Heavy equipment at work in Sundre Forest Products harvesting area west of Rocky Mountain House.

Forestry industry a ‘star performer’

As Alberta’s oil economy tanks another important sector is quietly thriving — forestry.

ROCKY MOUNTAIN HOUSE — As Alberta’s oil economy tanks another important sector is quietly thriving — forestry.

In the forests between Hwy 11 and the North Saskatchewan River Sundre Forest Products contractors are busy.

“Our economy right now is doing very well,” said Tom Daniels, forestry superintendent for the company, which runs a sawmill and treated wood facility in Sundre and a laminated veneer lumber plant southwest of Rocky Mountain House.

Given rock-bottom oil prices and the resulting havoc in the province’s oil economy “forestry is certainly trying to help maintain that economy at whatever level we can,” says Daniels, during a recent tour of a company’s harvesting area west of Rocky Mountain House.

A couple of significant market forces are at work creating fertile economic ground for foresters, who are behind a $4-billion annual industry in Alberta. Forestry employs 15,000 directly and another 30,000 indirectly.

Since most of Canada’s wood goes to the U.S., it is purchased in U.S. dollars which, because of our weak dollar, goes a lot farther in Canada, where wages and production costs are paid.

As well, low oil prices mean lower fuel costs, which means significant savings in an industry that relies on gas-guzzling heavy machinery that is often running 24 hours a day.

ATB Financial’s first-quarter economic outlook for Alberta makes for grim reading with a half-per cent contraction in gross domestic product predicted for this year.

However, forestry is singled out as one of Alberta’s “star performers.”

U.S. lumber prices slipped a little late last year because of increasing supply but remain close to the 10-year average. The dollar disparity has made a huge difference, but the oilpatch’s problems have also freed up labour supply for forestry.

“As a result, forest product manufacturing is expected to be one of the leading industries in the province this year and next,” says the bank.

While times are good now, the forest industry knows what Alberta’s oil and gas companies are going through.

Forestry was battered by economic forces outside its control in 2007.

“We went through a terrible time,” says Daniels.

While the rest of the country experienced the worst in 2008, the Alberta forestry industry immediately felt the impact of the collapse of new home building in the U.S. a year earlier.

Typically, two million homes are built in the U.S. each year. That dropped below 200,000 in 2007.

“When you think about how big the forestry industry is across Canada and that industry is basically supplying lumber for the U.S. economy.”

When the bottom fell out, a lot of mills shut down and companies went out of business.

Sundre Forest Products, a subsidiary of Quesnel, B.C.-based West Fraser, was in for a rough ride.

“It was survival. We weren’t sure we were going to be able to outlast this downturn.”

However, the industry that emerged from the other side of the downturn was stronger than the one that went in.

“We came out of it in good shape,” he says. “We really got to focus on the core business. What is it that we have to do to make money and what can we strip out of that that we didn’t have to do?

“That really changed the way we look at our cost structure for sure.”

Nation-wide, the forestry industry has developed more flexibility.

“We’re fairly diversified from an economic base. We’re not reliant on just the Canadian economy. We’ve got the ability to move lumber around the world.

“So we’ll find those places where economies are doing well and are able to buy our product.

“There are not a lot of places in the world that are able to produce the product like we have here in Canada. We have a good quality lumber we are able to make here.”

Just Posted

Alberta hiring more paramedics and buying new ambulances, none for Red Deer

Red Deer Mayor Tara Veer is not concerned the provincial government didn’t… Continue reading

‘My nightmare began again’: Close call as bus carrying Humboldt crash survivor rear-ended

CALGARY — A terrifying ordeal for Humboldt Broncos survivor Ryan Straschnitzki this… Continue reading

Halifax airport operations normalize after Boeing 747 runway overshoot

HALIFAX — The Halifax Stanfield International Airport has resumed normal operations a… Continue reading

Bentley family left without a home grateful for community support

Central Albertans are coming together to support a Bentley family left homeless… Continue reading

Red Deer RCMP ready for new mandatory alcohol screening law

Red Deer RCMP are ready to enforce a new law intended to… Continue reading

WATCH: Red Deer and District Kennel Club Dog Show at Westerner Park

The Red Deer and District Kennel Club is holding a dog show… Continue reading

Brothers, 20, face second-degree murder charge in death of teen: police

MISSISSAUGA, Ont. — Police west of Toronto say two brothers have been… Continue reading

A young mayor, his friend, and a fatal attraction to opioids

MOUNT CARBON, Pa. — Janel Firestone found her son — the 24-year-old,… Continue reading

GM fights to retain key tax credit amid plant closing plans

WASHINGTON — General Motors is fighting to retain a valuable tax credit… Continue reading

TTC union asks provincial government to step in on transition to Presto

TORONTO — The union representing transit workers in Canada’s most populous city… Continue reading

Small pot growers find roadblocks on path to microcultivation licences

Yan Boissonneault’s daughter was turning blue. Without warning, his baby had stopped… Continue reading

No winning ticket for Friday night’s $60 million Lotto Max jackpot

TORONTO — There was no winning ticket for the $60 million jackpot… Continue reading

In Hollywood of Mississippi, voter fraud like a movie script

CANTON, Miss. — In a town that calls itself the Hollywood of… Continue reading

Trump picks Army chief of staff as next top military adviser

WASHINGTON — President Donald Trump announced Saturday that he’s picked a battle-hardened… Continue reading

Most Read