As the B.C. coastal forest strike stretches into its second month, builders, lumber suppliers and producers are watching to see what the long-term impact might be on their sector and the housing market.
"The longer the strike, the greater the impact, obviously," says Peter Simpson, CEO of the Greater Vancouver Home Builders Association, who is calling on both forest companies and unions to "negotiate responsibly" and find a speedy resolution.
Forest companies, union leaders and analysts have predicted the strike, which began in July, could last several months.
The dispute comes at a time when the industry is grappling with consolidation following mergers and acquisitions, the development of supermills in the Interior, the rising Canadian dollar and the effects of the ongoing softwood lumber agreement with the U.S.
"There's a lot of issues that we're dealing with right now," says Simpson. "This will not do any good if the strike lasts long."
Builders will begin to feel the effect when lumber suppliers do, he adds. And framers, most affected by the strike, are among skilled labourers who are already in short supply across the country and could easily move to another jurisdiction.
Parker Hogan, a spokesman for the Alberta Forest Products Association, says the B.C. strike does not affect wood supply at Alberta mills because no logs are shipped between the provinces. But the B.C. strike could increase demand for some of Alberta's processed lumber.
"There is a potential for that to happen, also understanding that the forest products market is a North America-wide market," says Hogan. "If the demand is there, it could be filled somewhere, but it could just as easily be filled by a supplier in, say, Washington state or northern California, especially if they're looking for certain types of wood.
"Cedar doesn't grow in Alberta."
B.C. suppliers say they have not faced any lumber shortages - yet.
"There's enough lumber out there," says Ken Humphrey, operations manager at Langley-based Country Lumber Ltd.
He says the strike will affect the price of wood only slightly. The labour impasse doesn't affect his firm, a primary contractor, as much as other companies because it does not rely as much on cedar and hemlock - two staples of the coastal industry - as much as some rivals.
David Fisher, senior vice-president with Mitsui Homes Canada Inc., says his firm could face a shortage of engineered wood products.
"But other than that, really, we don't buy anything from the coastal industry," says Fisher, adding most of his firm's wood comes from the B.C. Interior.
Some buyers who now get their wood from coastal mills will have the option of purchasing lumber from Interior mills, which tend to be much larger. But the type of wood that companies use is "always going to be the catch."
Philip Hochstein, president and CEO of the Independent Contractors and Businesses Association of B.C., says forest firms stockpiled lumber outside struck facilities in order to handle customer needs.
"When those stockpiles run out, then we begin to have a problem," says Hochstein. "But, frankly, the world's awash in wood. We'll find other ways to get it."
The first alternative will be imports from the U.S. He expects a slowdown in the American housing sector to increase Canadian import supply.
"We don't have a softwood lumber accord problem for nothing," says Hochstein. "They have ample supply. That's why the price has been falling."
Jock Finlayson, executive vice-president of the Business Council of British Columbia, says the Vancouver housing market probably won't be badly affected.
But he believes the strike will hurt those communities, such as the Cowichan Valley on Vancouver Island, whose entire economies depend on the coastal forest industry.
The coastal industry, which employs 6,000-7,000 people, is much smaller than it was 20-30 years ago, when it employed 30,000, and pales in comparison to its Interior counterpart.
But Finlayson says it's still a significant contributor of lumber exports and "substantial industry in its own right."
"Those exports have stopped, or they will," says Finlayson. "If that lasts long enough, then it's obviously going to have a negative impact on B.C.'s overall export performance - which is already rather poor this year because of the weak lumber markets and the sharp downturn in U.S. housing starts."
Approximately 90 per cent of B.C. wood is exported, mainly to the U.S., he says. The U.S. government recently launched an arbitration case under the softwood lumber agreement on grounds that B.C. and Alberta exports are not properly taxed.
But Finlayson says the forest strike won't affect housing sales in Vancouver because the industry is not large enough to have an impact.
David Podmore, who has been appointed by Premier Gordon Campbell to oversee the Vancouver Convention and Exhibition Centre expansion project in wake of cost overruns, says the forest dispute won't affect the new facility, which is slated to feature B.C. engineered wood. Its wood has already been procured by a supplier.
But a lengthy Vancouver civic strike, which has prevented developers from obtaining necessary building permits, could affect improvements to the existing centre.
"In time, if it's a protracted labour dispute, it will impact schedules, not on the main convention centre (expansion) project itself, but some related projects at Canada Place," says Podmore, adding construction there won't start until at least next spring.
The expansion site has the approvals that it needs for now and is using its own building inspectors, he adds. But Podmore, former president of the Pacific chapter of the Urban Development Institute, says some firms could be hurt by the two strikes.
"Those that are building wood-frame projects will probably find both (permit approvals and wood availability) more problematic," says Podmore.
Avtar Bains, senior vice-president of Colliers International in Vancouver, says both the coastal forest and Vancouver civic strikes will deter future investment in development projects.
"Without question, things get delayed, and additional costs, ultimately, are incurred as a result of these delays," says Bains. "Ultimately, someone is going to pay for that."
Bains fears the disputes could prompt overseas institutional investors to invest in Alberta because it is viewed as "more solid, stable and therefore, reliable."
"Indeed, the perception can be worse than the reality, but it doesn't matter," says Bains. "If the perception is that work stoppages - either in the private or public sector - are going to have an impact on the fluidity of commerce, that's an issue with capital (investors.) That's when capital goes somewhere else."
Grant Ainsley, executive officer for the Edmonton-based Canadian Home Builders' Association-Alberta, says it's probably too early to tell how the B.C. coastal forest strike will affect construction companies west of the Rockies.
"The builders are kind of at the end of the line, obviously, but an important end of the line because the builder deals with the consumer," he says. "But my guess right now is that most builders would probably get their information on what would happen from the suppliers."
(Monte Stewart can be reached at firstname.lastname@example.org)