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James Steidle: ‘Sawmill turncoats’ handing industry over to the U.S.

'A truly competitive economy would likely not produce billionaires'
pacbio closure 4
The Pacific BioEnergy plant on Willow Cale Road in Prince George was shut down and its operations moved to Dothan, Alabama.

When the BC Liberals ushered in the era of consolidation and megacorporatization of our forest industry, I bet they didn’t think their creation would turn on them.
But that’s exactly what’s happening.

Analysts say that 2025 could be the year the American South produces more softwood lumber than all of Canada.
We can thank some prominent British Columbians for that.

Brian Fehr, a local recipient of the Order of BC, has made a fortune automating Canadian sawmills before cannibalizing them and shipping them south of the border.
This includes moving the Canfor Mackenzie sawmill to Plain Dealing, Louisiana, to assist Teal-Jones, shipping the old Pacific Bioenergy plant in Prince George (co-owned by Canfor) to Dothan, Alabama, and dismantling Canfor’s OSB mill in Fort Nelson, where it will find a new home in Enterprise, Alabama.
Now, I’m hearing speculation he will dismantle the Polar sawmill in Bear Lake and ship it to Alabama.

Jim Pattison, another Order of BC recipient, has also participated in this. He owns a majority stake in 18 American sawmills through Canfor and holds a significant stake in West Fraser, which now operates 22 American sawmills, producing more wood than in Canada.
Other Canadian firms, like Tolko, Interfor, and Teal Jones, now operate mills in the American South as well.

Thanks in no small part to likely billions of dollars in Canadian investment, Americans now need less and less of our lumber. We went from providing 35% of American lumber demand in the 1990s to just 25% now, a number that continues to decline—along with our bargaining power—every time a Canadian sawmill gets shipped south.

We can debate all day about how “investment” has every right to leave, especially if we don’t give it everything it demands, like massive profits for billionaires.

But this argument ignores one fundamental fact: Had we maintained the small mill model tied to local timber supply areas and kept competition alive, the industry likely wouldn’t have been able to accumulate the capital needed to invest in competing industries down south in the first place.

A relatively “inefficient” industry with many small competing firms would have maximized the payout to local communities, workers, and suppliers. Instead, the bottom got hollowed out, and everything flew out the top, into the ether of the global financial vacuum.

If you go back to Adam Smith’s original theory on free-market capitalism, the whole point of competition is that the money stays at the bottom, not at the top.

Even according to Google’s AI, “a truly competitive economy would likely not produce billionaires.” Other than a bit extra to maintain the means of production, competitive markets don’t require obscene long-term profits like those seen in Canada’s forest industry.

Smith may as well be describing our province when he said that the rate of profit was “always highest in the countries which are going fastest to ruin.”

The explanation for the siphoning of capital and billion-dollar profits out of our public forests and into the southern U.S. is because we intentionally got rid of competition and defiled the principles of free-market capitalism that supposedly guided the policy in the first place.

Our past governments, in all their glorious wisdom, decided that an “efficient” industry of consolidated monopoly and monopsony players, with immense market power, would create a globally competitive Canadian forest industry.

During the second reading of the Forest Revitalization Amendment Act on May 6, 2003, which eliminated appurtenancy, Nanaimo BC Liberal MLA Mike Hunter articulated this argument: “It seems to me that the best social contract we can ask for and the best job protection we can find is through a profitable industry—an industry that makes profits that we’ll plow back into our communities.”

What a delusion that’s turned out to be.

In the past 20 years, we’ve watched in dismay as the big firms chipped away at the workforce and suppliers, automating production and ramping up massive efficiencies of scale.
Huge amounts of capital accumulated at the top, while entire towns and communities crumbled.

We created a monster that turned its back on us the moment it could make a higher profit elsewhere, building a parallel industry in the heart of our increasingly belligerent neighbour.
Now, they’ve helped create a provincial, if not national, crisis.

There is only one thing left for us to do: We take those Order of BC awards back, block the sale of Polar to the United States, and strip the two-timing corporations of their BC timber tenures.

James Steidle is a Prince George writer.