State Of The Industry, Fall 2022 (Tree Planting in Western Canada)

“Conflicting Economic Data.”  That seems to be the current theme of Canada’s financial reality.  And the same phrase may perfectly describe the situation that western Canada’s planting industry currently finds itself in.  Bear with me for couple paragraphs of economic commentary, before I go more directly into the outlook for the 2023 planting season.  Economic analysis matters, because I believe that a major recession is coming our way like an oncoming freight train.

Around the globe, inflation is running rampant.  It doesn’t really matter how you define inflation, because all indicators are on the rise:  Food, fuel, other energy, consumer goods, services, etc.  Economists could argue for weeks about the current reasons for inflation, but the basic pressures are heavily rooted in energy supply shocks and a couple years of barely-restrained printing of money by various nations’ central banks (mostly to support global economies during Covid).  The current consumer price index inflation numbers are running at slightly over 7% annually in Canada.  As a result, the Bank of Canada has been pushing up the interbank lending rate, which causes banks to increase their prime rates and all other interest rates.

Higher interest rates generally cause people to pay down debt, rather than spending their earnings on fun things.  Therefore, the goal of higher interest rates is to cut down on consumer spending, which reduces demand for goods and services.  In turn, reduced demand normally puts downward pressure on prices for goods and services.  But higher interest rates also hurt a lot of people, because most of Canada’s population has mortgages, credit cards, and/or loans of various types.  We’re getting attacked from both sides, paying more at the pump, more at the grocery store, more for other goods and services, AND dealing with higher interest rates on top of that.  Sure, the higher interest rates will eventually stop prices from rising so quickly, but as I mentioned earlier, I believe that we’re in for a lot of short-term pain over the next 12-24 months.

In terms of wages, the economy is still quite strong, and there are more job opportunities than there are people to fill them.  The current unemployment rate in Canada is pretty low when compared with historical data.  When unemployment is low, employers need to compete harder to attract employees, so wages go up.  Although there are various ways of measuring this, it is likely safe to say that by year-end, wages in Canada will have increased by at least four percent compared to last year.  Unfortunately, a four percent increase in your wages doesn’t seem so great when everything that you buy costs ten percent more than it did a year ago.

The planting industry’s economic health varies from year to year according to many factors, but usually the most significant impact depends on the basic supply/demand of planting contracts, ie. how many trees the industry needs to plant each year.  When overall industry numbers go up (as they did a few years ago, after the 2017 and 2018 wildfire seasons in BC), tree prices go up at a company level.  And sometimes this trickles down to a corresponding increase in planter prices.  When industry volumes go down, companies bid aggressively to chase a diminishing amount of work, and prices go down.  We saw that happen these past twelve months.  The “boom & bust” periods are especially visible in public government work, which accounts for roughly 20% of the trees planted in BC each year.  However, work for private clients makes up the other 80% of industry volume.  Private client pricing (mills, logging operations) is more stable than public tenders, because a lot of that work is based upon multi-year agreements between mills and planting contractors who work together year after year.

Going into 2023, industry volumes are decreasing.  In 2022, we think that BC planted about 286 million trees.  The estimate for 2023 is roughly 262 million trees.  Planting contractors are therefore competing for a piece of a smaller pie.  Supply/demand economics dictate that public bid prices would normally decrease during the Viewing Season (for 2023 projects), which is just starting to ramp up.  But a drop in prices is the last thing that we need right now.

Company owners have numerous expense items to worry about.  Fuel has obviously jumped significantly in the past 12 months.  Buying a truck is more expensive.  Truck rental costs are rising significantly right now for 2023.  Prices for parts are higher, and maintenance/repair costs are way up.  For companies that have a Business Line of Credit or Payroll Credit Facility, interest rates are now double what they were six months ago.  Employer contributions on CPP and EI are also increasing, by 4.38% and 5.56% respectively (which of course is compounded if labour costs are increasing).

Food costs are much higher than a year ago.  The kitchen team from my camp did a comparison study of invoice prices from GFS for 2022 vs. 2021, using a basket of approximately thirty commonly purchased items, and the average price increase was 35.5%.  That’s stunning.  The only people that benefit from this are planters who work out of camp-based operations with kitchens, because they are shielded from these food cost increases (except when buying their own food in town on days off).  But these higher food costs are certainly hurting the companies that run camps.

There may be significant other challenges that companies have to navigate.  I’m a bit out-of-the-loop on this right now, but there were rumours of enhanced requirements for on-site dressing stations in 2023, and also for more ETV’s spread throughout the workforce.  Having more first aid gear available is unquestionably a benefit for workers.  But who is going to pay for this?  The workers?  If company owners don’t recognize and budget for these potential costs, and bid accordingly, that’s exactly what might happen.

Commercial regs for flight crew fatigue are changing for small operators in mid-December (large operators had to implement these same changes 24 months earlier).  Although the exact rules are quite complex, a general starting point is that the maximum length of a pilot’s "duty day" is being cut from 14 hours to roughly 12 hours per day (the exact length will vary based on certain criteria).  This means that if a pilot arrives at the hanger to start pre-flight planning at 5am, they have to be home with the machine parked and flight plans closed by 5pm, which of course means that they will have to leave the field worksite earlier than most of us are accustomed to.  The maximum hours of daily "flight hours" is also being cut, to 8 hours per day, although this won’t have significant impact since the machine isn't usually running that many hours in a day (except maybe up in High Level).  However, the minimum length for the "rest period" from night to morning is being raised from 10 hours to 12 hours.  It thus becomes essentially impossible for a pilot to fly trees out to stock up a block in the evening, then to return early the next morning to move crews. 

Going back to the length of duty day, the 12 hour day is a best-case scenario.  The exact regs are very complex, and depend on things such as the number of flights per day (that's the number of start/stop cycles of the machine's engine, not take-offs and landings).  The duty day length will also depend on the start time in the morning.  When a pilot starts especially early in the morning, their duty day becomes shorter.  So for example, a pilot doing seven or fewer flights in a single duty day, whose flight cycles are typically between 30 and 50 minutes duration, can only have 11 hours for duty day if they start at 5:59am or earlier.  Let's say that you need a pilot on site at 7am to start slinging trees before the planters arrive, but the ferry time from the airfield to Staging is 1hr.  The pilot will need to start their duty day with the pre-flight inspection and filing of flight plan no later than 5:30am in order to get in the air by 6am, and even that is optimistic because most rotary wing operators will budget a full hour from start time to being airborne.  Because the official start of the duty day is earlier than 6am, the pilot is now only allowed to have a duty day length of 11 hours.  So that could mean that the duty day runs from 5:30am to 4:30pm.  But since the pilot needs an hour of ferry time after planting to get back to the airport, AND time for post-flight and closing the flight plan, they really need to start flying home at 3pm.  Which means that planters might need to fly out of the block starting at 2:15pm.

One solution would be to run two pilots with each machine, to give planters a longer day, but helicopter companies would be reluctant to do this because it would double their labour costs.  Machine costs would also increase significantly if a helicopter needed to return to the airfield mid-day for a crew swap.  And on top of that, the industry doesn't have enough high-hour qualified pilots to make that scenario to work on a broad basis.

There are slight variations and allowances to these changes for certain situations, and a commercial pilot will have a better understanding.  Some details are available here, but again, the CARS regs are very complex.  The bottom line is that these changes will probably impact almost all planting operations that use helicopters extensively, so Project Managers need to contact their preferred helicopter providers and get a full understanding of these potential changes, before putting together any more heli budgets.  Helicopter use may become increasingly associated with constrained production.

There is also a good chance that minimum wage will jump significantly before next summer.  That’s great for workers in many underpaid industries.  It’s also good for tree planters, because companies that hire first-time workers must pay everyone at least the equivalent of minimum wage (including overtime) if their piece-rate earnings are not sufficient.  Will companies that hire large numbers of first-time planters have the foresight to plan for this possibility, and adjust bid prices upward?  A rising tide floats all boats.

Let’s go back to the lower industry volumes.  Can anything be done about this?  A few years ago, we thought that volumes would be historically strong for the next several years.  Part of that was based on the assumption of strong growth of federal tree planting projects, from programs such as the federal “2 Billion Trees” initiative.  But the 2BT program is struggling to scale up quickly, which isn’t a real surprise.  I’m quite familiar with the program, having acted as a project lead proponent for small projects both this year and last year, but my work (on the east coast) has been with very small numbers of seedlings.  For 2BT to work, big players need to design projects that will result in tens of millions of trees being planted, and there are a lot of challenges associated with designing such a project (especially in figuring out where to plant the trees).

In a perfect world, several of the dozen largest planting contractors would each purposefully plan to scale back operations in 2023 by retiring a camp.  I know of at least one major contractor that has already made a conscious decision to do exactly that.  If several companies planned to downsize this way, there would be less concern about the limited number of trees that are available for 2023.  But wait, why should we expect just the biggest companies to save the day?  If every company (regardless of size) downsized by just 8.3%, then the overall 2023 volume would be appropriate for the slightly smaller planting industry.  In such a scenario, supply-based downward pricing pressure would disappear, and bid prices would undoubtedly jump significantly.  Company owners AND their workforces would benefit.  Our industry is nimble enough to do this, but do company owners have the resolve?  Again, it’s the company owners that are hurting themselves if they don’t understand the need for every company to scale back slightly.

Planters expect wages to increase in 2023.  They know that wages are increasing in just about every other sector, and they know that workers are scarce.  What will happen if bid prices decline this fall, and owners have to tell planters after Christmas that planter prices are staying the same?  How many planters will seek employment elsewhere?  Will planting companies be able to hire enough people to get through 2023?  A lot of companies struggled to get their trees planted last year due to hiring challenges, and million of “spring” trees didn’t get planted until July.  Hiring will likely be even harder this year, considering the general labour market situation, so why risk chasing too many trees?  It’s better for companies to aim to scale back.

What else can planters (and companies) expect from 2023?  Well, from what I’ve seen so far, there are a few challenges to look forward to:

-        Head Protection:  WorkSafe has mandated the use of head protection on ALL understory planting in BC from now on.  While a hardhat may not protect you if an entire tree falls onto you, it could make a difference if you get hit by a dead branch.  Of course, hard hats bring their own separate problems, and planters hate wearing them.  Incidentally, we’re also seeing an increase in expectations for due diligence with more detailed DTA assessments.

-        Wildfire Planting:  There has been a LOT of wildfire restoration work in BC in the past four years.  Probably more than twenty companies have worked in the Elephant Hill fire alone since 2018.  Planting continues there, but so does grass encroachment.  As the grass spreads each year, the difficulty increases.

-        Plastic Ribbon:  The Cariboo-Chilcotin region (ranchland) banned the dropping of plastic flagger this past year, to protect cattle from eating plastic.  The full impact of this change was not felt in 2022, as a lot of multi-year contracts were still in progress.  But several multi-year contracts just ended, and the flagger ban throughout this region will be more ubiquitous in 2023.  Couple this with thicker grass in the burns, and we’re going to see a lot of double plants in 2023.  The industry MUST find a cost-effective supply of biodegradable ribbon soon, or loosen up spacing rules.  There are now a limited number of 500' rolls of corn starch ribbon available from Motion for $2.87 per roll, which is approximately three times the cost of polyethylene plastic flagger.  But if everyone bidding on no-flagger contracts were to add another 1.0 cents per tree to their bid price, that would be enough to purchase one roll of biodegradable flagger for roughly every one box of trees planted.  Bidders can pass the cost of this product on to clients!  We just need to make sure that every bidder factors that cost into their bid prices.  Easier said than done, of course.  Also, that price might eventually come down some, if the industry starts buying the corn starch product in large quantities.

-        Unwrapped Trees:  Again on the theme of saving plastic, more planters may see boxes being shipped this year without bundle wrappers.  It’s a great concept.  Single-use plastic is no good for anyone.  If western Canada plants 400 million trees per year including the prairies, that’s probably 30 million bundle wrappers per year that end up in landfills and occasionally scattered across blocks.  And aside from the plastic, if it takes 5 seconds to unwrap each bundle, that’s costing planters 2.5 million minutes each year.  I’m all for reducing plastic, and I’m quite familiar with planting trays of unwrapped trees on the east coast.  But when planters have to share boxes and each person has to do a count of their share of the box, unwrapped trees become a challenge.  We've also discovered that some nursery packing crews can’t count, resulting in boxes that don't have the correct number of seedlings in them.  When boxes are overfilled, it hurts the nursery, it hurts the planters, and it indirectly hurts the planting companies.  Nobody benefits except the Clients, who get free trees.  Nurseries that are moving in this direction need to implement working quality control systems BEFORE unwrapped trees become more widespread.  Perhaps it would help to tie the bundles with twine?  Or even better, wrap them in a band of light kraft paper or wax paper with a small piece of masking tape to seal the wrapper.  That would continue to protect the plugs better than a box of loose trees, which the forestry clients would prefer.  And it would allow for better monitoring of counts (both on the planter side and the nursery side), while still eliminating plastic wrappers.

-        Vehicle Safety:  I'll cautiously comment that vehicle safety seems to be improving slightly throughout the industry in the past few years.  Yes, I'm aware of some exceptions, and some accidents.  But we're generally seeing more common sense.  I have to give a shout out to ABBA here.  My crews meet a lot of other companies on the road, and this year, ABBA wins my award for the most professional radio use and cautious driving, at least when we worked in the same area back in April/May.  There seems to more of a safety-driven impetus from some Clients recently, a few of whom are asking for GPS trackers and/or dash cams (audio off) in their contractors' vehicles.  These devices probably make some people drive more cautiously, which is good.  A side note:  For anyone working in the Sparks wildfire area in 2023, be careful.  Some of those roads are going to be pretty sketchy when they're wet.

-        Access:  I’ll focus again on the regions where wildfire planting has been happening for the past few years.  It’s safe to say that in those regions, the low-hanging fruit has been plucked.  Each year, the blocks become more difficult to access.  Helicopter work is becoming more common.  And that brings up a good point.  What happens if someone gets hurt on a block where it’s impossible to extract a seriously injured patient without a helicopter?  Do companies have helicopters on standby for emergency situations such as this?  This is a good time to put in a plug for the services of the TEAAM helicopter recovery service for remote workers.

In terms of fire activity, as of October 17th there were still 202 active wildfires burning in BC.  That's crazy.  I've never seen so much active smoke during a Viewing Season.  Many of these fires will impact our industry in 2024 and beyond.

This year’s Viewing Season is really just getting under way in earnest in the past two weeks, and companies are on the edge of their seat about what will happen.  Will we see lower prices, due to decreased industry volumes?  Will we see higher prices, due to a recognition of how inflation is significantly affecting the cost of running a company?  We’re in the middle of an economic tug-of-war.  Now you see why I started off with the phrase, “Conflicting economic data.”  If company owners are smart, most of them will downsize slightly.  If that happens, bid prices will increase this year DESPITE the lower industry volumes, and companies will be able to react appropriately to general wage and inflation trends.

Considering what we had to deal with for the last three years, it seems crazy to say that 2023 may be the most challenging year that the industry has seen in decades.  But this time, the challenge will be economic rather than a global health pandemic.  Let’s hope, in the coming weeks, that company owners will bid appropriately …

 

Jonathan “Scooter” Clark 

www.replant.ca

 

Comment, December 15th - Many companies chased volume, and bid prices are down overall (sometimes significantly) from the levels of two years ago.  I'll put together a full report by the time the WFCA Conference happens at the end of January, and I'll link that here.

 

 

 

Links to Previous "State Of The Industry" Posts:

Fall 2021:  https://jonathan-scooter-clark.blogspot.com/2021/10/state-of-industry-fall-2021-bc-tree.html

Spring 2021:  https://jonathan-scooter-clark.blogspot.com/2021/04/state-of-industry-2021.html

Fall 2019:  https://jonathan-scooter-clark.blogspot.com/2019/09/state-of-industry-2019-bc-tree-planting.html

Fall 2018:  https://jonathan-scooter-clark.blogspot.com/2018/09/state-of-industry-british-columbia-tree.html

 

State of the Industry (2018): British Columbia Tree Planting

I believe that the reforestation industry in BC, and particularly the tree-planting side of the industry, is currently approaching an important historical point.  I'd be hesitant to call it a crossroads, but I'm not sure what I actually could call it.  Let me try to explain.

Tree planters are almost always paid on a piece-rate basis, ie. varying rates per tree planted.  The more trees they plant, the more money they earn.  Unfortunately, the industry has been under severe pricing pressure over the past decade.  Right now, in a lot of segments of the industry, especially in northern BC and Alberta, prices are equal to or lower than they were in 2006/2007.  That's a terrible situation, since inflation has eroded our purchasing power over the years.

According to one website that I looked at, inflation from 2006 to 2018 (measured by the CPI) has increased by approximately 21.85% overall.  This means that if earnings have remained stagnant during the same period, the "value" of the money that planters have earned has decreased by more than 20% during these twelve years.  Interestingly, according to another website I looked at, average wages in Canada (across all industries) have increased by approximately 24% during the same time period.  That data was based on all industries nationally, and is supported by minimum wage increases in all provinces during that time period.

I'm not sure if my understanding about why this has happened is completely valid, but I can think of some possible or probable reasons:

- The economic downturn of late 2007 and 2008 (the Great Recession) did tremendous damage to the planting industry.  Prices in the 2007 season, when viewed in a historical context, were great.  But then, in many areas, prices dropped by 15-30% from 2007 to 2009.  There was a slight recovery (in my personal experience) starting in 2011, but never to the previous levels.

- If I remember correctly, I believe that industry volumes dropped from 2006 to 2007, immediately before the Great Recession.  This meant that industry participants were chasing lower volumes.

- There was an oversupply of labour at the time, and too many companies were competing for a limited volume of work (many companies had expanded their operations from 2003-2007).

All of the above is my personal understanding of the state of the industry at that time, but there is probably a lot more to the picture than what I've explained.  As I mentioned, my understanding may not be 100% accurate.


Let's look ahead now.  For planters, I believe that there is a "perfect storm" coming.  Here are some reasons:

1.  Less and less people are interested in pursuing summer jobs as tree planters.  Do I have any hard empirical evidence of this?  No.  However, I do have anecdotal evidence.  The number of job applications that were received in 2018 by a number of owners/senior management at various planting companies dropped to about one third of 2017 levels.  This is a staggering decline, and it is noteworthy that it seemed to happen at several large companies.

2.  The attrition rates during the 2018 season seemed to be high for the industry as a whole.  Now to be honest, the attrition rate in my own camp (the only area where I am 100% confident about the data I'm examining) was low, which contradicts this point.  However, I heard rumours from a large number of planters about high dropout rates at many large planting companies.  We also saw a very significant number of mid-season and late-season "still hiring" ads on Facebook and other forms of social media, which would seem to confirm either that attrition rates during the season WERE high, OR that companies went into the season understaffed.

3.  The industry is projected to need to plant a "historically strong" number of trees again in 2019, and then in 2020, even greater volumes (record-breaking numbers).  Some of this is due to the record-breaking wildfire year in 2017, and it's pretty obvious that this year's wildfires (which eclipsed even 2017 damage) will make things even worse.

Source:  https://wfca.ca/2018/06/western-forestry-contractors-association-rumour-mill-roundupdate-volume-18-issue-08/


In general economic terms, when labour is in diminishing supply, and demand for that labour is increasing, prices need to increase in order to address the situation.  However, the big question is this:  Will contractors (planting companies) recognize and accept this?  Or is the industry too short-sighted and competitive to allow worker prices to rise?

Complicating the issue is the fact that companies are facing increasing costs in many areas, not just in their labour expense.  For example:

- Fuel prices are significantly higher now than they were up to 2006 (with the exception of post-Katrina fuel pricing surges).  In fact, in the past twelve months alone, average fuel prices have increased by over 20%.  Vehicles and transportation costs are the second-largest expense for planting companies, after labour.

- WorkSafe contribution costs have gone up significantly over the past decade.  Even companies with good individual ratings/discounts are affected initially by the industry-wide rate.

- There is a new Employer Health Tax in BC which is scheduled to come into effect on January 1st, 2019.  This will increase payroll costs, even though it is the companies rather than the employees that will be paying this to the BC government.

- The price of most goods and services (pretty much everything else that planting companies have to spend money on, ie. everything from costs of flagging tape to mechanics' labour rates to truck rentals, etc.) has gone up 20% or more in the past decade.

- Although tuition is not something that every planter needs to budget for, and tuition increases may not be as noticeable for long term planters who only go to school for a handful of years during their planting career, the fact remains that tuition fees have increased very significantly over the past decade (fee increases averaged forty percent from 2006 to 2016).

- And most importantly, minimum wage rates are rising across Canada.  Rapidly.  When minimum wage was under $10/hr, the "differential" between minimum wage and making say $17/hr in a planting camp was enough to convince some people that the hardships of planting were worth the extra earnings.  If minimum wage is $15/hr, why would someone want to make only $2/hr more as a planter, when they could instead work a much less demanding job in the city?  Note:  That $17/hr is a random number, but it has some validity, as a survey by the WFCA a year or two ago seemed to indicate that respondents earned approximately that much, industry wide.  And incidentally, that's a terrible hourly wage for the work required, and considering the fact that planting slowly tears your body apart.

On the note of minimum wage, Ontario's minimum wage increased to $14.00/hr in 2018, and increases to $15.00/hr in 2019.  The jump in early 2018 was a huge jump from 2017 levels (which had been $11.40/hr).  Normally, BC planting companies hire a large number of people from Ontario, and I believe that the increases to minimum wage in Ontario are part of the reason why so many companies have been quietly talking about the huge drop in applications this past season.


I look at the current situation as being akin to a frog in a boiling pot of water.  If you were to put a frog into a boiling pot of water, it would try to escape immediately (not that I would do this to a frog).  However, if you put that same frog in a pot of water that is at a normal temperature, and then increase the temperature slowly, the frog doesn't realize that it's slowly getting boiled alive.  It doesn't realize the danger that it's in.  Planters (and planting companies) have been suffering more and more with each passing year, and unfortunately, nobody has been bold enough to scream "enough is enough!"


My hope is that this year, ALL planting contractors realize that there is more work available in 2019 than can be done with the existing labour supply, and they can and should bid higher on all contracts.  Much higher.  If they don't happen to win a particular contract, who cares?  There is almost certainly more work than the industry can handle, and if contractors are patient, work will eventually come to them at favorable prices.


How much do prices need to rise right now?  In my opinion, almost twenty percent.  Will that happen?  Probably not, but it could happen if contractors are disciplined during the upcoming viewing/bidding season (which runs over the next two months).


To be clear, even if bid prices did rise by 20% this fall, planters would still not see that same increase in their wages.  Companies need to be able to cover their increased WorkSafe premiums and EHT taxes and everything else, and if they don't, they'll go out of business.  But it's safe to say that at least part of the bid price increases can be [and need to be] passed along to planters.  Without adequate workforces, companies will fail.  I've already heard of numerous examples of inability to complete projects in 2018.  I've even been to a landfill that was literally green with tree bundles, where one planting company (whom I will leave unnamed) was unable to finish a project and the forester had to pull the plug and destroy hundreds of thousands of seedlings.  This was not a unique situation.  And the problem may be much worse next year, unless there is a greater financial incentive for people to accept planting jobs, and less reason for them to quit part-way through the season.

I talked to about a dozen forest nurseries this year, and the consistent story was that 98% of contractors were delaying tree deliveries, because they didn't have the workforce to complete their work according to projected timelines.  Most companies blamed the late snow melt for this problem, but the truth is that the melt was only part of the problem, and simply a convenient excuse for some companies.  If any foresters don't believe me, try calling several nurseries for verification.

In addition to increasing planter prices, higher bid prices could be used by companies to "do things right."  Many contractors, large or small, are cutting corners in various ways.  Some of these are minor penny-pinching, but in other cases, contractors are blatantly contravening various government regulations and employment standards.  Just think, if you're a large contractor that is NOT currently paying minimum wage top-up properly to your new workers, higher bid prices this year could offer you an opportunity to fix that deficiency.  There are certain benefits to compliance, other than no longer having to hope that your rookies don't file employment standards complaints against you.

To be more explicit, let me tell you something that some of you may not realize.  Companies in BC are required to top workers up to minimum wage, if they don't earn the equivalent of minimum wage through their piece-rate earnings.  Even though paying minimum wage top-up properly can be quite costly for a company, it should be thought of as an investment in your people, not as an expense.

My own camp has paid a tremendous amount of top-up some years, often exceeding $20,000 in a single season.  And do you know what?  I've also had only four first-year planters quit out of the 52 that I've hired over the past four seasons (2015-2018 inclusive).  So for any of you discount contractors out there that had problems finishing contracts this year because lots of people quit, you should think carefully about this.  Would you rather pay $20,000 to $30,000 in top-up in May, or lose out on much more than that because you were defeated in August and weren't able to complete work that you had committed to?  My thirteen first-year planters this season planted an average of 94,818 trees apiece, for a total of 1.23m trees (out of the 6.50m trees that my full camp planted during the regular season).  And every one of them got paid some top-up at the start of the season, sometimes significant amounts.  Yet without them, our camp wouldn't have been able to accept and plant the extra three-quarters of a million trees that were offered to us by other contractors who were behind schedule.  The minimum wage top-up subsidization, when paid properly and legally, allows a company to slash attrition rates of first-year planters to a fraction of what the dropout rate would be without top-ups.  But some BC planting contractors continue to break that rule to this day, because "the bid prices are too low to be able to afford to pay top-up."  Part of the reason for the low attrition rates and high production of my first-year planters is also attributable to the training regimen that I put them through, based on the information in Step By Step.


I should clarify that there is some variation between geographic regions throughout BC.  My understanding is that the small companies in the southern Interior, and some of the coastal companies, were not hit as hard by the Great Recession as the larger companies operating north of Merritt and Kamloops.  Also, in some cases, smaller companies have been somewhat insulated from bids where "the lowest price was the law" by virtue of their skilled workforces, and by working for foresters who understood the value of good workmanship.  Of course, when you pay and treat your workers well, your year-to-year retention levels are much higher, and your company benefits.


The funny thing about this whole situation is the question of who ultimately gets hurt if prices don't go up significantly.  Is it the planters?  Nope.  They'll just quit and move on to other jobs/careers/vocations.  The majority of the tree planting workforce is only in the industry for 1-4 years, then they move on to a new chapter in their life.  The people who are always left behind to deal with the long-term financial pressures are the company owners.  The owners are the ones who are ultimately going to be hurt the most if the industry situation doesn't change.  And they are the only ones who can effect a change, by exercising discipline when putting bids together this year.

For a lot of company owners, their entire life has been invested into their company.  I mean this on many levels, including their time, financial, and emotional commitments.  Blood, sweat, and tears.  Many of these owners are in a position where they are hoping to sell or retire within the next five years.  But who will want to buy a planting company if the planting industry can't recruit workers, or if the company is losing money?  For many of these owners, their company IS their retirement nest egg, and this becomes a do-or-die financial situation.  Even if planters don't understand or don't care about the long-term financial health of the planting industry, the owners must.

Some of the blame for current pricing levels can probably be blamed upon full-time upper-level management at the large companies, rather than upon the owners.  If there isn't enough work, they may lose their jobs.  Some of the people in these positions realize that their company needs a certain amount of work to be able to keep them on the payroll.  They may pull the wool over the eyes of owners on some bids.  Shame, shame.

Today's workforce is very different from the workforce of a decade ago.  They are connected.  There has never been as much shared information between planters of different companies as there is today, thanks to social media.  Information is empowerment.  All BC government bids are public information, paid for by the taxpayers.  This information gets published and shared widely (not just on BC Bid and Replant.ca).  Any individual companies that bid low on 2019 contracts will be judged in the court of public opinion, and the information will be re-shared on social media during the spring recruitment season.


Some people believe that there is a dichotomy between tree planters and company owners.  They believe that when one side gains, the other side necessarily loses.  I don't believe that this is the case.  I believe that this is a very symbiotic industry.  When planters do well, it is good for the companies they work for.


So I'll end this post with a message to any company owners who are reading this: It's time for you to stop "sharpening the pencils" and trying to cut corners on bid prices.  It's time for you to think about the long-term health of your work force, and the long-term financial health of your company.  Both of these things can improve in tandem if everyone exercises discipline while bidding this year.  You need to submit bids for what the jobs should truly be valued at, not for the lowest amount you can suffer through.  The ball is in your court...


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If you'd like to see results of public tree planting bids for 2019 contracts in BC, here's a link:
www.replant.ca/publicbids


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Late edit:  There are a few subjects that I didn't really cover in this post, which I should have talked about:

- Nursery Capacity:  The western Canadian forest nurseries have the capacity to increase production slightly for 2020, and they already had a bit of spare capacity for 2018.  But is it enough to meet demand?

- Direct Award Contracts:  If low-bid contracts do happen to increase in value this fall, AND the industry has more work than it can easily handle, then which contracts will be dropped?  There's a good chance that low-priced direct award work will be the first to dropped, as planting contractors no longer need the security blanket of guaranteed work.  Some foresters at private mills may need to prepare themselves for requests for pricing adjustments.  Some contractors may soon be in a position to be able to walk away from low-margin work.