The Teal Jones forest company has shut down its second-growth logging operations in Honeymoon Bay, impacting dozens of local contract loggers.
The Surrey-based company blamed the indefinite shut down on high stumpage rates, which are what the province charges companies to harvest timber on Crown land.
Teal Jones CFO Haniff Karmally said stumpage fees are currently well in excess of what would be an economic rate for a second-growth harvesting operation focused on providing logs for domestic saw mills.
“These high rates are incurring significant losses for the company, at a time of weak markets for lumber, shakes and shingles in Canada, the U.S. and abroad,” he said.
“The provincial government, as part of its Coastal Revitalization initiative, has recognized that while log exports will be addressed by changes to the fee-in-lieu rates, stumpage rates should be adjusted to be more in line with harvesting for domestic consumption. However, the changes to the stumpage system to reflect this reality will not come into place until 2020.”
The impact of the harvesting shut down will result in immediate reductions in logging employment among contractors in Honeymoon Bay, as well as lost mill time and employment at Teal Jones’s mills in Surrey.
Karmally said it’s unknown at this time precisely how many contract workers from the Honeymoon Bay area will be impacted by the shutdown, but there’s a total of approximately 80 workers harvesting both old and second-growth forests on the company’s licensed land in the area, and, as second-growth is about half of the local operations, it’s safe to assume the number of laid-off workers would be about 40.
“The impacts will be particularly severe on our employees, most with long term service, especially in light of the fact that the Surrey mills have already lost four weeks of mill time this year due to log shortages,” Karmally said.
“We’re anticipating the harvesting curtailment could last until early in 2020 when changes to the stumpage system are expected.”