127 employees out of work as Kelowna sawmill announces shutdown

Tolko Industries is shutting down its Kelowna mill indefinitely putting 127 people out of work immediately.

"This decision was not easy for us to make," said vice president Troy Connolly in a statement.

"However, with lumber market prices at sustained low levels and high log costs in B.C., the mill cannot be cost-competitive."

The news comes as Tolko Kelowna was approaching the end of a six week temporary shutdown that started Aug. 6 and was scheduled to end Sept. 15.

In July, the company laid off an entire second shift of 90 workers.

"We know our people in Kelowna have done everything in their power to make the mill successful," said Connolly. "Sadly, this has nothing to do with them or their efforts."

Thursday's announcement is the latest bad news in what has been a brutal year in the B.C. forestry sector.

According to provincial estimates, approximately 6,000 workers, 25 mills in 22 communities have been affected by closures, layoffs or shift reductions.

Pat McGregor, the president of the United Steelworkers local 1-423, which represents the Kelowna mill workers, said he has reached out to other unions and employers to find out who can absorb some of the workers.

"We just need to be there for our members and their families and try to find some sort of solution to this problem," McGregor said. 

"It's easier to shut down than to build up a little bit of inventory, so we're in a bit of a crisis situation and I don't see it changing until something changes with the cost of logs."

Steve Thomson, Kelowna-Mission Liberal MLA and former forests minister, said the province can help industry by looking at adjustments in the stumpage fees and reducing operations costs.

Still, the industry's problems are complex.

Destruction caused by wildfires and a severe mountain pine beetle infestation — both linked to global warming — have created acute shortages of wood fibre in B.C.

In addition, a slowdown in U.S. housing markets have pushed prices downward. 

A spokesperson said if conditions change, and the mill could reopen with workers given 72 hours return to work notice.