04/29/2012 04:00 EDT | Updated 06/28/2012 05:12 EDT

B.C. forestry industry takes a hacking, but pain won't last forever: experts

VANCOUVER - A pair of deadly blasts that ripped apart two Britsh Columbia lumber mills have brought more pain to an industry already struggling with economic trouble that has been percolating for years.

The explosions, the first in Burns Lake in January and the second in Prince George last week, raised immediate questions about whether the mills in those towns would rebuild — and the uncertain answers to those questions are wrapped up in the many problems already hanging over the entire industry.

The province has been coping with a decade-old pine beetle infestation, and even that infected wood has been dwindling.

The costs of trucking trees from far afield have spiked, the American housing market has yet to recover, and the U.S. wood lobby continues to launch trade complaints against its Canadian counterparts.

But despite all the hard chops, the industry and observers insist the pain will be short-lived — relatively speaking. They acknowledge there will be real pain that could last 20 to 50 years, but they say the people whose livelihoods depend on the slow growth of trees see that as short-term.

"This downsizing of the industry is grim, there's no way around it. It impacts on workers and communities," said Assistant Prof. Harry Nelson, who specializes in forest economics and policy at the University of British Columbia's forestry faculty.

"But those fundamentals (are there). There's still a healthy timber supply and a healthy forestry industry. It's just a smaller one."

The latest blow to the industry was the explosion that hit Lakeland mill in Prince George last Monday, killing two workers and injuring others. It came three months after an explosion at the Babine Forest Products mill in Burns Lake in January killed two workers there.

The causes haven't been determined, but there has been speculation extra dry particles of beetle-kill wood are to blame, setting off gun-powder-type blasts. The province's work safety agency quickly ordered the roughly 300 mills in B.C. to clean up and clamp down on dust control, which could include expensive cleaning or equipment upgrades.

Neither of the companies that own the mills have said whether they will rebuild, with the Oregan-based owner of Babine Forest Products raising concerns about the timber supply available near Burns Lake.

The Prince George blast came just days after the industry received yet another piece of bad economic news.

A confidential government report that was leaked to the media projected economic and social havoc in the B.C. Interior, covering in a region that stretches from Smithers to Prince George to 100 Mile House.

The report predicts up to 12,000 jobs could disappear within five years, based on a drop in timber supplies of between 32 and 67 per cent if there's no mitigation.

The annual allowable cut was raised around 2002 to clear out beetle-killed wood that would otherwise rot in the wilderness, but the province's chief forester is expected to bring it back down again in the next five years.

"All of a sudden firms start looking at this: 'Well, does it make sense to keep all our mills? Do we close our mills?' Or, in the case of Burns Lake when mills burn down, 'Does it make sense to rebuild here?'" said Nelson.

"We're now faced with a decision we may not have had to make or think about for a few years but now all of a sudden it's upon us."

At least 22 mills have been shuttered in the B.C. Interior since 2005, according to a report released Thursday by the International Wood Markets Group. It said much of the impact has been masked by poor North American markets and low prices, but predicts few will likely ever reopen.

As of 2010, the industry was generating a cumulative total of 164,000 direct and indirect jobs, according to the Council of Forest Industries.

John Allan,the council's president, said he's looking for an economic recovery plan from the government to help communities in the coming years, and it should be developed with plenty of industry and public input.

"This is a circumstance where we need some leadership and some process," he said.

Allan suggested the province follow something similar to the land-use planning process conducted in the 1990s, in which the government consulted with stakeholders as it determined how to divvy up resource-rich land fairly.

"There'll still be a forest industry. We are efficient, we're good at what we do, we're cost competitive, there's lots of wood out there. But there's not going to be as much wood in the future as there is today."

Bill Bourgeois, a North Vancouver-based forestry consultant who is also the co-ordinator for the Healthy Forests, Healthy Communities Initiative, agreed community involvement must be paramount.

Bourgeois complained that before the confidential report was leaked earlier this month, it appeared the government was making decisions behind closed doors without public input.

That planning also included a suggestion to allow cutting in the forest reserves, which Bourgeois believes would be a mistake.

"If you took it all, it would only keep a mill going ... anywhere from a month to a year and a half. And then they shut down," Bourgeois said.

"For people who need a job, that's not trivial. But at the same time, it's not going to solve the problem."

Nevertheless, the industry is looking for a silver-lining in its recent problems, suggesting they could lead to innovation.

"Perhaps the impending timber supply crisis will generate opportunities to make some important transitions in B.C.'s forest sector," said a letter from the Canadian Institute of Forestry sent last Thursday to Forestry Minister Steve Thomson, Premier Christy Clark and N.D.P Opposition leader Adrian Dix.

"Creative solutions may include greater consideration of the broadleaf resource and further options for the bioenergy industry."