According to David Elstone of Spar Tree Group, by the end of this year, after Paper Excellence closed its paper mill in Crofton indefinitely, British Columbia, Canada will lose 58% of its paper production capacity and 13% of its pulp mill capacity.

“British Columbia has only 16 pulp or paper mills in total, of which 25% have been or will be cut. It is undeniable that the industry is in crisis.” He wrote.

Joe Nemeth, project manager of the British Columbia Pulp and Paper Alliance, warned that there was such a serious shortage of fiber supply that two or three pulp mills might be closed before Christmas if it was not addressed immediately.

“In addition to the closed plants, you will see that two or three other pulp mills will be closed in the next 90 to 120 days,” Nemeth said.

Nemeth said that pulp mills usually need 45 days of chip and log buffering.

“The production time of a large group of factories is reduced to five days or less,” he said.

Pulp and paper mills are the main employers and economic backbone of many communities in British Columbia. They usually employ 400 or more people. The salaries of pulp mill workers are very high. Many people earn six figures. Therefore, when the pulp mill is closed, it can be devastating to the community.

Crofton Paper Mill will be closed indefinitely before the end of this year, which will be the third Paper Excellence pulp or paper mill closed in two years.

In December 2021, Paper Excellence announced that its paper mill on the Powell River would be temporarily reduced indefinitely. In 2020, its pulp mill in Mackenzie will shrink indefinitely and then be permanently closed in 2021.

West Fraser Timber Co. Ltd. recently announced that its Cariboo pulp and paper mill in Quesnel will be shut down for 16 days.

Elstone warned that Canfor’s Taloy pulp mill could have a “fragile future”. The plant owned by Canfor Pulp Products has been shrinking since early this year, mainly due to railway transportation problems. Canfor now says it may not restart the plant until next spring.

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Pulp mill is the main contributor of forest economy. In 2021, the output value of pulp and paper will be 3.9 billion Canadian dollars, making it the fourth largest export product of British Columbia. According to the data of the British Columbia Pulp and Paper Alliance, pulp and paper accounted for 20% of the GDP of British Columbia’s forestry sector and 34% of the total export value of forest products.

Although the decline in the paper market is partly responsible for the closure of British Columbia paper mills, this is not the case for pulp mills and the pulp market. Nemeth said that the current pulp price is about 25% higher than the long-term average price. “Today, if you can produce pulp, you are making money,” he said.

However, British Columbia pulp mill operators are addressing supply chain issues related to rail capacity and fiber supply shortages.

Nemeth said that the shortage of fiber supply was about 4 million cubic meters, mainly due to the closure and reduction of sawmills.

Sawmills have symbiotic relationships with pulp and paper mills. They need each other, and the decline in British Columbia’s timber supply has led to the permanent closure of many sawmills over the past decade. The closure of these sawmills has now had the expected ripple effect on pulp and paper mills. When the pulp mill closes, it will also have an impact on the remaining sawmills.

“On average, it takes three to four sawmills to provide enough chips for a pulp mill. Therefore, if two or three pulp mills close down, they will affect 10 sawmills. If 10 sawmills close down, they will also affect two or three pulp mills.”

In the past two decades, the intrusion of pine and spruce beetles and forest fires have destroyed a large number of timber, reducing the annual allowable harvest (AAC).

In the long run, AAC is expected to decrease from 61.6 million cubic meters to 51 million cubic meters by 2030. The new and old growth protection strategies of the New Democratic Party government will also remove a large part of AAC.

Last year, Jim Girvan and Rob Schuetz, two forestry analysts, predicted that if all the forest policies being considered by the British Columbia government were implemented – including the old growth delay and the new Reindeer Habitat Protection Act – as many as 10 sawmills and three pulp and paper mills would probably close down.

Girvan said that since the report, so far, no large sawmill has been closed, but the shift work has been canceled in the large sawmill, which is tantamount to closing the sawmill. Girvan said that the Fraser Lake factory, Williams Lake and Quesnel plywood factory had cancelled shift work. These cuts occurred when timber prices were still quite high. Now that timber prices have fallen, more cuts may come.

When the sawmill is closed or the output is reduced, the pulp mill will lose an important input – sawmill waste, which helps explain why there are so many production reductions in the pulp and paper mills in British Columbia.