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By Caden Fanshaw

FORESTRY

Rustad calls Canfor curtailment avoidable, blames high production cost

Aug 25, 2021 | 5:06 PM

PRINCE GEORGE – Just a few months ago Canfor earned a record quarterly reported operating income of $1.04 billion driven by unprecedented high lumber prices and strong operating performance across all regions.

Lumber prices have recently come back down to levels still considered high, although far from the record high boom in the first half of 2021.

That fall has now affected operations at several BC sawmills.

On Wednesday, Canfor announced that production at all of their BC sawmills would be cut back to 80% in response to what the company called challenging market conditions.

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Forestry critic John Rustad says this whole scenario was avoidable, citing government forestry policy that makes doing business in BC expensive compared to other places in North America.

“The thing to think about is this, right now lumber prices are over $500 per one thousand board feet, that is by any standards we’ve had historically record prices,” says Rustad. “It’s down from over $1700 that lumber has gotten to, but the challenge that we have in British Columbia is the cost-structure has become so high companies are losing money at this price.”

According to Rustad, the break-even point for forestry companies is so inflated, BC has become one of, if not the most expensive place in North America to produce forestry products.

Until the government changes policy, Rustad says fluctuations like this one are bound to happen, something he calls an unfortunate circumstance for those who depend on the industry for an income.