Why a lumber price boon won't lead to a jobs boom at some Alberta sawmills
Visiting Spray Lake Sawmills in Cochrane, Alta., you'd expect to see a chaotic scene with workers scrambling to churn out more and more two-by-fours and fence posts to take advantage of unprecedented lumber prices. But it's pretty much business as usual.
"It's steady as she goes," said Ed Kulcsar, the manager of the company's woodlands division, which oversees tree harvesting.
Lumber prices have been anything but steady. They've been riding a well documented ascent into unprecedented territory. Two-by-fours are usually around $400 for 1,000 board-feet at this time of year, but now the price is closer to $1,600.
"What we've seen are unprecedented prices in the lumber industry," said Brock Mulligan, who is with the Alberta Forest Products Association.
It's added hundreds and thousands of dollars to the cost of building projects — from fences and decks, to renovations and new home builds.
"We empathize with people on the consumer side, these levels of prices are completely unprecedented," said Mulligan.
"It's really just a perfect storm of supply and demand factors that are feeding it."
Since prices have gone up, lumber companies in Alberta must return a bigger share of their profits to the government through increased timber fees. And while it may be tempting in an industry where money almost literally grows on trees, many are reluctant to cut down more to cash in. But they can make adjustments to increase the amount of lumber they get from every log and ultimately increase their profits.
Harvest plans unchanged
Kulcsar says if they harvested more spruce and pine trees this year, they'd have to reduce their cut next year under the terms of their forest management agreement with the province. An agreement can't be adjusted to take advantage of market prices.
"If we were to overcut in one period, we'd have to cut back significantly to match that in the next period," he said.
And that could lead to job cuts if production is affected.
Kulcsar says the 78-year-old company prefers to keep its operations running steady and stable, without creating too many price-induced production swings for its 210 employees. It produces 120 million board-feet a year.
The COVID-19 pandemic did force a six-week shutdown last year.
The company — which started in Sundre, Alta., in 1943 and moved to Cochrane in 1969 — operates 22 hours a day, four days a week. Fridays, Saturdays and Sundays are set aside to maintain all of the cutting, planing, sorting and drying equipment.
"We can't just crank the tap on when the market gets good," said Mulligan.
"The biggest factor in our industry is sustainability, making sure that we're harvesting in an appropriate level and managing the forest."