Contractors Caught in Skeena Cellulose Troubles

At least seven Terrace-based silvicultural contractors are caught in the troubles surrounding Skeena Cellulose. Many of them are owed FRBC money. They argue the public funds should not go to the bank.

Silvicultural Contractors Caught in Skeena Cellulose Troubles

At least seven silvicultural contracting firms are owed a total of $250,000 following the most recent collapse of Skeena Cellulose. Most of the affected contractors are based in the Terrace area and had completed treeplanting and spacing projects for the beleagured forest company this spring and summer. Some of the unpaid projects were funded by Forest Renewal BC money as part of a multi-year agreement with Skeena Cellulose. Contractors say their employees likely face welfare this winter because there has been too little work to qualify for Employment Insurance. They are trying to convince FRBC to direct Skeena’s multi-year agreement funds through the ministry of forest to create some work before the field season ends in a few weeks.

Silvicultural contractors in the area are particularly irked that FRBC monies owed to them have fallen into the hands of the TD bank. They want to know why public funds spent to enhance a publically owned asset, the Crown’s forests, can be sucked into the maw of private debt and mismanagement created by Skeena Cellulose. They argue the public’s money should be immune to this diversion and rightly directed to contractors who have done the work. Since the forest company has not actually done the work directly, does not stand to directly benefit from the investment and is only a medium— FRBC partner—through which the money was spent the bank is not entitled to it.

Skeena Cellulose was rescued previously by the then NDP government in 1998 costing B.C. taxpayers $350-million. A buyer is now being sought for the firm which is the prime employer in B.C.’s northwest. The company is under recently extended court-ordered creditor protection after the Toronto Dominion Bank sought to have it put into receivership. Last month the government paid $124-million to cover part of its loan guarantees for troubled company. Skeena’s total debt is estimated to be $410-million.

In the mid-nineties Evans Forest Products Ltd. in Golden left logging and silvicultural contractors in a lurch similar to Skeena Cellulose’s latest default. After Forest Renewal BC guaranteed some loans contractors were eventually paid, although it took three years for the company to make good on its debts. After that near disaster some government MLAs in concert with the WSCA took up the challenge to modernize the antique Woodworker’s Lien Act. The current law offers few remedies to contractors caught in client failures. However, the politician’s enthusiasm lapsed even before their mandate expired and little came of it. Independent loggers in the Interior have recently renewed attempts to update the Act. The fate of Skeena Cellulose may accelerate this needed ammendment. But, for many contractors, it may only amount to be barring the gate after the company has bolted.