Scribbles from the 2019 COFI Convention

1. Convention buzzwords: innovation, inclusion, sharing, partnerships, relationship, certainty, predictability, capacity (ability), conservation, caribou

2. “A new model of forest management.”
Doug Donaldson, Minister of Forests, Lands, Natural Resource Operations & Rural Development

3. “China-U.S. negotiations are only a small subset of the larger tensions.”
Robert Johnston, Managing Director, Global Energy & Natural Resources, Eurasia Group

4. “India and Southeast Asia will become more important for Canada’s forest sector than China.”
– Robert Johnston

5. “There are very few world leaders that are fierce defenders of globalization.”
– Robert Johnston on the “G-Zero World”

6. “Shareholders are having a stronger influence than governments on climate action – it’s very tough to get climate policy in a context of populism.” – Robert Johnston

7. “Where do we get growth from in the Canadian economy when the drivers are cooling? Productivity innovation.”
Jock Finlayson, Executive Vice President and Chief Policy Officer, Business Council of B.C.

8. “We’re in a low interest environment for as long as the eye can see. How will policy makers respond next time we move into a recession world?”
– Jock Finlayson

9. “We have seen a dramatic decrease in consumption.”
Chris McIver, Vice President, Sales & Marketing, West Fraser

10. “The use of wood in appearance applications is growing.”
Don McGregor, Vice President of Sales & Wholesale Supply, Western Forest Products

11. “There were 487 mass timber projects in 2018. In 2013 there were five.”
Bart Bender, Senior Vice President, Sales & Marketing, Interfor

12. “It’s always easy to get a deal if you’re prepared to get a bad deal. This is not a good time, we’ll have to wait until the circumstances are right.”
David MacNaughton, Ambassador of Canada to the United States

13. “Consumer groups have very little political clout (in the U.S.). I’ve been very surprised in observing this fact.”
– David MacNaughton

14. “Nothing unites Republicans and Democrats more than unfair trade with China.”
– David MacNaughton

15. “The U.S. sells more goods to Canada than China, Japan, and Great Britain combined.”
– David MacNaughton

16. “Our relationships with the U.S. are strong and deep.”
– David MacNaughton

17. “The data lake is turning into the data swamp. Everything we do is about clarifying the complex.”
Charles Lavigne, CEO & Co-Founder, LlamaZOO

18. “How to build relationships with Indigenous communities? Go in without an agenda.”
JP Gladu, President & CEO, Canadian Council for Aboriginal Business

19. “(On caribou recovery) there will be active engagement with communities (this week) and natural resource sector parties.”
Beth MacNeil, Assistant Deputy Minister, Canadian Forest Service

20. “Under the previous government, forestry was an engine that was allowed to take over. The status quo is not acceptable. There are high expectations for the industry to make changes.”
John Allan, Deputy Minister, Ministry of Forests, Lands, Natural Resource Operations & Rural Development

21. “We all know what the problem is in the Interior; we have too much capacity and too few trees.”
– John Allan

22. “There is desire on the public’s part to regain some control of forestry and the management of old growth on Vancouver Island.”
– John Allan

23. “We’ve lived up to our commitments (caribou recovery) but we’ve been a bit late coming to the communities.”
– John Allan

24. “I am shocked and disappointed by what is happening this week (in Chetwynd). Without consultation, how are we going to get through these cycles? It discourages future investment in B.C.”
Ted Seraphim, President & CEO, West Fraser

25. “I hope he (Horgan) talks about our industry in such a way that it attracts young people.”
– Ted Seraphim

26. “Government to government relationship is key in China. China values relationships even moreso. We can’t get complacent, we need to refocus, continue these trade missions to get the message to the Asian markets.”
Don Kayne, President & CEO, Canfor

27. “The biggest driver is wood costs. B.C. has the highest wood costs in North America. With B.C. as our base, we needed to expand, grow our diversification in Europe and the U.S. South.”
– Don Kayne

28. “Next year, the forest products industry is expected to have 7300 openings. Youth are the future of forestry, embrace them. Offer opportunity, growth, reasonable pay. Promote economic stability, work life balance, and social consciousness. Create a respectful and enjoyable workplace. If I identify and prove that there’s a better way to do something, will I be encouraged to pursue it?”
Fiona McDonald, Communications Specialist, Conifex Timber Inc.

29. “The problem with just posting a job is you skip the first two steps of the marketing funnel (Awareness and Interest, before Desire and Action). Get out in front of prospects rather than waiting for the prospect to come to you.”
Quinn Miller, Energy Engineer, West Fraser

30. “How to motivate young professionals? Engage new perspectives and break down barriers. Encourage mentorship and knowledge sharing. Support through continued learning and education.”
Ethan Griffin, Production Superintendent, Interfor

31. When we talk about reconciliation we need to reconcile our relationship. Consent does not mean veto. Consent is shared decision-making. We have to get to a place where we can make decisions together. The fibre basket is shrinking, the AAC is coming down everywhere. How do you want this arrangement? How do you want to access that fibre?”
Terry Teegee, Regional Chief, B.C. Assembly of First Nations

33. “It’s not about a final agreement. It’s about relationship, moving forward together.”
Celeste Haldane, Chief Commissioner, B.C. Treaty Commission

34. “It always amazes me how often I get asked the question ‘What’s the best way to start a relationship?’ Pick up the phone. There’s something that intimidates people about having that conversation.”
Doug Caul, Deputy Minister, Ministry of Indigenous Relations and Reconciliation

35. “At the Youth Outland Employment Camp (OYEP) West, Indigenous youth build confidence, establish networks, learn how to work both independently and as a group, and develop a keen understanding of workplace expectations.” See: 2018 OYEP sponsorsOYEP StatsOYEP West – 2019 Partnership Package
Derek Orr, Business Development Manager, Carrier Lumber

36. “The forest industry is the most innovative sector in our economy.”
John Horgan, Premier of B.C.

37. “A negotiated settlement (SLA) would have been preferable, but that’s not possible.”
– John Horgan

38. “(On coastal forest revitalization) we’re not going to just take down our forests to move them down to other jurisdictions where they can extract the value.”
– John Horgan

39. “The situation in the Interior is deteriorating but there are opportunities. We’ll approach it TSA by TSA. How do we add value, not how do we allocate timber supply. It’s about how do we take our dwindling fibre basket and maximize the value. The process is evolving but it is not prescriptive; if I prescribed a solution it would be inadequate.”
– John Horgan

40. “I always talk about value-added and (the big producers) say ‘we can smell the incense when you start talking that way.. we need markets!”
– John Horgan

41. “More high value, less high volume. I’m going to give you the incentives you need to transition between high volume and high value. These are opportunities, not obligations. It’s on you to take this challenge.”
– John Horgan

Sharpening the Saw

Its been said that there is power in staying connected to other people in your industry. My fifth consecutive B.C. Council of Forest Industries (COFI) Convention, held in Prince George last week, provided again opportunity to return with ideas to sharpen skills and stay abreast of a rapidly-changing lumbering landscape. The listed takeaways include a surprise at how few marketing and sales types were among more than 550 delegates who packed the Prince George Civic Centre for agenda presentations:

-The prevailing politically-charged environment these days seemed to shape tempered viewpoints from panelists on several fronts. Folks looking for Interfor President & CEO Duncan Davies to deliver pertinent softwood lumber dispute insights were disappointed. His confirmation lauding the work the Softwood Lumber Board is doing to grow softwood lumber demand did not excite. Fortunately a pointed question from the audience, asking why Canadian producers would support the SLB when a number of U.S. members are working to constrain market access, elicited topical response: “The tariffs are wrong. Whether or not the economy is helping to soften the blow, the tariffs should not be there. Inspite of trade matters, we need to continue to invest in our biggest market.” From West Fraser President & CEO Ted Seraphim: “Today, we’re not worried about the softwood lumber dispute. But if the market were weaker, we’d all be worrying about it. So we need to grow demand.”

-While there wasn’t a panel discussion dedicated to timely transportation concerns, Federal Minister of Transport Marc Garneau addressed the situation. He said CN and CP need to do better. He pointed to Bill C-49 (Transportation Modernization Act) but his reporting an improvement in railcar capacity for grain fell flat among an audience concerned with lumber shipments. From Beth MacNeil, Assistant Deputy Minister, Canadian Forest Service: “Without infrastructure, there is no trade.”

Jock Finlayson, Business Council of B.C., talked about the uncertain, shifting economic landscape in this province. He referenced the impact of uncertainty on investor confidence and how Canada is lagging in healthy capital formation. He sees little upside in residential construction in Canada, while pointing to “fundamental organic demand for housing growth” in the U.S. 30-39 age group. He suggested recent fiscal stimulus in the U.S. is unnecessary and poorly timed. Presently 300,000-400,000 manufacturing jobs in the U.S. are unfilled.

-According to Paul Jannke, Forest Economic Advisors (FEA), the U.S. labour force is the single biggest constraining factor in U.S. sawmill production.

-It was refreshing to hear from B.C.’s new Minister of Forests, Doug Donaldson, but otherwise nothing noteworthy recorded.

-An excellent presentation by Kevin Pankratz, Senior VP, Sales & Marketing, Canfor addressed export markets and the global outlook. Interesting to learn that the R&R market is bigger than new home construction. Expansive growth in hybrid construction, off-site construction, and building automation in all markets reported. “Governments everywhere will increase focus on green building initiatives to meet emission targets.”

-Most edgy presentation (“Fibre Supply – It Is What We Make It”) goes to Diane Nicholls, now two years into her job as B.C.’s Chief Forester. In the aftermath of the Mountain Pine Beetle, she seemingly referees the constant fight for access to quality fibre, further complicated by the Spruce Beetle presently eating into the midterm timber supply.

-The Forestry Jobs for Today and Tomorrow panel might have been one of the highlights. Best moderator of the convention goes to Sandy Ferguson, VP Corporate Development, Conifex. It was interesting to hear industry (Canfor/Interfor/Tolko/West Fraser) is working to rejuvenate parts of the BCIT Wood Products Manufacturing Program I graduated from, which has been dormant since 2003. From Kara Biles, Manager Learning & Talent, Canfor: “Aggressively advocate for diversity and inclusion in your company; diversity is a competitive differentiator shifting market share toward more diverse companies.” Derek Orr, Business Development Manager, Carrier provided update on planning underway for a Ranger Program aimed at development/training of Aboriginal youth. Lots of sponsor traction for the program including Carrier, Dunkley, Conifex, West Fraser, and Canfor.

Premier John Horgan seemed pleasantly surprised with the warm welcome before delivering his keynote speech Friday morning: “Thank you for clapping.” He deftly navigated the politically-charged minefield.

~~~

At first glance, the 2018 COFI Convention struck me as perhaps being lighter on content in comparison with past years. However, on second glance, it was rich in both content and opportunity, with plenty to digest. As one among four delegates from Dakeryn Industries, I again return from this convention with new and enlightening ideas. For us all, it was a worthwhile time to ‘sharpen our saws’.

Premier John Horgan with COFI President & CEO Susan Yurkovich (6 Apr 2018)

11 Questions for 2018

Here are 11 questions that Harderblog will be watching in 2018, in search of answers:

1. Will rhetoric of military strike pass the ‘tipping point’ into war with North Korea?
2. Will the Bitcoin excitement be fading, or prove to be a bubble?
3. Will the extreme weather patterns evidenced in 2017 be as pronounced in 2018?
4. Will Trump take steps to call a halt to the special prosecutor’s investigation into Russia’s interference in the 2016 U.S. presidential election?
5. Has integrity lost some of its lustre as a perceived prerequisite for leadership success?
6. As higher lumber prices effectively offset impact of duties, will Canadian major producers’ newly-hedged investments in U.S. production assuage any further concerns companies such as West Fraser and Canfor might have about the ongoing Softwood Lumber dispute?
7. Will Germany repeat as FIFA World Cup champions?
8. Will the powers that be acknowledge that the remanufacturing (value-added) segment of the Canadian forest sector is being unfairly penalized in the application of the AD/CVD?
9. Will softwood lumber be incorporated into NAFTA?
10. In view of the fractured supply chain, will lumber buyers abandon the “just-in-time” model in favour of securing coverage that satisfies longer-term projected needs?
11. Will broccoli, the least-trusted vegetable of 2017 among lumber traders and the general population, retain that notoriety in 2018, at the same time as the world watches broccoli’s favorability surge to number one in Scotland?

COFI Countdown

The sold out COFI 2017 Convention kicks off at 6:30pm this evening with an ice breaker in the stunning wood-infused architecture of the Vancouver Convention Centre. The largest gathering of the forest sector in Canada, we’re told over 600 delegates are registered this year, making this the biggest COFI Convention in ten years. The annual meeting brings attention and awareness to the significance of forestry to the economic well-being of the province. This year’s theme is Forestry for the Planet. Forest Products for the World.

The convention’s jam-packed itinerary ensures plenty to capture our attention through Friday. Tomorrow’s keynote speaker is renowned architect Michael Green who will present Increments of Change: from early tall wood buildings to a global movement. I’m also looking forward to the International Markets Review in the morning, and an afternoon CEO panel featuring Nick Arkle (Gorman Group), Duncan Davies (Interfor), Don Kayne (Canfor), and Ted Seraphim (West Fraser). On Friday, David Emerson, BC Trade Envoy to the United States, will discuss Canada’s Trade Negotiations Agenda with Kirsten Hillman, Assistant Deputy Minister, Trade Policy & Negotiation, Global Affairs Canada.

There’s a ton of other interesting panel discussions before we hear from BC Premier Christy Clark, keynote speaker at Friday’s closing luncheon. Speaking of politics, it’s interesting today to look back in the blog archives at Premier Clark’s keynote at the COFI 2013 Convention, a fiery speech which seemingly sparked her campaign’s comeback, leading to a surprise victory in the provincial election the following month.

A good preview of the COFI 2017 Convention is available in the podcast below. It includes a number of hard-hitting caller questions for Susan Yurkovich, COFI President & CEO. My 23 takeaways from last year’s excellent COFI Convention in Kelowna are available here.

Autumn Winds

Elizabeth Browning’s poem The Autumn refers to this time of year “Where waving woods and waters wild  Do hymn an autumn sound.” For many of us, this year’s first sounds of fall bring an unusual mix of seasonal notes:

Amid Maritime vacation memories not yet fully unpacked come reviews of first day of kindergarten for my four-year-old, a tumble and fall off the bus on day one of Grade One for my six-year-old, and newspaper reports suggesting the provincial government could seek exemptions from export duties for B.C. re-manufacturers that might come in a new Softwood Lumber Agreement with the U.S.
Ensuring access to timber for the value-added sector poses ongoing challenge. It is hoped the proposed exemption would provide incentive for big timber licensees to make more wood available to the value-added segment of the forest industry. Meanwhile, a report today from CIBC Capital Markets cites a source via Inside U.S. Trade who suggested SLA negotiations were closer at the 100-day period than they are now. 

It seems the “chilling autumn winds” that Browning talked about could deliver more than a bloody lip that highlighted my daughter’s Grade One debut. Amid election-fueled talk of softwood negotiations, lumber traders are bracing for the October 12th standstill expiry to deliver more tears than exemptions.

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Lunchtime! with Grandad – Mahone Bay, Nova Scotia (30 Aug 2016)

 

COFI Convention in full bloom

There’s always a chance that brilliance of cherry trees in blossom could upstage a Council of Forest Industries Convention scheduled for mid April in the Okanagan. However, the program itinerary ensures there’s plenty to capture our attention at the Kelowna meetings this weekend. COFI’s Convention website boasts that the largest gathering of the forest sector in Western Canada will attract 400-500 delegates “including industry CEOs, vice presidents and senior managers from continental North America and offshore, senior representatives from customers, suppliers, financial institutions, law firms, local government and chambers of commerce, Federal and Provincial Ministers, MPs, MLAs and senior civil servants, along with Premier Christy Clark… and me.

The Convention though, will see and hear the Premier, featured as closing keynote speaker. The annual gathering brings attention and awareness to the significance of forestry to the economic well-being of the province. My 25 takeaways from last year’s convention are available here.

COFI points out that “with 140 B.C. communities dependent on forestry, the 300 wood products manufacturing facilities in B.C. provide one out of every four manufacturing jobs in the province and account for 35 per cent of all commodity exports from B.C. COFI CEO and President, Susan Yurkovich, featured speaker at the upcoming NAWLA Regional Meeting in Vancouver April 21st, reminded us that “the industry directly and indirectly employs about 145,000 across the province, from Fort St. John to Vancouver, with one in 16 jobs in B.C. associated with forestry.”  All of this surely representative of an industry in full bloom.

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Lake Okanagan, Kelowna (April 9, 2016)

Tourists and Woodsmen

Aims of finding a fair balance between the tourism industry and forest industry is important to all. During the week, we make our living by marketing quality wood products produced from the forest. We facilitate shipment of those products around the world. On the weekends, we also enjoy being tourists in our own province with getaways into B.C.’s coastal and Interior woods. The unmatched natural beauty of our forest attracts visitors from around the globe. They’re expected to visit in record numbers this season. Of course, value of the loonie helps. Billions of dollars are at stake in both tourism and forest-related industries in B.C.

I was reminded of the challenges involved in balancing the interests of both industries by this article in The Vancouver Sun describing concerns over a clearcut visible from the Hope Slide Viewpoint. A Council of Tourism Association (COTA) report in 2007 entitled A Tourism industry strategy for forests provided recommendations for improving the identification, management, and safeguarding of scenic areas significant to tourism – particularly in the face of salvage logging beetle-killed wood. This 2011 report by the Association of B.C. Forest Professionals included recommendations that Visual Quality Objectives (VQO) should be a focus for nature-based tourism. Professional Foresters agree that “difficult trade-offs exist when considering the right balance following Mountain Pine Beetle damage. Increasing or reducing one value at the expense of other values requires informed discussion and debate… Public consultation in areas of high sensitivity is required to prevent undesirable outcomes.”