Will Fairy Creek trees be exported as raw logs?

Eight questions about raw log exports and B.C.’s struggling forestry sector, explained by policy analyst Ben Parfitt.

This story was originally published on June 17 by our partners at The Discourse. For more analysis on Fairy Creek, sign up for The Discourse’s pop-up newsletter.

Last month, a reader wrote in and asked me about our ongoing coverage of the fight to save the old-growth forests around Fairy Creek. Were the trees being cut in that area by timber company Teal Cedar (a subsidiary of Teal-Jones) going to be processed in B.C. or would they be exported to international markets offshore, he asked.

I found it interesting, especially because of the wider questions it raised around the current battle over old-growth trees: Why is it deemed necessary to log what’s left? How do we address the issue of jobs for loggers? What’s the controversy around raw log exports about? And finally, is there a way to preserve what old-growth is left?

In my digging around to find answers, I saw that in April, Teal-Jones (who are based in Surrey) addressed raw log exports during their court injunction hearing and stated that they will “harvest with the care and attention to the environment British Columbians expect, and mill every log we cut right here in B.C.” 

Also in April, a detailed feature story by Terry Glavin published in Maclean’s described the Teal-Jones Group as “one of the loudest industry voices behind a broad-based move spearheaded by environmentalists to push back on the pace and scale of raw log exports from B.C.’s coastal forests.”

Then I found an analysis written by former Vancouver Sun journalist Ben Parfitt for the Canadian Centre for Policy Alternatives (CCPA) that delved much deeper into the issue of raw log exports and describes a conflict that erupted last year between Mosaic (a forestry company that was formed as a partnership between Island Timberlands and TimberWest) and other forestry companies like Teal-Jones, who spoke out against Mosaic’s push to get the federal government to relax raw log export rules.

I wanted to know more, so I called up Parfitt and we sat down for an interview. Here are eight interesting answers I heard, edited and condensed for clarity. 

1. What was the fight over raw log export regulations last year all about?

It was what I call a ploy—a gambit—by the largest log exporters on the coast to try and get out from underneath what regulations there are that present a roadblock. Not a roadblock that is very hard to get over, but a roadblock nonetheless. They were trying to eliminate that. 

What they were trying to do is eliminate the requirement that companies have to first advertise logs to be available for purchase by domestic buyers before they could export. 

If a company’s advertising logs for sale on the export market, they clearly want to sell them on the export market. They claim that they get a premium for selling on the export market. So when somebody domestically comes along and tries to bid on that wood, it is construed by some as ‘blocking’ the passage of that wood out. There is prevailing opinion in the industry that that can result in a penalty of the client down the road, where they will not get access to logs. And I’ve heard repeatedly from people, in woodworking unions in particular, that the companies they work for believe that that happens.

But as I pointed out, this was a very deceptive thing that TimberWest and Island Timberlands [which formed Mosaic] did. They had locked out their employees for months, well before COVID came along. Then COVID comes along and under the guise of COVID, they’re essentially trying to say that they need economic relief.

Having said that, there was opposition at the time to Mosaic’s proposal. You know, the one great thing that I think came out of that work was the publicity around that particular issue. I think it helped to push the federal government away from [removing] the regulation.

At this time, the regulation requiring prior advertising notice is still in place.

2. Why are there divisions about raw log exports within the forestry sector?

I think where there is a sharp divide is that with Island Timberlands and TimberWest, between the two companies, they do not own a processing facility in British Columbia. Both of those companies, their predominant holdings are the lands that used to be part of the E&N railway grant

So the reason that the federal government is involved in this issue is because the logs that are exported from British Columbia that originate on those lands are subject to federal export regulations, not provincial. The vast majority of what TimberWest and Island Timberlands log is on lands that they own and that date back to the railway grant. Which is why the federal government comes in, because it was the feds that issued that grant initially to a railway company to build a rail line, but then it morphed into something else. So there is opposition within the industry, within certain quarters of the industry, towards Island Timberlands and TimberWest exporting all of this wood. And there are people for that reason that will speak up. Not a lot, but there are people that will.

So it has historically been the case that Island Timberlands and TimberWest are the largest log exporters and significantly, a considerable portion of what they export is second and third growth, it’s not old growth. It’s not to say they don’t export old growth, but not as much as some other companies do, like Western.

3. How many jobs are lost due to raw logs exports?

You may want to have a look at a piece that I wrote that the CCPA published, but also appeared in the Tyee in February of 2017. This particular piece quantified for the first time how many logs had been exported on average over the previous years, and then made an estimate based on current knowledge of how much forest was being logged each year, and how many jobs were being generated. So I came up with a jobs-per-cubic-meter calculation. 

And then I took the volume of wood that was being exported in raw log form, and made the supposition that if that wood was not exported, and if that wood was processed in British Columbia, and if the average employment rate was generated with the volume of wood that was exported, that would have been another 3,600 jobs in B.C. 

That’s based just on the volumes being exported, and a straight calculation based on volume logged, and employment. So labor statistics and logging statistics, come up with a job generation ratio and apply it to all the logs exported. 

4. Does Teal-Jones export raw logs?

The volume of wood that I show Teal-Jones or the Teal Cedar group as logging is almost 800,000 cubic meters in the most recent fiscal year, ending March 31, 2021.

In 2020, there is not a single entry where Teal-Jones is advertising [raw logs] for sale. 

But the issue is a little bit more complicated than that, because what this data would not take into account is that Teal-Jones might trade or sell logs that it [cuts] to others, and those people might export. So, you know, you would need to know what Teal’s arrangements were, but I can tell you on the basis of the most complete years worth of  data showing advertised log sales Teal’s name isn’t mentioned once.

5. Can the B.C. premier put a stop to raw log exports?

You’ve got to understand that Horgan and company, the provincial government, does have jurisdiction and can, if it chooses, ban exports. Not on those private lands, but bear in mind that there’s a significant volume of timber that is being logged that is not on those E&N lands, and therefore is totally subject to provincial regulation.

6. Does all of this have any bearing on the current wood craze?

If you look at the phenomenal increase that has occurred in the price of lumber, there are two things happening. There’s been a surge in demand. A lot of people that have money are putting their money into their houses and have been since COVID started. So that’s been a driver.  And the housing markets, as you’ve heard across the country, they’re extremely hot and they’re hot in the United States as well, which is where most of our wood goes. 

And British Columbia, which historically has provided the lion’s share of that lumber into the U.S. market can’t do what it used to do before, because it literally is running out of wood. So there’s just less trees available because of a whole host of factors. It begins first and foremost with decades of logging and in some cases unsustainable logging based on the amount of trees that are there. Then you compound the problems with it, particularly in the interior, where you have had massive insect infestations, which has precipitated further increases in logging to ‘salvage the dead wood before it loses its value.’ And then you add on top of that the horrendous wildfires that have burned in recent years. And the net result is there’s just less timber to go around. 

That explains why, partly why, you’re seeing many mills close. The other reason you’re seeing mills close is that on the coast in particular, as you move more and more away from logging, the valley bottoms, where all of the big, really old trees used to be, and you start to move up the mountains, the diameter of the logs goes down. And that means that mills that were once built to handle big logs essentially have to close because there’s no big logs left to mill. And if you’re going to be in the milling business on the coast now we’ve got to be building mills that are going to be handling not only smaller logs, but second- growth logs. Which is why there hasn’t been a lot of investment. There’s been a lot of closures, not a lot of investment. 

So Teal-Jones was really the last company in the province to have made a major investment in a milling facility on the coast. Now that is no longer the case. There’s another company called the San Group that is in the process of building a milling complex in Port Alberni, and they will be processing exclusively second- growth logs.

7. How can we make better use of what little we have left?  

B.C. has a pretty lamentable track record in terms of processing. The most prevalent species that we have on the coast is hemlock and people in the industry say that is a huge problem. If you’re going to process hemlock, you have to make investments in drying technology, so kilns. You need to dry the wood to get the value out of it. And of course, there’s an added cost to doing that. 

So what you’ll see with the log export data is that there are droves of hemlock leaving the province. We have very, very little hemlock processing. So part of what I was arguing for in the piece that looked at the number of jobs that are gone is that there are ways that we could be doing more processing. And we ought to be doing that.

I believe—and certainly the unions and environmental organizations that have supported me in the work that I’ve done on exports have also come to the same conclusion—which is: We’re running out of old growth, we should be protecting more of it, we should be processing more second growth, and making the investments that are needed to ensure that that that happens. And we ought to be processing more hemlock in particular. 

8. What’s a more efficient way to process raw logs?

The fact that so many mills have closed on the coast and in the interior of the province has put huge pressure on the pulp and paper industry. 

Historically, companies logged trees, they moved the trees and the sawmills processed round logs into rectangular products. And virtually half of every log that was processed ended up as wood chips and then those wood chips went to the pulp industry.

The reason I’m saying all this is that if you get into a situation where you have more and more sawmills closing in the province, it does two things. One, it increases the prospect that raw, unprocessed logs are going to leave the province by export. And the other thing that it does, which is horrific in my opinion, is it forces the pulp industry, if it is going to survive, to have to go into the market and purchase whole logs and turn them directly into chips so that they have what they need as a product. Which is a horrible way to go in terms of taking value from our forests.

The way that we should be working is you start with the tree in the forest, you move the tree that you log into a solid wood mill, a sawmill, then you move the residual product which is chips, to the pulp mill.

And what happened as a result of these mills closing is that the Harmac mill, which is a huge mill, just outside of Nanaimo, they have purchased as much as 600,000 cubic meters of hemlock logs a year, and chipped them to get the supply that they need for their pulp mill. From an employment perspective that is just horrible. All of those logs should have been processed in sawmills in B.C. and then the residuals used in the province. 

There’s a tremendous amount that could be done in terms of dramatically reducing the amount of old-growth that is being logged. If there were investments, commensurate investments made in second-growth processing, we could have both more old growth protected, and we could have more jobs in the forest industry. But that’s going to require government to get serious about sending a signal to the industry that the opportunities to export are going to be swiftly done away with. 

It’s going to require somebody bringing the hammer down and saying, ‘We’re not going to allow this to happen anymore.’ 


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