As the new minister of Forests, Ravi Parmar may have one of the toughest cabinet posts in David Eby’s NDP government.
He will be under pressure to do something about the regulatory burden in B.C. that has been killing B.C. forest sector jobs at a time when B.C.’s forest sector faces crippling tariffs and duties from the U.S.
Softwood lumber exports to the U.S. already face 14.5 per cent duties, and could double next year. That’s irrespective of whether or not President-Elect Donald Trump makes good on his threat to impose 25 per cent tariffs on all imports from Canada and Mexico.
“This is going to be devastating to the forest sector,” Parmar told BIV News in an interview today, where discussed his priorities as the new minister of Forests.
“The first top priority that I’ve made, front and centre, each and every day is softwood lumber,” said Parmar, who served as a ministerial adviser to the minister of Forests from 2019 to 2020.
Earlier this year, in its fifth annual review (AR), the U.S. Department of Commerce set final anti-subsidy and anti-dumping duties on Canadian softwood lumber imports at 14.5 per cent. They could get even worse in 2025.
“We expect that the sixth AR is looking at a 15 per cent increase on top of that,” Parmar said. “These are significant increases.”
American duties on softwood lumber is just one of a litany of challenges that forestry companies have faced over the last few years in B.C.
Since 2017, the NDP government has added new regulations and policies that have made it increasingly difficult for B.C. sawmills and pulp mills to continue to operating.
More than a dozen sawmill and pulp mills have permanently shuttered in B.C. in the past four years, and this year alone, two forestry companies – Teal Jones and, more recently, San Group – have filed for creditor protection.
With every sawmill closure in recent years, owners have cited the same problem: Lack of access to economic fibre.
A big part of the problem is a shrinking annual allowable cut (AAC). But forest industry leaders point out that, after all the mill closures that have occurred in recent years, there is an adequate amount of AAC to keep the existing mills running, except that it has been made inaccessible due to cost and red tape.
In the 1990s, B.C. was harvesting 95 per cent of the province’s annual allowable cut (AAC), Rob Schuetz, president of Industrial Forest Services, said at a Global Wood Summit in November.
Since the B.C. NDP came to power in 2017, the percentage of the AAC that is actually cut has fallen below 50 per cent, Schuetz said.
Mina Lauden, vice president of corporate affairs for Canfor Corp. (TSX:CFP), said at recent resources and energy forum sponsored by the Greater Vancouver Board of Trade (GVBOT) that B.C. has enough timber to supply sawmills and pulp mills, but that its often inaccessible due to cost and “regulatory complexity.”
“Foundationally, for British Columbia, it’s about access to economically available fibre,” Lauden said. “We have the harvest available in the province. It’s about accessing it economically and reliably.”
“Regulations are only one part of the fibre story that we have here in British Columbia,” Parmar said.
He blames the big forestry companies for essentially cutting and running – i.e. harvesting the most valuable timber first, when prices were high, and not making the investments needed to access some of the less economic timber.
A number of companies that have shut down sawmills in B.C. have bought or built new sawmills in the U.S. and Europe, due to a greater availability of merchantable timber.
“During the pine beetle kill, when lumber prices were high, in 2021 and 2022, Canfor and many other companies harvested much of their easily accessible timber, leaving a lot of their vast fibre supply without proper access, expecting to deal with it later,” Parmar said.
“Those same companies that made those decisions did not decide to utilize the millions and sometimes billions of profits that they gained to access to what we refer to as uneconomic fibre. Instead, they left it for later, and now it’s later, and unfortunately, forestry workers…are paying the price for those kinds of business decisions.”
But industry analysts have said NDP forestry policies and regulations are to blame for the mill closures and flight of capital, saying they have made B.C. “uninvestable.”
Some of those new policies and regulations include old growth harvesting moratoria, new forest landscape plans, ecosystem-based land management, increasing parks and protected areas, shared land-use decision-making with First Nations, and federal and provincial caribou habitat protection plans.
Since his appointment as Forests minister three weeks ago, Parmar said he has met with the Council of Forest Industries (COFI), the United Steelworkers union, which represents forestry workers, and other stakeholders.
“All of those stakeholders and partners that make up the forest sector have asked a lot of me and expect a lot from me, and I expect to deliver for them,” he said. “But I’m also going to be asking much of them.
“When I have conversations with Canfor, and West Fraser and Tolko and many of these other partners, I will be looking to them to say that ‘you’ve made some money here in British Columbia, especially in 2021 and 2022. Where are those profits? Are those profits going down south, are they going to Europe? Why are they not being made here in British Columbia?’”
While he gave no indication his government would reconsider forestry policies and regulations that the industry blames for making B.C. one of the highest cost jurisdictions in North America to operate, he did promise to shorten permitting times.
“In my conversations with the staff in the ministry of Forests, I’ve already authorized them to expedite permit approvals,” he said.
He noted that his ministry has already accelerated permitting for wildfire wood salvaging, noting that in the Cariboo region, all wildfire salvage permits applied for were approved within less than 25 days.
Parmar said he hoped that, through the government’s new forest landscape planning tables, there may be ways to “speed things up.”
As for tariffs and duties, Parmar said his top priority will be pressing Ottawa to address the issue.
“With duties going up next year – outside of the 25 per cent tariffs from the incoming president – just the increase in duties that we’re expected to see, I think those are going to devastating,” he said. “I’m going to be looking to Ottawa to provide the necessary support for us to be able to bridge these unfortunate times.”
