Canfor cancels plan to build new plant in northern British Columbia, closes another and scales back third

Ending months of speculation, Canfor announced it was abandoning plans to replace its shuttered sawmill in Houston.

At the same time, the British Columbia forestry giant also revealed it was permanently closing its Polar sawmill in Bear Lake, B.C., as well as a production line at its Northwood pulp mill in Prince George.

“As British Columbia’s political and regulatory landscape continues to evolve, it is difficult to predict the operating conditions we will face in the future,” said Don Kayne, President and CEO of Canfor, Thursday May 9.

“This is why we have made the difficult decision to suspend our plans to build a new state-of-the-art sawmill in Houston, as we are not convinced that an investment of this magnitude can be successful at this time. »

Concerns began growing in the community in early spring about exactly when Canfor would begin dismantling the plant it closed more than a year ago.

Canfor indicated last fall that it would build a new plant and do so on the property containing the old one.

“The ability to reliably access enough economical lumber to operate our manufacturing facilities is critical to our business,” Kayne said.

“Unfortunately, although our province has an adequate supply of wood available for harvest, as confirmed by the annual allowable cut set by British Columbia’s Chief Forester, the actual level of harvest has declined dramatically over the over the last few years. In 2023, the actual harvest was 42 percent lower than the permitted harvest, a level not seen since the 1960s.

“While this decline is partly the result of natural disturbances – beetle infestations and wildfires in particular – it is also the result of the cumulative impact of policy changes and increased regulatory complexity. »

The company says in separate news releases that the closures will affect 400 jobs, 180 at its Polar plant and 220 at the Northwood plant.

The company says the fiber shortage is also the reason behind the indefinite reduction of the production line at the Northwood pulp mill.

Canfor Pulp, a subsidiary, says it currently operates two pulp production lines from its Northwood mill, which will continue to operate over the coming weeks, followed by an “orderly shutdown process” of one line .

Canfor announced last September that it planned to spend $200 million on a state-of-the-art mill in Houston, shortly after announcing the closure of its Houston and Chetwynd sawmills.

The Polar sawmill, located about 70 kilometers north of Prince George, had an annual production capacity of about 300 million board feet, but it has been closed since January.

Kayne called today’s announcement heartbreaking for the company and the impact on its employees.

—with files from The Canadian Press

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