annual Cut set by BC’s Chief Forester, the actual harvest level has declined dramatically in recent years.

"In 2023 the actual harvest was 42 percent lower than the allowable cut, a level not seen since the 1960s. While this decline is partly the result of natural disturbances – beetle infestations and wildfire particularly - it is also the result of the cumulative impact of policy changes and increased regulatory complexity.

"These choices and changes have hampered our ability to consistently access enough economic fibre to support our manufacturing facilities and forced the closure or curtailment of many forest sector operations, including our Polar sawmill."

Canfor Pulp CEO Kevin Edgson likewise said a lack of fibre was to blame for the decision to shut down one production line at its Northwood pulp mill in Prince George.

“The persistent shortage of economic fibre, particularly in the Prince George region, has led to the closure or curtailment of a number of sawmills, which in turn has dramatically reduced the volume of chips available to meet the needs of our pulp operations," he said in a press release.

"Despite exhaustive efforts, including expanding well beyond our traditional operating region, there is simply not enough residual fibre to supply the current production capacity of all our operations.”

Canfor Pulp operates two pulp production lines at its Northwood mill in Prince George and one production line at its nearby Intercon facility. The company said it will continue to operate both lines at Northwood over the next few weeks, then wind down operations to a single production line at the beginning of the third quarter.

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