- 2015 Federal Election
Industry weighs plan for Meadow Creek Cedar license
Plans to rehabilitate Meadow Creek Cedar’s suspended forest license are earning praise from local industry but also drawing criticism.
Blue Ridge Timber of South Slocan signed a management agreement last year with licensee Dale Kooner, intending to eventually acquire the tenure.
Blue Ridge has since been allowed to do some harvesting as it begins to address an extensive backlog of silviculture, road maintenance, and other liabilities. The company has opened an office in Kaslo and hired a handful of staff.
Once the suspension is lifted, it intends to process about a quarter of the wood itself — sister company Gold Island Forest Products runs a sawmill — and place the rest on the open market.
The Star canvassed a dozen forest companies and interest groups for their opinions, finding both ringing endorsements and withering dismissals.
‘A brighter future’
Geoff Bekker, Interfor’s Castlegar division woods manager, views Blue Ridge’s involvement as “definitely positive.”
“It’s good to see volume from the Meadow Creek Cedar license being made available to local sawmills,” he said. “Our sense is that Blue Ridge is making a concerted effort to have a viable business and with lumber markets starting to improve, this should help them be successful.”
Chuck Wright, fibre manager at Zellstoff Celgar in Castlegar agrees.
“I think it’s positive for the local forest industry,” he says. “In this area, too many licenses are not being used for one reason or another. I think the more licenses we get back on the market the better it will be for supply and cost.”
Wright says many mills are starving for wood and forced to look far afield, increasing transportation costs. Celgar sources pulp chips from the Okanagan, Washington, and Idaho, but Wright prefers to get as much as he can locally.
Ray Hascarl of Nakusp’s Galena Contracting, who worked for Meadow Creek Cedar and now works for Blue Ridge, has “nothing but good things” to say about the new company.
“It’s a way brighter future than when Meadow Creek was in control,” he says.
Kaslo Mayor Greg Lay says some people are concerned Dale Kooner might “outsmart” Blue Ridge once the license is brought back into compliance and can be sold. However, he supports the company’s efforts: “Bottom line, Blue Ridge has created local jobs and that is positive.”
Kaslo Community Forest manager Richard Marchand says Blue Ridge’s plans aren’t likely to have much effect on them, as they operate in different areas. But he thinks the Ministry of Forests was in a tough situation when it gave the company a shot at the license.
“I think the ministry was stuck. If they were to cancel the license they would have taken on a huge reforestation liability. By allowing somebody else in, they could have them do it.”
Valhalla Wilderness Society director Craig Pettitt believes government missed an opportunity to set aside some key mountain caribou habitat from within the license, suggesting the Lake Creek area in particular could have been removed. But he reserved judgment on Blue Ridge.
“Upfront they’re saying all the right things, that they’re going to have a light hand on the land,” he said. “The proof will be in the logging.”
George Brinkman, owner of Boards by George, a custom mill at Meadow Creek, says the company should be given a chance.
“Anyone could do a better job than the previous owner of Meadow Creek Cedar’s license,” he says. “It’s now up to Blue Ridge to prove they can. It’s just too bad it still is in Meadow Creek Cedar’s name. Our valley has been beat over the head so long by them we all should be wearing hard hats.”
‘Work cut out for them’
Others are less comfortable with Blue Ridge’s plans, even as they wish the company luck.
“I’m skeptical of the likelihood of success,” says Interior Lumber Manufacturers Association president Jim Hackett. “There’s a big elephant in the room about liability of the license and the ability of a firm like that to address it.”
Though the liabilities will be paid back over time, Hackett says it won’t be easy. Estimates of the outstanding silviculture bill vary widely, but are in the millions of dollars.
“The Crown is taking a gamble to see if [Blue Ridge] can pull it off,” Hackett says. “If they accomplish what they say they’re going to and put the license in better shape, I call it a win.”
Bill Kestell, a former woodlands manager with Meadow Creek Cedar, who now works for Salmo’s Porcupine Wood Products, is also hesitant to endorse the plan.
“Knowing the economics of market logging today and knowing their areas and the challenges they will incur, I’m not sure how it all makes sense,” he says.
Kestell says the investment required to deal with the liabilities, on top of the usual cost of logging and hauling, raises doubts in his mind. “That’s my concern: Is it going to work? Can Mr. [Trevor] Kanigan do it? If he can, all the credit to him.”
Matt Maddess with Wynndel Box and Lumber is similarly worried about the extent of the liabilities, though he says Kanigan “seems like a trustworthy, well-respected guy.”
“They’ve got a lot of issues to work through and it’s going to be a challenge. I don’t want to sound negative and I hope Blue Ridge is successful, but they’ve got their work cut out for them.”
Jeff Mattes of Kaslo’s Sunshine Logging has lately been at odds with Blue Ridge over a common-use road, which he says was an ongoing issue under the license’s previous management.
“It seems [Blue Ridge] wants access to wood under Meadow Creek Cedar’s license but wants to pick and choose any outstanding issues regarding costs associated with the license,” he says.
Mattes believes the cost of road repair should be linked to harvesting: “I would think that any new company looking for public support to manage this licence and work at cleaning up the mess would readily agree to these kinds of costs directly tied to the removal of fibre from the licence area.”
Blue Ridge principal Trevor Kanigan responds that he has the difficult task of dealing with Meadow Creek Cedar’s mismanagement — but not its debts.
“Some contractors in the area feel they can bill Blue Ridge for money outstanding to them from Dale Kooner,” he said. “Their claim is with Kooner and Meadow Creek Cedar and not with Blue Ridge.”
He adds that while they want to work with people to share what the license can provide local communities, “We are not willing to deal with people that get in line with their hand out figuring they are owed something.”
To those who wonder whether he has the wherewithal to rehabilitate the license, he says his company’s challenges are well known and they aren’t blind to the risks. Nor are their suppliers and contractors.
“People with professional and business reputations to preserve have chosen to put themselves in the line of criticism and skepticism because they believe in what everyone involved is trying to accomplish,” Kanigan says.
“These are the people we will continue to work with and hopefully at some point the critics and skeptics will come to realize what we are doing is a community effort.
“We are simply attempting to rebuild part of an industry in an area that has a resource and a desire to create employment. Can we fail? Yes. Do we want to fail? No.”
‘Jackals at the carcass’
A group in the Lardeau Valley trying to revitalize the local economy by finding markets for hemlock and compressed fuel products takes umbrage at what it sees as unfair criticism of Blue Ridge from other companies who were unable or unwilling to take the same risk.
“Where were they when everyone knew the mill and quota were up for sale?” the board of the North Kootenay Lake Forestry Initiative asked in a statement. “Now that a small operator has extended himself to enable something to happen, they gather like jackals to try to tear at the carcass.”
The group is hopeful some sort of facility will be re-established to process Blue Ridge’s surplus timber in an area “desperate for economic rejuvenation.”
“We have a lot of appreciation for Blue Ridge Timber and the district manager for embarking on a program that shines a light at the end of a long tunnel,” they said.
District forest manager Garth Wiggill was unavailable for an interview, but in a statement said it’s too early to measure Blue Ridge’s success in managing the license. A six-month variance to the license suspension that allows operation on 48,000 cubic meters — about 50 per cent of the total volume — expires May 15.
“At the end, the district will evaluate Blue Ridge’s actions, and determine whether further opportunities to operate on the license will be expanded,” Wiggill said.
However, he’s “encouraged” by the fact the company has hired people to address outstanding issues, entered into a repayment schedule with the government, and is preparing a new forest stewardship plan.
The ministry is also “cautiously optimistic” that Blue Ridge has the means to carry out its plan. “District staff will continue to closely monitor their operations, and make further decisions this spring on the probationary approach in getting this license back into full operations,” Wiggill said.
The ministry wouldn’t say if it has received any specific complaints about Blue Ridge. A 60-day public comment period on the company’s stewardship plan closed last week. Kanigan says several people reviewed the documents, but he isn’t aware of any negative reaction.