Why a B.C. mill imported U.S. wood, then announced it was folding

The shuttering of a pulp mill on Vancouver Island will leave 350 people out of work but the premier says it’s “all hands on deck” to keep the doors open.

When Domtar Corporation announced it would be shuttering a Vancouver Island pulp mill and laying off 350 workers, it came as little surprise to those who knew the company was losing millions of dollars despite cost-cutting measures by management and staff.

What’s not widely known is that the company had been buying and transporting American wood chips to the Cowichan Valley facility to keep it running after struggling to find enough material in Canada.

“It’s cheaper and it’s more readily available and dependable, in terms of its supply,” said Domtar’s senior director of public affairs, Chris Stoicheff.

“That should give an indication to British Columbians of where we’re at.”

The stop-gap measure still wasn’t enough to keep the plant viable.

For years, the forestry sector—among other industries—has been urging the provincial government to reform permitting and approvals processes and generally reduce red tape in order to make them more economically viable and speed up various projects.

Stoicheff says the opposite has been true, with logging companies going from weeks-long waits for harvesting permits to year-long waits. That’s impacting the company’s ability to obtain reliable, local sources of wood fibre to turn into paper, packaging, and tissue. He described tariffs as a minor issue, and said cost and availability are the driving factors in their decision to close the Crofton Mill.

“This is not something that we take lightly, this is a decision that’s come over time,” he said. “It’s been losing money for a considerable amount of time, and we’ve tried everything and the workers have done a great job, but the market realities of it on the supply side make it far too difficult.”

That doesn’t seem to be dissuading the premier, who told journalists that it’s “all hands on deck to try to figure out if there’s some way to keep this facility operating.”

David Eby characterized the issue as being largely tariff-driven, since exports to the U.S. have dried up and the sawdust by-product of cutting construction lumber is now unavailable, among other factors.

“The forests minister tells me we have seven million board feet of permitted trees on Vancouver Island that are available right now that can’t be used because between the low prices and the cost to cut down those trees, and particularly to transport them to the facility, is such that it’s uneconomic,” he said.

Several British Columbia mills have shut down in recent weeks in a clear sign the sector is in trouble, but opposition critics and industry insiders alike point out there’s been no meaningful reduction in red tape despite government commitments to workers and companies.

Eby sidestepped a question around financial support for laid-off workers, who will be employed at the Crofton mill for a few more months as it winds down operations, insisting his first response is to see if there’s a path to keep the facility operating.

Stoicheff believes that unless there’s a big change, that’s an unlikely scenario.

“The issue is fibre supply and so if we can’t do it, it’s a real challenge for anybody to come in,” he told CTV News. “If they’re able to solve that problem, then perhaps there’s optimism.”