Comp bureau investigates

Houston mayor concerned with aspects of timber swap arrangement.

The Canadian Competition Bureau is reviewing the proposed swap of timber licenses between West Fraser and Canfor announced at the same time as the closure of mills in Quesnel and Houston were announced.

At the time of the announced closures both companies said they were reducing their mill capacity in response to a lack of good fibre post-pine beetle. The swap of timber licenses was part of their plan to prevent further mill closures.

The timber swap was announced without, it seems, consultation with either the province or local communities. The Ministry of Forests, Lands and Natural Resource Operations (MFLNRO) still hasn’t formally approved the arrangement, and it is unclear how the results of the competition bureau review might affect the province’s eventual decision.

The swap would see most of West Fraser’s timber license in the Morice timber supply area (TSA) go to Canfor in support of Canfor’s Houston mill, but West Fraser would retain a portion of that timber supply, as well as gain new timber in the Lakes TSA.

The portion gained in the Lakes TSA would support West Fraser’s Fraser Lake Sawmill, which operates within the Lakes TSA. But West Fraser’s other outfit in Smithers, the Pacific Inland Resources sawmill, will receive approximately 280,000 cubic metres of timber supply annually.

“We are opposed to that 280,000 cubic metres of wood moving out of the Morice TSA, and we’re going to fight that,” said Houston Mayor Bill Holmberg during a recent Regional District of Bulkely Nechako (RDBN) board meeting. “West Fraser doesn’t want to hear that… but that’s the route we’re going to go down and we’ll see what kind of success we have.”

“I respect… them [West Fraser] wanting to protect their supermill in Quesnel, and Canfor wanting to bring some certainty to Houston,” Holmberg said. “My concern is that extra volume West Fraser wants to ship to Smithers. It should stay for the town of Houston.”

Holmberg would like to see other options for the timber volume explored.

“Put it into a forest reserve until some proposals come forward, whether it’s putting it back into B.C. Timber Sales, or putting it into the community forest, or if another company comes that wants to build a small mill, then we’ve got some quota they can have.”

The competition bureau maintains strict confidentiality with its investigations. Beyond confirming that an investigation is underway, the bureau is unable to provide more information.

According to MFLNRO spokesperson Vivan Thomas, the ministry expects to be able to make a final decision regarding the timber swap early in 2014.

“Under the forest act, the minister can cancel one or both of the tenures involved, if there are competition concerns,” Thomas said. “It is likely that the findings of the federal competition bureau may factor into the minister’s decision.”