Canfor Announces Sawmill Closure and Investment Suspension in British Columbia

Source: Canfor

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Canfor Corporation announced the permanent closure of its Polar sawmill in Bear Lake, British Columbia, and the suspension of its planned reinvestment in Houston, BC.

The company attributed these decisions to a persistent shortage of economically available timber and challenging operating conditions in northern British Columbia.

The Polar sawmill, with a production capacity of 300 million board feet annually, has been idled since January 2024. The permanent closure will directly affect approximately 180 employees.

"The ability to access enough affordable timber is crucial for our business," said Don Kayne, President and CEO of Canfor Corporation. "While British Columbia has a sufficient supply of timber, the actual harvest levels have significantly declined in recent years, reaching lows not seen since the 1960s."

Canfor pointed to several factors contributing to the decline, including natural disturbances like wildfires and beetle infestations, along with policy changes and increased regulatory complexity. These factors, according to Canfor, have hampered their ability to consistently acquire enough timber to support their operations, forcing closures and curtailments like the one at the Polar sawmill.

Given the uncertain business climate caused by ongoing policy and regulatory shifts, Canfor also announced the suspension of its plan to build a new, state-of-the-art sawmill in Houston, BC. The company expressed a lack of confidence that such a significant investment would be successful in the current environment.

"These decisions are incredibly difficult, especially considering our 85-year history in British Columbia," said Kayne. "More importantly, they have a profound impact on our employees, communities, and partners who rely on a healthy forest industry."

Canfor pledged to work with unions to develop a transition plan for impacted employees, including severance packages and other support measures. They also aim to find ways to divest their associated tenure to support other local manufacturers facing similar timber access challenges, hoping to prevent further closures or curtailments.