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For Terrace, the mill town left with no mill, the future brightens

    08/30/2005

Vancouver Sun

Don Cayo

B.C. Economy  |   Last year, the bankrupt operation’s receivers sold it to a local partnership.  That was just the beginning

It’s tough being a mill town when you don’t have a mill.  Just ask folks in Terrace, the self-styled Forestry Capital of B.C.

For nearly five years, its big, modern sawmill has sat idle  - not because anything’s wrong with it or its products,  but because its owners, who also owned the money-losing Skeena pulp mill in Prince Rupert, were broke.

In 2002, two years after it closed when a $400-million gush of government funds became New Skeena under new owners George Petty and the city’s, for the mill’s re-opening waxed and waned for a couple more years.

But workers and their families had already begun to drift away to find work.  Shops and other businesses hunkered down with smaller staffs and leaner earnings.  The mood was often bleak.

Finally last February an overdue jolt of optimism was injected into the community.  The mill’s receivers, who’d considered dismantling the mill and selling off its pieces,  instead sold the whole operation to Terrace Lumber Co.  a partnership of about 60 local investors, whom had to pool their resources to buy one of the new company’s 24 shares

This week their faith-and their investment-begins to pay off.  The mill reopened on Monday with a single shift - about 70 workers, or half the workforce from its heyday.

John Ryan, a local contractor and investor who is chairman of  TLC, points out, however, that the re-opening means a lot more than 70 jobs.

New Skeena’s former timber licenses were not a part of the deal when the TLC investors bought the mill  So, as the only major sawmill in the province without its own forest tenure, its wood supply is coming from a number of North Coast contractors who are licensed to cut under the province’s small business forest access provisions, and from nearby first nations.

Combined, these contractors are employing at least two times, and probably three times, more loggers than mill workers, Ryan said.

TLC has teamed up with IFP-Canada Corp., the subsidiary of the American owned International Forest Products (not Interfor), which will market the wood globally.

Initially, the first shipments, expected next month, will be sold in Canada and the U.S., but the long-term plan is to focus on the Pacific Rim, Europe and the Middle East.  The state-of the-art container port being built in Prince Rupert is a key part of the marketing strategy, as it costs only about a fifth as much to get the lumber to Rupert as to Vancouver.

But even without the modern port close at hand, the sawmill was never the moneyloser that dragged the Skeena companies down.  It’s a modern mill, built in the 1950s but rebuilt in the late ‘80s, and “a sweet mill” in the words of IFP vice-president Peter Keyes.

Keyes also says that not only the mill’s product – high-quality lumber from hemlock and balsam fir – but also its personnel are fondly remembered by customers that he has been re-establishing contact with in Japan.

“They’re asking after some of the people by name” he said.

And Ryan says a great many of the familiar names are, or will be, back.  He said 67 former workers, spread far and wide since finding other jobs, were contacted before the start-up and only two turned down offers to come back.

Of course, the modest recovery of the sawmill won’t, by itself, be enough to completely turn around the economy of a city of 25,000.  But other good things are also starting to happen.

Much of the optimism is tied to economic bright spots elsewhere in the northwest.  Terrace expects to, and already is, profiting from its role as the northwestern shopping and distribution centre. 

Chamber of Commerce president Bert Husband says the spending power from the Nisga’a of the Nass Valley just north of here in the wake of their self-government agreement of 2000, as well as from other first nations in the region, was key to carrying Terrace retailers through the tough years earlier this decade.

He expects that spending to continue, bolstered by workers from new mines proposed for the region and from the several big projects in store for both Prince Rupert and Kitimat.

Kitimat has three possibilities: a $500-million proposal to import and re-gasify liquid natural gas and ship it south; a $60-$70-million proposal to quarry sand, rock and gravel for export to California’ and a terminal and tank farm at the terminus of a proposed $2.5-billion oil pipeline from Fort McMurray, Alta. (Enbridge, the pipeline company, is also considering taking the line to Prince Rupert.)

Of even greater interest is Prince Rupert’s container port, with the myriad spinoff possibilities.  (More on that in tomorrow’s column.)  Certainly, in this region where a two hour drive to go shopping isn’t considered remarkable, it would bring new customers to retailers here.  More importantly, it would set the stage for a host of new industries that could capitalize on access to Asia-bound container ships.

“I spend my days trying to get industrial development people interested in what we have,” says Dave Menzies, the city’s economic development officer.  “It’s not that hard.”

A key, says Campbell Stewart, a businessman who sits on the city’s board, is that unlike Prince Rupert, which is built on a rocky island, Terrace has a lot of flat, easy-to develop land.

“With the port, this really becomes attractive. We’ve been a one-horse town for too long, and people are excited now” at the chance to diversify.” And excited – as Ryan would point out and many others would concur – to have that trusty old horse back in harness as well.