In response to a prolonged timber shortage and operational challenges, Canfor Corporation announced the definitive closure of its Polar sawmill in Bear Lake, BC, and the suspension of its reinvestment plans in Houston, BC, effective immediately. This decision reflects deepening issues within the forestry sector, exacerbated by regulatory changes and natural disruptions.
The now-closed Polar sawmill, which had an annual production capacity of 300 million board feet but had been inactive since January 2024, will affect approximately 180 employees. Additionally, a line at the Northwood Pulp Mill in Prince George, under Canfor's subsidiary Canfor Pulp, has been indefinitely shut down, reducing its annual output by 300,000 tonnes of market kraft pulp due to a shortage of economic fibre. This reduction will decrease the facility's total capacity to 480,000 tonnes of market pulp per year and impact approximately 220 jobs.
Don Kayne, President and CEO of Canfor, expressed the difficulties faced by the industry, noting that actual timber harvesting in 2023 fell to 42% below the permissible limit, marking the lowest level since the 1960s. "The combined effect of beetle infestations, wildfires, and a series of policy and regulatory changes has severely restricted our access to economically viable timber, crucial for our operations," Kayne stated. He added that these factors have led to widespread curtailments and closures within the sector, forcing the company to reconsider its planned investment in a new state-of-the-art sawmill in Houston.
Addressing the impact of these decisions, Kayne remarked, "It is with a heavy heart that we make these decisions, which have significant implications not only for our employees but also for our First Nations partners, contractors, and the broader community that depends on a thriving forest industry."
Canfor is currently working with union partners to develop a transition plan that includes severance and support for the affected workers. The company is also exploring opportunities to sell its associated tenure to help sustain other local manufacturers facing similar challenges.
In 2023, North America's net sawmill capacity decreased by 2%, triggered by diminishing lumber demand and past overproduction issues. This trend has led to the permanent closure of nine sawmills and reductions in shifts, particularly in British Columbia (BC) and the US South, where economic pressures have also forced mills to shut down to balance timber supplies.
