Consolidation in British Columbia’s coastal forestry sector has put the squeeze on independent logging contractors, resulting in less investment in aging equipment and problems attracting workers, according to a study released November 12 by the Truck Loggers Association (TLA).
The study was written by Harry Nelson, a forestry professor at the University of British Columbia, and commissioned by the TLA, which represents independent logging contractors on B.C.’s coast.
http://www.tla.ca/sites/default/files/news_policy/tired_iron_by_harry_nelson_lowres_fnl.pdf
Nelson found that changes the BC Liberals made to forestry legislation in 2003 have had the effect of consolidating the industry, meaning there were fewer companies for logging contractors to bargain with.
“Larger firms purchased smaller firms and [harvesting] tenures,” says the report. “The end result was a much more consolidated industry: in 2013, the top two firms held 47% of the coastal annual allowable cut.”
The policy changes, which were meant to spur reinvestment in the forestry sector, have failed to do so, says the report. Instead, logging contractors have been unable to afford to buy new equipment or offer competitive wages.
Combined with the global recession – which hit the forestry industry particularly hard – the result has been less work for loggers overall.
In a survey of nine contractors within the study, most of the respondents said their clients (the large forestry companies) held the balance of power when it came to setting rates for logging work.
In June, the heads of two logging associations told Business in Vancouver that this imbalance has resulted in independent contractors being paid the same rate now that they were being paid during the recession, when everyone was tightening their belts.
The ability of the forestry industry to benefit from the current market upswing could be threatened by these capacity problems in the harvesting sector, says the report, which can be found here.
