Tolko extends Christmas layoffs in Armstrong and Soda Creek to end of January

High log costs plus weak wood markets equal forestry mill layoffs every time.

Vernon-based Tolko Industries today announced it will extend downtime at its Armstrong and Soda Creek lumber mills until at least the end of January.

The layoffs affect 185 workers in Armstrong (north of Vernon) and 180 in Soda Creek, which is near Williams Lake.

The original holiday downtime started Dec. 19 in Armstrong and Dec. 28 in Soda Creek and the extension announcement was made today.

"We can't say for certain how conditions will take shape over the coming months, which is why we will be evaluating the downtime at the end of the month to determine next steps," said Tolko communications advisor Chris Downey.

"That could mean resuming operations (at the end of January) or extending the downtime for a further period. We will continue to watch the market and are working with the government around log costs. Unfortunately, high log costs and weak markets continue to impact the forestry industry."

To help employees get through this layoff of at least six weeks, Tolko is providing some financial support through the Government of Canada's Supplemental Unemployment Benefit (SUB) program, which is added to regular Employment Insurance benefits right away.

"We do not make these (layoff) decisions without a lot of consideration," said Tolko vice-president of solid wood Troy Connolly.

"We have an extremely committed workforce at these locations whose families and communities rely on Tolko. We will continue to support our employees during this challenging time."

The six week closures at both the Armstrong and Soda Creek will reduce production by about 35 million board feet of stud lumber used mostly in construction.

"While our goal is to ensure consistency and stability for all our operations, the steep decline in lumber demand and upward cost pressures in the province make the decision necessary," said Connolly .

"A lack of available economic fibre (logs) and weak market are impacting our operating footprint in the province."

While 35 million board feet sounds like a lot, and it is a lot, Tolko still has enough lumber production and stockpiled to meet customer demand.

"Tolko will continue to support our customers and do our best to minimize any impacts," said marketing and sales vice-president Pino Pucci.

"Our customers are understanding of current market conditions and aware of our ongoing commitment to serve them."

Forestry, previously the economic backbone of BC, has been hard hit the past few years because of a lack of affordable timber after the pine beetle infestation, volatile commodity prices and the construction decline across North American reducing demand for wood.

Tolko has around 3,000 employees and a dozen plants across Western Canada making lumber, plywood, veneer and strand board.

Tolko used to have a mill in Kelowna that employed 174 when it closed for good on Jan. 8, 2020 because off all the aforementioned challenges.

Tolko is now looking to redevelop its Kelowna site on the north downtown lakefront into a huge mixed-use neighbourhood that could include parks, hotel, retail, restaurants and condominiums.