Program provides bridging loans for coastal logging contractors

Fund is designed for businesses affected by strike

Coastal logging contractors affected by the ongoing labour dispute between the United Steelworkers and Western Forest Products, including those in Powell River, can now apply for bridging loans to help them make payments on their logging equipment, according to a media release from the provincial government on Friday, January 31.

The provincial government established the $5 million Coast Logging Equipment Support Trust (CLEST) on January 16 to help avert foreclosure of logging equipment on the coast. Through the trust, eligible independent coastal logging contractors will be able to borrow bridging funds.

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Earlier this month, the province appointed Eric van Soeren as independent trustee with full oversight of the CLEST. In this role, van Soeren will be responsible for all financial decisions for the trust, independent from the government. The trust will provide qualified applicants with long-term loans at commercial rates for their eligible logging equipment assets.

van Soeren will undertake all financial assessments and negotiate the structure of the loans.

Eligible coastal logging contractors (applicants) who are approved for funding through the CLEST will not receive money directly. The trustee will coordinate all loan payments with the leaseholders, financial institutions and equipment companies for logging equipment that is in arrears.

Eligibility and application details for the CLEST are available online at clest.ca

Russ Parsons, owner of Tilt Contracting in Powell River, said there are probably a couple of contractors in the region who are really struggling.

“Myself, I’ve been in the business long enough to keep my cash flow quite happy, so I’ve been sitting around for a few months, but by no means are we going to be applying to the government to keep my business afloat,” said Parsons.

He said he has been sitting idle, largely, since the strike began. He said he has just picked up a couple of timber sales; one by Saltery Bay and another by Lois Lake, so his company is back harvesting actively.

“It’s three to four months of work for us,” said Parsons. “Hopefully, by then, Western Forest Products goes back.”

Parsons said a number of Powell River companies have been affected by the strike, non-union contractors who work for Western Forest Products. Some have been “completely stuck” by the strike, with nothing to do.

“I’ve been in business since 2004 with my logging company and I’ve never, ever seen this,” said Parsons. “Contracts haven’t been exactly plentiful so your cash flow is depleted pretty quick. There’s not much money for reserve because the amount of money we put out for capital investments is massive. I’ve got $6 to $7 million invested in equipment in this town to work for Western Forest Products and other contractors.

“It does take a toll. We’re pretty fortunate that we have these couple of jobs that will kind of keep us afloat, but if I sat around for another three or four months, you can only go on so long before you have to get rid of your assets and maybe think about doing something else.”

Parsons said he has a good reputation with the bank he’s been doing business with for the last dozen years but his banker has told him there are contractors who don’t have next month’s payment.

Besides the strike, there are other issues affecting the forest industry, said Parsons. He said the province’s old-growth strategic review is ongoing, and there are poor markets.

“It’s like a perfect storm of negative problems with our industry,” said Parsons. “The sooner the strike ends, the better for everybody. There’s definitely some tough times here.”

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