Northwood closure has far-reaching impacts

The immediate concern remains the hundreds of workers and their families facing uncertainty. However, economists and local leaders warn that the effects of the closure will extend well beyond the gates of the pulp mill.

According to University of Northern British Columbia economist Charles Scott, major industrial closures typically produce multiple waves of economic impacts that spread throughout a community over time.

The first wave is obvious: the workers employed directly at the mill lose jobs and income. The second wave, Scott explained, affects the businesses that supply goods and services to forestry operations.

“The manufacturing sector, the fabricating sector, all of those jobs related to the economic activity that aren’t part of day-to-day operations, but are a big part of having a forest sector,” Scott said. “Those find shrinking customers and they’ll lay off, too.”

Equipment suppliers, contractors, mechanics, trucking companies and other service providers connected to forestry operations could all feel the effects as spending declines.

Scott said communities dependent on major industrial employers often experience a third wave of impacts that can be more difficult to measure but can be significant nonetheless.

“If consumers are confident, they spend more, they shop more, they take more holidays,” he said.

“But if they’re feeling stressed, financially stressed, then they’re not doing those things as much. And so there’s a whole range of ripple effects in the tertiary sector, like, for example, at the mall and the grocery stores that will show up as well.”

That decline in consumer confidence can affect retailers, restaurants, tourism operators and service industries that rely on discretionary spending. Even residents who are not directly connected to the forestry sector may eventually feel the impact through slower economic activity across the community.

For Prince George, the closure represents another setback in a forestry industry that has faced significant challenges in recent years, including fibre shortages, market pressures and previous mill closures.

Yet Giddens says the current situation also highlights the need to focus on the future of the region’s remaining forestry operations.

While Northwood’s closure has captured headlines, he noted several major employers continue to operate in the region, including Lakeland Mills, Dunkley Lumber and Carrier Lumber.

“We need to look at what all of the needs are for the existing operations, what impact this is going to have on them so that we can actually plan for their viability,” Giddens said.

The concern among industry observers is that each facility plays a role in a broader forest-products ecosystem. The loss of one operation can create challenges for suppliers, transportation networks and fibre allocation systems that support the industry as a whole.

Prince George has experienced similar economic shocks before. In 2023, workers and businesses were forced to adapt following the closure of PG Pulp. However, Scott believes conditions today are somewhat different.

Although losing a job is never easy, he says the broader economic landscape may provide more opportunities for displaced workers than existed during previous downturns.

“It is never a good time to lose your job, but the current situation with the nation-building projects, the heavy provincial focus on the North, the federal focus on resource projects that directly, positively affect us presents far more opportunities than is usually the case when these kinds of events occur,” Scott said.

Large infrastructure projects, resource development initiatives and investment in northern communities have increased demand for skilled trades and industrial workers in many sectors. That demand could help some affected employees transition into new roles more quickly than might have been possible in the past.

Still, Scott cautions against underestimating the broader consequences of Northwood’s closure.

Industrial facilities such as pulp mills contribute more than direct employment. They support local tax bases, community organizations, contractors, suppliers and countless secondary businesses. When a major employer leaves, the effects often spread gradually and can continue unfolding for years.

Municipal leaders, provincial officials and industry representatives are expected to examine options for supporting affected workers and protecting the health of the region’s remaining forest sector operations.

For many families, however, the focus remains much more immediate.

Workers are grappling with questions about severance, retraining opportunities and future employment prospects. Businesses are evaluating potential impacts on revenue and staffing levels. Community organizations are preparing to support families who may face financial challenges in the months ahead.

The coming weeks will likely determine how effectively governments, industry and community groups can respond to the closure and mitigate its longer-term effects.

While Prince George has demonstrated resilience through previous economic challenges, experts agree the loss of Northwood Pulp will be felt well beyond those directly employed by the mill.

The first wave of impacts may have already begun, but economists warn the full consequences will only become clear as secondary and tertiary effects work their way through the local economy.

As the community adjusts to another significant blow to its forestry sector, both government and industry leaders say the priority is ensuring affected workers receive support while preserving the viability of the operations that remain.

** Pattison Media is owned by Jim Pattison Industries, a majority shareholder in Canfor.

by Cheryl Jahn

Northwood closure has far-reaching impacts

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