Tolko Industries’ Kelowna lumber mill is a shadow of its former self.
It used to be one of the city’s largest employers when the forestry sector was strong and the Kelowna mill had more than 500 employees working three shifts around the clock.
Today, there’s one shift of 140, and even those workers face an uncertain future as it was announced Tuesday the Kelowna property will shut down from Aug. 6 to Sept. 15.
Faced with six weeks of no work, Tolko employees have three choices.
One is to use up as much paid holiday time as they have.
Second, they can wait a week without pay before becoming eligible for employment insurance, which is only 55% of average insurable weekly earnings up to a maximum of $562 a week.
Third is a combination holiday and employment insurance.
After employees were told the news on Tuesday, their managers were available to assist with any questions they may have had.
This is the second blow to the mill this month.
On July 12, the second shift of 90 workers was axed permanently. That cut was announced May 10.
Also in May, Tolko announced it would be closing its mill in Quesnel.
In the midst of a two-week shutdown at the Tolko mills in Armstrong and Soda Creek, near Williams Lake, May 27 to June 7, it was announced the closure would drag on another two weeks, June 10-21.
“The high cost of logs and weak market conditions are still impacting our operating footprint in British Columbia,” said vice-president of solid wood Troy Connolly.
“Although we prefer to keep our locations in constant production, we must manage the business responsibly and ensure we are sustainable in the future.
“We know we have great people working at this location, and this is in no way a reflection on them or their commitment,” said Connolly.
“However, we’re seeing a lot of challenging industry conditions in B.C. right now, which could continue for some time.”
Tolko’s marketing and sales teams will remain on the job.
“(We) will continue to support our customers and do our best to minimize any impacts,” said sales and marketing vice-president Pino Pucci.
“Our customers are understanding of current market conditions and aware of our ongoing commitment to serve them.”
Tolko is not alone. Canfor, Conifex, Louisiana-Pacific, Norbord and Aspen Planers are among the other forestry companies closing mills, making shift reductions or laying off workers.
A perfect storm of adverse conditions has hit the forestry sector.
The housing market is soft, thus reducing the demand for lumber for construction.
It’s hard for forestry companies to get good logs at a good cost and process them effectively into lumber.
Trees killed by the mountain pine beetle and wildfires have reduced log availability, and the shortage has driven up the price of logs.
With soft demand, it’s just not worth it for forestry companies to pay high prices for logs to produce lumber that’s too expensive for the market.