Sawmills located in the Saguenay-Lac-Saint-Jean region are being severely impacted by the rise in operational expenses and decline in lumber prices
The Cooperative Forestier de Petit Paris sawmill located in Saint-Ludger-de-Milot is temporarily halting its operations, highlighting the severity of the situation. As long as the sawmill continues to operate at a loss caused by the decrease in lumber prices, it will implement one-week monthly shutdowns. Nearly 120 employees are thus laid off.
Alain Paradis, the general manager of the Petit Paris Forestry Cooperative, stated that the North American market has been impacted by various factors such as the war in Ukraine, inflation, and the possibility of a recession in the United States. Consequently, there has been a significant decline in housing starts and all ongoing projects have been halted. Paradis had anticipated a slight decrease, however, the situation turned out to be worse than expected.
Rémabec, located in L’Ascension-de-Notre-Seigneur, has implemented a reduction in shifts, closing one out of three, which has impacted around forty workers.
The Union of Saguenay-Lac-Saint-Jean Wood Producers, which provides wood to multiple sawmills, has also experienced a decrease in the harvest due to market conditions.
According to the union’s president, Pierre-Maurice Gagnon, the harvest in the private forests of the region is expected to decrease by five to 10% in 2023, following a slight drop in 2022. Despite this, Gagnon expressed confidence that they will continue to operate despite the challenges faced by the industry.
The Quebec Forest Industry Council (CIFQ) is optimistic that better days are on the horizon, potentially by the end of the year. CIFQ anticipates that the housing construction market will improve once interest rates stabilize.
According to Michel Vincent, the Director of Economy and Markets at CIFQ, the housing shortage across North America will drive recovery in the industry as soon as interest rates decrease. Additionally, the recent announcements of massive factory closures in Western Canada will leave Quebec’s factories in an advantageous position to capitalize on the anticipated recovery later this year.
Resolute Forest Products is closely monitoring the situation and has suspended operations at the Saint-Thomas-Didyme sawmill until June 11 due to challenges accessing its cutting territory in Girardville. The affected workers have been reassigned to other duties.