For an already-reeling B.C. forest industry, the rail lockout that began on Thursday could be the straw that breaks the camel’s back.
So said John Brink, president and CEO of the Brink Group of Companies, who blamed the federal government for allowing Canadian National and Canadian Pacific Kansas City to lock out 9,300 employees in a labour dispute that will most likely affect all Canadians.
“It’s devastating, there’s no question about that, it will cost billions and billions of dollars,” said Brink. “For every day they are shut down the rail system it probably will take a week or two weeks to get back to normal. If it is for a week, it will probably take two months before the flow of commodities that we rely on from the rail system gets back to normal.”
Brink was interviewed before the federal government imposed binding arbitration to force the railway giants to get the trains running again. He offered a clear look at the challenges his industry is facing.
The lockout came two days after softwood duties B.C. forest product exporting companies have to pay to sell their products in the U.S. jumped from 8.05 per cent to 14.54 per cent. Brink said Canfor is now paying 16.5 per cent in duties, while Tolko is at 17 per cent.
“The industry has already paid close to $10 billion in duties since 2017 and now we double it in an industry that is already half the size it used to be,” said Brink. “I’ll bet you 50,000 people have lost their jobs in that industry, and this is all on top of that.
“I don’t know what they’re doing in Ottawa but this should never happen.”
Brink says overseas shipments of goods destined for Canada have already been diverted away from B.C. ports in Vancouver and Prince Rupert and will have to go through the United States. That will put more pressure on the trucking industry, which he says lacks the capacity to pick up the slack and that could lead to shortages of some goods and higher prices.
“Everything will be delayed and that means the normal flow of parts we rely on, everything will directly or indirectly be affected by it,” said Brink.
“I have deep respect for the unions and the ability to strike under certain circumstances but you cannot paralyze the whole country. I know they didn’t strike, this was a lockout that was put in place by CN and CP and that should not be allowed. The damage will be felt by every single individual in this country.”
Brink said Canada’s long-established reputation as a smart place for international companies to do business is also taking a hit and that will only worsen if the dispute is not settled quickly. Since 2000, when there were 120 primary sector mills operating in B.C., 60 have been permanently closed and the ripple effect has dropped the count of secondary manufacturing mills from 800 to less than 200, and Brink says a lot of those are in danger of closure.
“We have become unreliable from an investor’s perspective and an entrepreneurial perspective, it’s pretty sad,” Brink said. “Looking at northern British Columbia, we’ve already lost the confidence of the forest industry and all the big companies are more or less leaving and investors are looking in other places. Entrepreneurs that are stimulating ideas and concepts are having second thoughts about why should we invest here.
“Bad forest policy, softwood lumber duties.. where is our government?” he said.
“Especially in the situation where you have rail services that are a monopoly, there has to be leadership from government, saying we can’t have that so let’s address the issues that are being raised and demand they be fixed. If there are issues in regard to safely that is very serious and I can’t blame (rail workers) for complaining about that.”
Brink’s mills in Prince George, Vanderhoof and Houston convert imperfect short lengths of kiln-dried wood to make high-quality fingerjoint lumber. Moving the products of those three mills requires between 10 and 15 rail cars per week. For some of its products, Brink is reliant on CN to transport 90 per cent of what it manufactures.
Due to industry constraints that have shuttered mills and reduced the availability of economic fibre, for the past year Brink has been operating at 60 per cent of its 400-worker capacity. It now employs about 250 workers and he’s hoping for an early end to the lockout to avoid any layoffs.
“We’ll take it a week at a time,” said Brink. “If it continues for two weeks I would say most forest companies are going to shut down.”
