Dozens of forest workers employed by the Teal-Jones forest company in Honeymoon Bay, west of Lake Cowichan, are out of work.
The Surrey-based company announced it is curtailing all of its harvesting operations on the B.C. coast, including at Honeymoon Bay and in the Fraser Valley, earlier this week due to weak timber markets and the high cost of fibre.
Teal-Jones’ total harvesting and logging workforce on the coast, which includes a contractor workforce and its own employees at Honeymoon Bay, its Duke Point log-sorting operation in Nanaimo and contractors at its Fraser Valley forest licence, add up to approximately 300.
“Weak North American and global lumber demand has resulted in persistently weak lumber prices in 2019,” said Gerrie Kotze, vice president and CFO at Teal-Jones.
“Teal-Jones’ economics have been further negatively impacted by high stumpage rates and higher harvesting costs on the B.C. coast. Current stumpage rates remain high relative to lumber prices, and harvesting costs have been adversely impacted by new regulations to bring out more residual wood waste.”
Kotze said these negative factors have combined to make it impossible for the company to continue to work its forest licences economically.
Approximately 40 of Teal-Jones’ workers and contract workers in Honeymoon Bay were laid off in June when the company announced it was shutting down its second-growth logging operations in the area, which also impacted operations in the company’s mills in Surrey and other locations.
At the time, the company said stumpage fees were well in excess of what would be an economic rate for a second-growth harvesting operation focused on providing logs for domestic saw mills.
The latest shut down announcement is expected to impact about another 40 workers in the Honeymoon Bay area.
Teal-Jones’ announcement was made just a day after West Fraser Timber said it intends to curtail operations at all five of its B.C. operations, effective Sept. 16.