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Sawmill closings force shift

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Rachelle Dumoulin admits her second layoff in 12 years from a northern B.C. sawmill has soured her on the boom-and-bust industry.

The 39-year-old lost her job in the remote community of Mackenzie, about 180 kilometres north of Prince George, B.C., when three local sawmills were closed in 2007-08 due to a slowdown in the U.S. housing market.

She used the down time to go back to university in Ontario, but returned to Mackenzie with her husband in 2010 when the mills reopened and got a job as a labourer. They bought a house and had two children, now seven and two years old, and she started a part-time photography business.

In July, owner Canfor Corp. announced the mill where she worked as a weigh-scale operator would close again. Because it’s an “indefinite curtailment,” Dumoulin said, there was no severance paid.

Meanwhile, her husband, a contract log truck driver, lost his job delivering to the nearby Conifex Timber Inc. sawmill during a five-week curtailment blamed on high log costs and difficult market conditions.

The good news is the Conifex shutdown ended, she said.

“There’s that saying, ‘You do me wrong once, shame on you; do me wrong twice, shame on me,'” Dumoulin said in an interview.

“I’m not letting that happen a third time. I need to get out of this industry.”

This year’s series of mill closures and production curtailments in British Columbia have affected more than 5,900 workers at 25 mills in 22 communities, according to provincial estimates.

Observers say the frustrating part is that little can be done to fix the problem.

Destruction caused by wildfires and a severe mountain pine beetle infestation — both linked to global warming — have created acute shortages of wood fibre in B.C. that will take decades to replace.

Meanwhile, a slowdown in U.S. housing markets means prices are depressed but the province says stumpage fees for Crown timber — adjusted quarterly — can’t be reduced arbitrarily for fear of weakening Canada’s legal fight against softwood lumber duties imposed by the U.S.

Marty Gibbons, president of the United Steelworkers union local in Kamloops, B.C., estimates more than 400 of his members have lost jobs thanks to the closures of sawmills in Clearwater and Clinton, B.C.

But the longtime forestry worker says there’s no comparison with previous industry slowdowns in 2008 and 2015.

“This isn’t a slowdown, this is a capacity reduction,” he said. “These are not temporary layoffs, this is a correction in the industry … we just don’t have enough timber to supply the mills.”

Analysts expect the industry will see a lot more bad news before there’s much good news.

Researchers at FEA Canada estimate there will be 53 to 55 sawmills left in the B.C. interior by 2028, down from about 95 mills in 2007, in a report based mainly on provincial timber supply estimates.

“It takes 80 years to grow a tree. So, looking out 50-60 years, it looks pretty good,” said Russ Taylor, managing director of FEA Canada.

“But in the interim it’s going to stay relatively flat, for the next two or three, maybe four decades.”

The lack of wood fibre is expected to spill over into closures in the oriented strandboard panel sector, where two mills were closed this year, and will eventually hit the pulp and paper industry as well, said Kevin Mason, managing director of ERA Forest Products Research.

Closures through the end of the year are expected to cumulatively remove about two billion board feet per year of capacity, from recent annual output of between 10 billion and 11 billion board feet, he said.

“These are difficult transitions and not a day goes by that I am not thinking about the workers and communities who are being affected by these closures and curtailments,” said B.C. Forests Minister Doug Donaldson in an emailed statement.

He said he is working to ensure support systems are in place for forestry workers, including job fairs, skills training and career counselling, support for families and economic diversification strategies.

He offered a similar message in Mackenzie in mid-August, speaking at a rally organized by a new organization founded by three local women called Mackenzie Matters.

Kim Guthrie, a 57-year-old notary public who chairs the group, said she fears for the future of the community she and her husband moved to about 30 years ago.

“We don’t want to leave. We want to stay here,” she said.

“This is our home and where our friends are. We know everybody. It’s a really tight, close-knit community.”

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CPPIB posts 2.3-per-cent return in second quarter

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CEO Mark Machin walks through the CPPIB office in Toronto in this file photo.

By Mark Blinch

Canada Pension Plan Investment Board posted a 2.3-per-cent return in the quarter ended Sept. 30, helping it maintain double-digit long-term returns and add nearly $10-billion to its total assets.

CPPIB, the investment manager for the Canada Pension Plan, said its five-year and 10-year returns through Sept. 30 averaged 10.3 and 10.2 per cent over the period, and it closed the quarter with assets of $409.5-billion.

CPPIB posts 2.3-per-cent return in second quarter

CPPIB didn’t break out returns by asset class, but said the group that actively manages its equity investments, as well as its private-equities division, were “strong contributors.” The Active Equities department picks specific stocks with an aim to outperforming the market, while private equity is the ownership of private companies, often aided by substantial borrowing.

It received “modest gains” from its passive portfolio, a style of investing designed to match the overall market. CPPIB also said it had positive performance in other asset classes, including its bonds, aided by declining interest rates.

A little less than one-third of the fund’s assets are in stocks traded on the public markets. A quarter of the portfolio is private equity.

All return percentages are net of costs, CPPIB said. Because the CPP must serve plan members for decades to come, CPPIB says long-term results “are a more appropriate measure of CPPIB’s investment performance compared to quarterly or annual cycles.”

Canada Pension Plan, founded in 1966, is the primary retirement-security program for working Canadians. The government created CPPIB in 1999 to professionally manage the Plan’s money. The past two decades have seen a shift first from bonds to stocks, then to assets like real estate, infrastructure and private equity. The government projects the CPP Fund will grow to $545-billion in assets by 2025 and $1.5-trillion in assets by 2040.

Major deals in the quarter included buying publicly traded Pattern Energy Group Inc. for US$2.3-billion in cash, valuing the company at US$6.1-billion, including debt. It also struck a deal to merge data-information provider Refinitiv into the London Stock Exchange, valuing Refinitiv at US$27-billion.

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Trade mission seeks to calm concerns about forestry downturn

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Forests Minister Doug Donaldson says he’s in Asia trying to calm investor concerns about reduced supplies of British Columbia timber for major residential developments and tourism-resort projects in China and Japan.

Donaldson, in a teleconference from Tokyo, says he and 35 senior executives from B.C. forest companies and associations are on a five-day trade mission to Asia that concludes Friday.

He says the Chinese and Japanese are keenly aware of the toll pine beetle infestations and massive wildfires have taken on B.C.’s forests, but business leaders and forests ministry officials are reassuring potential customers the province has abundant supplies of timber.

The Opposition Liberals recently released a document detailing ongoing forest industry struggles, listing almost 60 examples where companies have implemented cost-cutting measures that range from harvest reductions to permanent mill closures.

The detention of top Huawei executive Meng Wanzhou in Canada prompted the minister to postpone his planned participation on a forestry trade mission to China last December.

Donaldson says this week’s trade talks in Japan and China focused only on business.

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Union representing SkyTrain workers considers possible strike action

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SkyTrain in Vancouver/Shutterstock

CUPE Local 7000, the union representing 900 SkyTrain workers, says negotiations with the BC Rapid Transit Company (SkyTrain) have reached a deadlock.

CUPE Local 7000 says that there have been more than 40 sessions at the bargaining table since the beginning of May, and that talks broke down Tuesday, Nov. 12. It says that both sides were unable to reach an agreement on several key issues.

“The Company has failed to offer fair wages or address the sick plan, inadequate staffing levels, forced overtime, and other issues important to our members,” said CUPE 7000 President Tony Rebelo.

“We have been more than proactive and flexible in trying to reach solutions to improve the service, but the employer’s latest package failed to address the key issues. They are simply not interested in bargaining seriously, so we’re left with little choice but to go to our members and seek direction for next steps.”

CUPE 7000 represents approximately 900 SkyTrain workers who provide service as SkyTrain attendants and control operators as well as administration, maintenance, and technical staff.

Vancouver Is Awesome reached out to TransLink for comment and will update the story when they have provided comment.

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