Mill closures devastate Canada’s forest industry

Seven of the eight sawmills are located in the province of Quebec, one in Ontario. The closures will put a total of 1,650 people out of work.

These are just the latest in a wave of mill closures that has been sweeping across the Canadian forest industry in recent years.

Other recent closures include:

* On October 4, Tembec announced the indefinite shutdown of its mills in Bearn, La Sarre, and Taschereau, Quebec, affecting at least 435 employees.

* October 2, Weyerhauser announced the shutdown, beginning in the new year, of two Saskatchewan mills located in the communities of Carrot River and Hudson Bay, putting roughly 300 people out of work.

* October 1, Kruger Inc. shut down its mill in Longlac, Ontario, putting 350 people out of work and Domtar announced it was laying off 116 employees from its mill in Espanola, Ontario.

* A month earlier Norampac announced the indefinite shutdown of its mill in Red Rock, Ontario, putting nearly 300 people out of work.

This list could go on and on. According to the Globe and Mail, as of the middle of August there had been over 6,000 permanent or indefinite layoffs in the Canadian forest industry in 2006. That number has now certainly risen to over 8,000.

And the total number of layoffs in the industry over the last five years is well over 40,000.

This crisis affects many more people than those directly employed by the forest industry. It is estimated that more than two indirect jobs are dependent upon each job in the forest industry.

Moreover, it is likely this trend will continue for some time to come, as industry analysts are predicting a significant number of further mill closures. Citing poor market conditions for forest industry products, Mark Bishop of RBC Capital Markets says that in order to restore industry profitability, “We need to see widespread mill closures pretty quickly.” Another industry analyst, Paul Quinn of Salman Partners, believes that with lumber prices now well below producers’ costs, an estimated 7 billion board feet of production needs to be taken out of the North American market in order to restore profitability. “That’s like saying you need one quarter of Canfor to go away,” said Quinn in a reference to Canada’s largest lumber company. “Things are going to get really ugly over the next 12 months.”

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http://wsws.org/articles/2006/oct2006/fore-o31.shtml