Lumber at High Prairie Forest Products is loaded onto trucks for transportation. The carbon tax is expected to have little impact on lumber prices.

Carbon tax will have minimal effect on lumber prices

Richard Froese
South Peace News
Many changes are expected in the forest industry with the new carbon tax, but it will have little impact on lumber prices, says an industry official.

“The levy likely won’t affect prices at all, we take the price that the market gives,” says Brock Mulligan, communications officer for the Alberta Forest Products Association.

High Prairie Forest Products general manager Lee Barton says the parent company West Fraser Timber Co. declines public statements on the carbon tax and referred comments to the AFPA.

“The number one priority of the forest sector is the people who work in it,” Mulligan says in an e-mail.
“We’re going to do everything we can to mitigate these costs and maintain jobs, but in a sector that has to compete with producers from all over the world, this can prove to be challenging.”
“This can make it challenging to absorb new costs, particularly when we compete with jurisdictions that have lower labour costs, trees that grow faster and jurisdictions that are not levying carbon costs to their manufacturing sector,” Mulligan says.

The levy could impact many parts of forestry operations, from harvesting to operating mills; anything that involves energy could be impacted.

“We have also seen providers of services, especially on the transportation side, begin to pass on costs,” Mulligan says.

Energy intensive parts of the sector, such as mechanical refining of wood chips, will be most exposed, he says.

“We are talking to government about the full implications of this process and exactly how the regulations will be applied,” Mulligan says.

Even before the carbon tax, the industry has taken steps to be energy-efficient.

“The forest sector feels that we have made many of the changes that Alberta’s economy will have to undergo,” Mulligan says.
“Efficiency and using less energy has been a big part of the sector’s focus for many years now.”

Since 1990, the pulp sector in Canada has reduced greenhouse gas emissions by 66 per cent.

“We also produce enough clean, renewable energy for about four cities the size of Grande Prairie,” Mulligan says.

He notes that wood has a far lower carbon footprint than other building materials.