CANADA: Damage that the worst forest-fire season in B.C. has done to the province’s forest industry is showing up in trade statistics that show overall exports down 14 per cent to the end of August, according to B.C. Stats.
Understandably, the fires that raged across B.C.’s Interior and consumed 12,158 square kilometres of forests, pushed timber companies out of the woods, diverting their employees to fight forest fires instead of harvesting logs for processing.
“This is almost unprecedented,” said Peter Hall, vice-president and chief economist for Export Development Canada. “When something like that happens, clearly, you’re not going to be able to ship as much, “you’re not going to be able to work those woodlots.”
However, he views the damage as a temporary hit on B.C.’s trade and that, barring a damaging resolution to the Canada-U.S. softwood trade dispute, the province’s exports will rebound in line with a recovering U.S. housing-construction market.
B.C. Stats crunches Statistics Canada figures, and showed that B.C. exported 17 million cubic metres of lumber to the end of August, down considerably from almost 20 million cubic metres over the same period in 2016, with the biggest declines accumulating over the fire-ravage months of May through August.
Exports to the U.S. took the biggest hit with the 10.6 million cubic metres of exports south of the border to the end of August representing a 20-per-cent decline from the same period a year ago. Shipments to China, B.C.’s second-biggest export market, were also down six per cent to 3.7 million cubic metres of lumber.
“In my conversations with forest companies, they’re saying, ‘We have skilled workers, but we can’t deploy them at this time (because) we can’t get a guaranteed income for them,’ ” said Hall, who was in Vancouver on Monday for presentations and meetings on Export Development Canada’s forecast for 2018.
Hall said the short-term dent in B.C. lumber exports will be one impact on the horizon for the province’s trade, which he also expects to take hits from lower levels of natural-gas exports, after somewhat of a boom in 2017, and stagnant trade figures for coal.
B.C. agricultural producers will see gains from increasing trade opportunities in Asia, as will manufacturers that will benefit from increasing investments in machinery and equipment south of the border.
On balance, however, Export Development Canada sees zero growth in exports from B.C. in 2018 after experiencing a robust eight-per-cent increase in export trade by the end of this year.
Susan Yurkovich, CEO of the Council of Forest Industries, said there were other factors affecting lumber exports besides the fires, such as punitive duties by the U.S. Commerce Department in the softwood-lumber dispute and a slowdown in American construction due to hurricanes and floods in the southern states.
“This is obviously a lot of stuff happening all at once, so the fact that (B.C.) lumber production is down a bit should be expected,” Yurkovich said.
However, Yurkovich said lumber prices are strong, which will push lumber companies to ramp up the production that they can, and the industry expects the trend of increasing U.S. housing starts to spark rising lumber sales to the benefit of B.C. sawmills.