Major Nova Scotia sawmill to shut down, throwing 150 out of work

Western Nova Scotia's last major sawmill is shutting down.

Freeman Lumber announced Thursday that the Greenfield-based outfit could no longer afford to operate due to a lack of markets for wood chips following the closure of the Northern Pulp mill earlier this year.

The move means the loss of about 150 jobs, millions of dollars in the local economy in Queens County and surrounding areas and spillover into the broader forestry industry.

"It's terribly troubling," co-owner Richard Freeman said in a phone interview.

"Many of these people we've dealt with for generations. We deal with people I can remember my grandfather dealing with. These people are like family to us and it's heart-wrenching."

The company is stockpiling wood chips as it processes its remaining log inventory, but Freeman said it doesn't make financial sense to keep buying wood when there is no market for the chips.

"A lot of people think that wood chips are an incidental product, but they're absolutely fundamental to a sawmill operation and we need the revenue," he said.

The company said the decision is a direct result of the closure of Northern Pulp, which was Freeman's "most critical customer." The decision is not related to COVID-19, said Freeman.

Challenged by geography

Northern Pulp, formerly the province's largest player in the forestry industry, was forced to shut down earlier this year when the Pictou County mill failed to secure approval to build a new effluent treatment facility.

The company has said it will continue to try to get approval, but that process — and potential construction — would be a years-long process.

In the meantime, other members of the industry have scrambled to try to transition and find new markets.

Freeman Lumber, the largest operation to go down since Northern Pulp closed, has been particularly challenged by geography. While other mills around the province were able to temporarily send wood chips to Port Hawkesbury Paper, it was too far to be cost effective for Freeman Lumber.

Freeman said the company thought it had an arrangement to send its chips to a kraft pulp mill outside the province, but the cost of shipping by rail and truck made the venture prohibitive.

"Many of the existing alternative facilities that could potentially handle this chip volume are that much farther away from us," he said.

'A very big deal'

Stephen Cole, a forester and partner with woodlot management company H.C. Haynes, said losing the second-largest sawmill in the province is a "very big deal," especially for landowners and smaller mills in western Nova Scotia.

H.C. Haynes told its contractors three weeks ago that there was no more work for them. Cole said the trickle-down effect is significant and impacts more than 500 jobs.

"We're talking road builders, loggers, landowners, guys that cut a little wood themselves, silviculture operators — and make no mistake about it, the garages, the fuel companies, they're all going to feel it, too," he said.

'That's our backup'

Jeff Fairn is one of those landowners who will take a hit.

The Annapolis County farmer has about 800 hectares of woodland that he treats as a secondary income.

"If we have a bad year farming, that's our backup," he said.

After two straight years of difficult farming due to weather damage, Fairn said that woodland has become especially critical. But he's now facing uncertainty because he was selling his wood to Freeman Lumber.

"I had a deal with Freeman's to cut this spring to get me through this year and now they're shut down, so we didn't get our wood done," he said.

Fairn estimates he had about $300,000 worth of wood that was to be cut.

'A liability now'

Likewise, Randall Knox, a third-generation forestry worker, now has nowhere to sell his logs.

Knox, who owns R.W. Knox Forestry Ltd., manages about 800 hectares of woodland in Lunenburg and Queens counties. He said his five-person operation has had to shut down and he's watched the value of his land plummet.

"Except for the house that I live in, it's all classed as forestry and it's a liability now instead of an asset," he said.

Not giving up

Freeman said the company has been looking for alternate markets since 2011, which is a year before Bowater Mersey, its main customer at the time, closed. That's when Northern Pulp, until then Freeman's plan B, became its key customer.

Efforts to diversify since then have included looking at biofuels, wood pellets, co-generation plants and export markets for chips.

"The problem is, any of those would have reduced our chip revenue by about 50 per cent, and we operate in a market where we have to be competitive for private wood sold by landowners from across the province," said Freeman.

For now, Freeman said the company will continue to try to find a way to get the mill operating again and people back to work.

"We just haven't been able to find anything yet," he said. "We certainly aren't giving up, by any means."

Forestry minister 'disheartened'

Lands and Forestry Minister Iain Rankin was not made available for an interview.

In a statement, he said he was "disheartened to hear about Freeman Lumber's closure." Rankin said the province's forestry transition team continues to work at finding new avenues to make the industry sustainable and viable for the long term.

"While government responds to the COVID-19 pandemic, our team continues to support the sector's transition, believing that this sector has the potential to play an important role in our economic recovery."

Rankin said the $50-million Forestry Innovation Transition Trust will soon begin to consider investment opportunities.

"I am pleased to hear Mr. Freeman is not giving up on the future, as I am also hopeful there are brighter days ahead," he said.