Saskatchewan—the sleeping giant of the Canadian forest industry—has woken up big time, with over $1 billion in new capital investment sparked by a forest reallocation.
Saskatchewan has always been a sleeping giant in terms of its contribution to the Canadian forest industry, despite its massive and mature—though seriously under-utilized—forest resource. But it seems that the giant has now finally awakened.
In a flurry of press releases over the span of a week recently, the province announced a reallocation of its forest resource primarily located north of Saskatoon that will result in significant forest industry investment.
It includes a huge sawmill expansion by Dunkley Lumber in Carrot River, Carrier Forest Products ramping up production in Big River, a new oriented strandboard (OSB) plant for Prince Albert by new business venture, One Sky Forest Products, and the re-opening of the geographically iconic pulp mill located north of Prince Albert. The pulp mill—formerly owned by Weyerhaeuser and now owned by Paper Excellence—had been sitting idle for 16 years.
All told, it will result in over $1 billion in new investment in Saskatchewan’s forest industry over the next two years.
Saskatchewan’s forest industryIt’s worth noting that all of the investments being made in Saskatchewan are by companies headquartered in British Columbia. The devastation resulting from the mountain pine beetle infestation has severely reduced the merchantable wood basket in the B.C. Interior, forcing some companies to search elsewhere to survive and expand. Saskatchewan, with its under-utilized wood basket, is benefitting from that situation.
Bronwyn Eyre, Saskatchewan Energy and Resources Minister, says that these investments are part of the province’s ambitious Growth Plan to double the province’s forestry sector by 2030. Forestry is already a major contributor to the Saskatchewan economy as in 2020, forest companies working in the province generated $1.1 billion worth of products, which was an almost 30 per cent increase over the previous year.
As a result of the re-allocation, Dunkley Lumber plans to spend $100 million to expand its Carrot River sawmill, which will increase lumber production capacity by 75 per cent from 130 million board feet to 230 million board feet of softwood lumber annually. To accomplish this expansion, the facility will require about 821,000 cubic metres of softwood per year.
Strathnaver, B.C.-based Dunkley Lumber purchased the Carrot River sawmill, operating as Edgewood Forest Products, in 2019. The sawmill was originally constructed in 1976 and is the largest employer in this community located about two-hours northeast of Prince Albert.
Rob Novak, Dunkley Lumber President, says that the sawmill is adding a second line and will increase production over five phases of development by the fall of 2023.
Carrier Forest Products operates a sawmill in Big River, Saskatchewan, located between Meadow Lake and Prince Albert. The mill was constructed in 2002 and was purchased by Prince George, B.C.-based Carrier in 2011.
“The increased allocation is the critical piece for us to reach full capacity,” says Bill Kordyban, Carrier Forest Products’ President.
The date of January 3, 2006 will live in the memory of many Prince Albert and area residents as it was the day that Weyerhaeuser closed the pulp mill, leaving nearly 700 workers on the unemployment line. A tragedy for many, some viewed it as an opportunity to reallocate the massive Forest Management Area assigned to the pulp mill.
Over the next 15 years, the province received considerable input from many northern Saskatchewan First Nations communities that they wanted direct involvement in any reallocation and expansion of the forestry sector since that huge forest resource exists right on their doorstep, on their traditional lands. They looked to the example set by the Meadow Lake Tribal Council with its ownership of two sawmills, a forest management enterprise and now a brand new, wood-based, bioenergy plant as a model to achieve the same level of steady employment and economic prosperity in their own communities.
One Sky Forest Products Ltd has embraced that enthusiasm, stating that one objective of its $250 million investment into a new OSB plant for Prince Albert is to have significant equity investment and ownership by indigenous communities.
The company’s current partners are B.C.-based, Peak Renewables Ltd, local investors and 12 First Nations represented by Montreal Lake Business Ventures, Meadow Lake Tribal Council, Big River First Nation and Wahpeton Dakota Developments.
At full capacity, the OSB plant will produce 600 million square feet of panel products on a 3/8ths inch basis, requiring about 845,000 cubic metres of wood fibre annually. Start up of the OSB plant is targeted for 2023 with construction beginning in fall 2022. Once operational, it is expected to provide about 700 jobs with many filled by First Nations individuals.
“We are thrilled to be investing in a facility that will create added economic opportunities to Saskatchewan as it manufactures a durable product that is in demand locally, nationally and internationally,” says Cy Standing, Chair of Wahpeton Dakota Developments.
Robert Fincati, CEO of Montreal Lake Business Ventures, added that the OSB facility will bring tremendous economic spinoffs to the community and will be a significant employer, not just for Montreal Lake, but for all indigenous communities in the area. They were very pleased with the allocation announcement, having been involved in the process for a number of years.
When Peak Renewables purchased Canfor’s forest tenure and mill assets in northeastern B.C. in late 2020, it included the mothballed PolarBoard OSB plant in Fort Nelson, which has sat idle since 2008. The sale was approved by the province in August 2021. Peak Renewables plans to build a wood pellet plant at the Fort Nelson site instead, leaving the OSB production equipment surplus.
David Nikolejsin, Vice President of Corporate Development at the Brian Fehr Group, which owns Peak Renewables, confirmed that the PolarBoard equipment is ‘penciled in’ for use in the Prince Albert OSB plant, adding that the presses are still modern and that all the equipment will undergo refurbishment as part of the Prince Albert construction project.
However, that plan could change as the Group has plans for a number of OSB plants and should an opportunity arise where the PolarBoard equipment is better suited elsewhere, then the Prince Albert plant will be outfitted with new equipment.
The final, and some might argue most important, piece of the forest reallocation puzzle was the much-anticipated announcement by Paper Excellence that it will indeed re-open the Prince Albert pulp mill.
B.C.-based Paper Excellence is spending $550 million to refurbish and upgrade the facility. It will require 1.8 million cubic metres of softwood fibre annually to produce 350,000 tonnes of Northern Bleached Softwood Kraft (NBSK) pulp.
The province anticipates that 1,650 direct and indirect jobs will be created by this one re-opening alone. The pulp mill is slated for restart in 2023. Paper Excellence owns 10 pulp mills in Canada, included two in Saskatchewan.
There is a lot of wisdom behind Saskatchewan’s forest reallocation. By approving a new OSB plant, encouraging the reopening of the pulp mill, and making expansion and greater efficiency possible at two of the province’s largest sawmills, softwood lumber producers will now have a local market for their wood chips. Also, both softwood and hardwood resources will be harvested, resulting in better forest management as well as greater logging efficiency. Suffice to say that not only will new jobs be created at these wood processing plants, but also in logging, trucking and all the services needed to support a vibrant forestry sector. A big economic boom is about to occur north of Saskatoon.
By Tony Kryzanowski
Logging & Sawmilling Journal