The first presumptive case of COVID-19 appeared in Canada at the end of January in Ontario, but it was not until March that people began to ‘panic-buy’, causing severe shortages in stores across the country. Masks, toilet paper, and cleaning supplies became hard to acquire.

On March 11, the stock market started to dramatically fall. Five days later, the Canadian Government announced they were closing the boarder to slow the spread of the illness. The next two weeks saw provinces declaring a state of emergency, while businesses deemed ‘non-essential’ begin closing around the country.

Forestry as an Essential Service

On March 23, the Forest Products Association of Canada (FPAC) addressed an open letter to Prime Minister Justin Trudeau. As reported by Canadian Forest Industries, FPAC President and CEO Derek Nighbor requested that Canada add forest products to its list of essential critical infrastructure workers.

Dear Prime Minister Trudeau,

Let me begin by commending you and your government for your swift action in responding to the current COVID-19 crisis. Please know that you have the full support of Canada’s forest products sector to step up as part of this Team Canada effort to help keep Canadians safe and to work together on response and recovery.

During these challenging days, and for the days ahead, it is important that Canadian forest sector operations be recognized as essential and critical infrastructure. This will enable us to do our work safely and securely, with certainty, in order to produce and deliver products that Canadians want and need – from building materials to biomass for power generation; from food and pharmaceutical packaging to paper towels and toilet paper.

The health and safety of Canada’s forest sector workers is our top priority. Across our industry in recent weeks, we have seen a host of important risk mitigation measures implemented at Canadian mill sites, including but not limited to:

• Adoption of ‘work from home’ measures for those who are able to, and no group gatherings

• Implementation of systems to support employees facing potential cases of COVID-19 and/or individuals in self-quarantine within the workforce

• Modifying shift schedules to reduce employee contact between shifts and implementation of social distancing operations-wide

• Managing break, lunch, and dinner times to ensure a 2 metre distance between staff members

• Suspending international travel and significant restrictions on domestic travel

• Restrictions on visitors; thorough screening of on site contractors, and deliveries

• Ramped up sanitation and hygiene measures across facilities, common areas, and all surfaces

• Crisis management teams activated and Frequently Asked Questions documents produced to help support staff

 Yesterday, the U.S. Department of Homeland Security (DHS) added forest products to its list of essential critical infrastructure workers. In yesterday’s directive, DHS declared manufacturers of “tissue and paper towel products” as essential, as well as manufacturers of “food packaging” and “workers who support the manufacture and distribution of forest products including, but not limited to, timber, paper, and other
wood products”. FPAC is requesting that
a similar declaration be made here
in Canada.

While we recognize and fully support the need to curtail and suspend non- essential service and manufacturing sectors in order to effectively combat the spread of COVID-19, our member companies provide critical products that are needed by the Canadian public and we are urgently requesting that our sector be recognized as such. With your support, we commit to continuing this important work with the health, safety, and wellness of forest sector workers as the top priority.

On behalf of Canada’s forest products sector, a $73.6 billion a year industry operating in more than 600 forest-dependent communities from coast to coast, and directly employing 230,000 Canadians across the country, you can count on us to continue to be a strong partner in these extraordinary circumstances.

I would be pleased to discuss these issues with you further and answer any questions you may have.

Sincerely,

Derek Nighbor
President and CEO

On April 2, the federal government responded and moved to recognize Canada’s forest products sector and its workers to provide essential products and services to Canadians.

“FPAC fully supports today’s directive which designates forest products and Canada’s forest sector and its workers as essential to the well-being of Canadians,” Nighbor said, in a press release, “I want to thank forest sector workers in our head and regional offices, at our woodlands operations, mills, factories, storage facilities, and all points in between who have stepped up under challenging circumstances to keep our supply chain moving.

I also want to acknowledge the efforts of our value chain partners – from forestry contractors to truck drivers, railroaders, further manufacturers, wholesalers, and retailers. Without you, essential products that Canadians need from building materials, pellets and biofuels for heating systems, pulp for masks and hospital gowns, as well as toilet paper, paper towels, and sanitary wipes would simply not be available.”

The Changing Workplace

Essential sectors found themselves balancing safety and productivity more than ever before. Companies adapted by making capacity reductions, cutting production, and shutting down mills temporarily.

Like many companies, Canfor, which operates in BC and Alberta, outlined the decision to curtail Canadian production by 40% over three weeks. They also outlined the reduction of capital expenditures by $20 million Canadian dollars for Canadian and US operations. On April 9, they curtailed operations even more due to the decrease in demand of global products. The company reported an $88.8 million operating loss for its first quarter.

“Our top priority continues to be supporting our employees through this challenging time,” said Canfor Corporation President and CEO Don Kayne, “We
are encouraged by the financial relief programs the provincial and federal governments are implementing to
support all impacted workers.”

Other companies decided to either run single shift or operate on a limited basis. Carrier Lumber Co., which operates in BC and SK, decided to pursue these measures on a mill-by-mill basis. Their website stated: We are pleased with these positive changes taking place and hope this will be a sign of good things to come as we all continue to flatten the curve.

Another tactic for slowing the spread that companies took included closing their operations to the public. Alberta’s Millar Western Forest Products announced the cancellation of non-essential visits to the site and the commencement of an ‘infection risk assessment’ for contractors before allowing them on sites. Like many companies, they urged any who could to work remotely and added disinfection measures. Their social media posts share a key message: We’ll get through this together – stronger than ever.

More abrupt measures also seen across the indefinite closure of facilities across the country, like the shutdown of Kruger Specialty Papers’ Brompton, QU facility. The company stated the decision to be due to “unfavourable market conditions hampered by the COVID-19 outbreak.”

On April 17, Derek Nighbor of FPAC appeared before the House of Commons Standing Committee on Finance and spoke about how Canada’s forest sector and its workers were managing in the pandemic. He talked about how lumber markets have struggled, experiencing a near 40% price drop in early April, and many sawmills had made the tough decision to temporarily shut down. Those closures have not only put thousands out of work, but have impacted pulp mill workers and their communities. “We are a highly integrated sector,” he stated, “Our sawmills are our industry’s heartbeat. We need to find a way now to keep our sawmills operating so chips can continue to feed our pulp and paper mills. If we don’t have chips flowing, our industry’s biggest artery is cut off – and thousands more will be out of work.”

Financial Support

In the midst of the crisis, FPAC urged the government to make their wage subsidy program more accessible to the forest sector and its employees. In a press release, they recommended adjustments like government considering individual mills or segments, which would allow more operations to qualify for support, and keep more Canadian forestry workers working. They also suggested that government consider a sliding scale, so that if revenues are down by 10% or 15%, a company could qualify for wage supports at perhaps 50%, instead of 75%.

“On the lumber side, our markets took a massive hit in late 2018. We have been in recovery mode since and just as we were starting to turn the corner, COVID-19 hit,” said Nighbor, “We need liquidity supports now, measures that move with speed and ease in the face of markets that are falling for the short-term. Measures that are not going to force companies to provide more security as many of our companies just do not have the flexibility to do that right now. Measures that are responsive to the realities of this crisis – and have lenders who are prepared to be more risk tolerant than our main street banks.”