State Of The Industry - Fall 2024 / Winter 2025

Another planting season is essentially over.  For me, the 2024 season reinforced three universal truths:

1.      Nothing is certain in life except death and taxes.

2.      Never get involved in a land war in Asia.

3.      The tree price can never be high enough in Fort St John.

Looking ahead to 2025, here are some thoughts that I have on topics that may be of interest to planters.

 

Planting Volumes & Pricing

Across Canada, it seems that tree planting totals will continue to rise in 2025.  The 2 Billion Tree program continues to grow, as expected, although the vast majority of national planting volume is still very much tied to harvesting activity.

British Columbia is a provincial exception to the growth curve.  Volumes in BC are expected to drop next year, allegedly from 291 million to 233 million trees (a drop of 58 million trees or twenty percent).  In theory, you’d think that this would lead to a supply and demand imbalance, which would then result in lower bid prices for next year’s contracts.  In practice, we’re not seeing any consistent trend of that sort, at least not so far.  Planting company owners and bidding personnel are dealing with significant cost pressures, and don’t have much flexibility to bid aggressively.

The big question that’s always on planters’ minds is what direction tree prices are moving in.  My guess is that in 2025, they’ll remain almost exactly the same as in 2024.  There are two opposing forces at play here ... supply reductions versus labour force reliability.  It’s very unlikely that planters will see any broad price increases in BC, due to the expected drop in volume.  At the same time, companies will be reluctant to drop planter prices, because planters might try to jump to other companies.

Companies are in a difficult position.  They need to maintain planter prices, despite other rising costs and despite a potential slight drop in bid prices at the company level.  Experienced planters are more valuable than new workers, and companies don't want planters to retire and move out of the industry to other careers.  To be honest, if our industry can maintain planter prices at status quo going into 2025, we’ll be luckier than other forestry sectors that are dealing with massive job cuts.  The planting workforce in BC will certainly be smaller in 2025, but it’s easy for our industry to downsize quickly since we have so much turnover every year.  Several of the larger companies will probably consider downsizing by a full camp, which is usually pretty easy to do, and which strengthens the remaining camps.

 

Retiring Owners

In past years, I sometimes referred to the Big 14 planting companies in BC:  Apex, Blue Collar, Brinkman, Celtic, Coast Range, Dynamic, Folklore, NATA, NGR, Rhino, Seneca, Spectrum, Summit, and Windfirm.  While this group doesn’t include all of the largest companies (it omits companies such as Zanzibar), I tended to cluster this group together because they probably account for nearly 90% of the hiring of first-time inexperienced planters.

Until recently, it had been a long while since any of the biggest planting companies ceased operations, with the two most notable examples in the past 25 years probably being SilvaRam (2005) and Nechako (2010).  However, Celtic shuttered their planting operations last year (although that company still does other forestry work at a smaller scale).  At least two other mid-sized companies also ceased operations going into the 2024 season (Little Smokey & Nature's Treasures).

For 2025, I’m aware of two more companies from that big group which will not be planting anymore (although one of the two may rebuild as a smaller operation with a different name).  In addition, another well-known smaller company is apparently done.

What does all of this recent turnover mean?  Is it significant that six companies have shut down in the past 18 months?  It feels to me that this is the market sending a signal that running a planting company just may not be worth it.  On a positive note, the timing of this contraction matches well with the current decrease in volumes.  Convenient.  Keep in mind however, some other small companies have sprung up in the past two years, which will partially offset the reduction in the size of the industry.

 

Forestry Outlook in BC

It’s not just the planting industry that is contracting.  There have been major upsets in mills throughout BC.  Twenty years ago, there were slightly over a hundred operational mills throughout the province.  The count is now down to just barely over half that number.

Canfor has been hit especially hard.  After closing four mills in 2023, they recently announced the closures of their sawmills in Vanderhoof and Fort St. John.  Canfor has now closed ten of their thirteen BC mills over the past several years.

Province-wide, mills are cutting a lot less.  This is due to a slew of reasons, including fallout from a few decades of mountain pine beetle and other insect damage, several recent bad wildfire seasons, and also due to the remaining “good wood” being further and further from mills (which of course increases hauling and other costs).  Lack of access to economic fibre is a big problem.  It shouldn’t come as a surprise, in light of all these recent mill curtailments and the accompanying downtrend in harvesting, that planting volumes will also drop.

What will this do to the composition of the planting workforce?  As long as tree prices don’t decrease, the industry should see a "normal" return rate of experienced planters in 2025.  If this is the case, but we also consider the likelihood that the number of trees being planted will drop, we can deduce that there should be fewer seats available.  This reduction will affect inexperienced applicants, not planters with previous planting experience.

I suspect that the number of “rookies” hired will drop significantly in 2025 compared to 2024.  Companies will have the luxury of being more selective about whom they hire.  International applicants will have a much harder time finding planting jobs, because it will be easier for companies to fill positions with promising Canadian applicants.  Most companies prefer to hire Canadians, because they want employees who might still around for 3-5 seasons, and that’s not possible for a lot of the international applicants due to visa restrictions.  If you're a rookie who is interested in becoming a planter in BC this year, the application process is going to be a lot more competitive than during the past few years.

Recent Elections

The BC election was not resolved quickly.  Ultimately, a number of seats were decided by only a few hundred votes each.  The NDP government won 47 seats, the bare minimum needed for a majority, although this wasn’t certain until several days after the election.  The Green Party wound up with two seats.  It initially appeared that the Greens would be able to decide who would form a coalition government, until the NDP got the last seat they needed during the recounts a week after election night.  But that doesn’t mean that the NDP party can govern unchecked.  If they lose a single MLA, either in a by-election or due to a defection, they will need to turn to the Green Party to maintain power.  Any NDP MLA could switch parties to the Greens right now, and force a coalition government.  That would give that particular MLA and the other two Green MLA's outsized influence.  It will be a precarious political situation for the next few years.  On a positive note for tree planters, the NDP alluded to supporting the planting of 300 million trees per year if elected.  If any readers happen to know any of the NDP (or Green) MLA’s, reach out to them and remind them that you want their support for more planting in BC.

Looking south, the US elections were a bit of a surprise/shock to some.  With Trump coming back into power soon, the most obvious likely result will be inflation due to the fiscal policies Republicans are expected to follow.  Trump also mentioned "protecting Americans" with tariffs.  If he moves ahead with that plan, there is a good chance that tariffs would increase on Canadian lumber.  That would have a disproportionate negative impact on forestry in BC in particular.  When BC’s forestry sector is unhealthy, the reforestation sector is obviously also affected.  Between tariffs and inflation, we could eventually see less harvesting (which results in lower planting volumes), and higher prices on things like trucks and vehicle parts.  Thankfully, it will probably be at least 18 months before any inflationary increases or spin-offs from lumber tariffs impact the planting industry, so that’s more of a worry for 2026 than for 2025.

 

Safety & First Aid

WorkSafe has introduced sweeping new first aid requirements for remote forestry workers in BC.  These requirements came into effect on November 1^st.  I’ll provide a link where you can learn about this in more detail, but the basic situation is that the industry will need more first aiders.  Course names and content have also been modified.  Existing first aid certificates will remain valid until their intended expiry dates, but planters renewing tickets will see some changes in their courses.

In addition to probably needing significantly more ticketed first aid attendants, there have been updates to required contents for first aid kits and dressing stations, and to hazard ratings for various worksites.  You can find more info here:

https://www.replant.ca/docs/Nov_2024_First_Aid_Backgrounder.pdf

ETV’s are also under fire right now.  There are approximately six different types of ETV’s in use at planting companies throughout the province.  You can find everything from MTC’s to crummies to suburbans with fold-down seats, and the silver aluminum worker transport units that fit into the back of open-back pickups.  Unfortunately, WorkSafe has basically identified potential problems with every single type of unit that is currently in use at planting companies.  This is a situation which is evolving right now, but it could result in significant additional costs this winter/spring for many companies, large or small.

 

Total Physio

This company, based out of Houston BC, is well known to many planters.  A large number of planting companies hire Total Physio to provide various services and resources to their planters.  Total Physio’s library of taping resources is now up to 44 subjects, and growing.  Great stuff.

 

Alternatives to ATV’s

There’s been a lot of talk about situations where road access has been reclaimed, making the use of ATV's very dangerous.  What about using dirt bikes or electric fat bikes?  A drawback is stability safety, and another drawback is that they can basically only permit a tree runner to move one box at a time.  However, bikes can travel into some areas that a quad can’t access.  I once had an entire crew that used mountain bikes to get to their blocks on one of my contracts.  Think outside the box.  I’m going to be using e-bikes to plant a reclaimed road project in Nova Scotia this week.  Check out my Instagram account in a few days to see the fun:  www.instagram.com/replant.ca

 

Bid Results

I normally track all public bid results for BC planting contracts on the Replant.ca forums.  Some of you have noticed that I’m running late this year.  There have been more than half a dozen jobs that have opened already, so mea culpa.  However, I now measure my to-do list in years rather than pages, and I’ve been busy non-stop since the spring.  I promise that I'll get around to summarizing and posting everything shortly.

To be fair, this year’s viewing and bidding season is running very late, perhaps close to a month later than normal.  There will be a slew of contracts opening in the next three weeks (mid- to late November).  As I said, I'll get around to analyzing and sharing everything soon.

Thanks for reading ...

- Scooter

 

 

Links to Previous "State Of The Industry" Posts:

Early 2024:  https://jonathan-scooter-clark.blogspot.com/2024/01/state-of-industry-winter-2024.html

Fall 2022:  https://jonathan-scooter-clark.blogspot.com/2022/10/state-of-industry-fall-2022-tree.html

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, Early 2024

Where do I begin?  The last twelve months have been tumultuous.  We’ve had record-breaking wildfire seasons in BC and Alberta, inflationary pressures, and a provincial government in BC that is eliminating the use of bundle wrappers on more than fifty million trees.  All of these changes were obvious in retrospect, yet they have surprised us nonetheless.

 

Wildfires

The 2023 wildfire season radically changed the landscape in both BC and Alberta.  We were shocked in 2017 and 2018 by record-breaking wildfires that burned slightly over a million hectares each year.  In the years since, the industry has been busy trying to help repair the damage.  However, in 2023, nearly FIVE million hectares burned in BC and Alberta combined.  That amount of ground, if replanted at 2000 stems/Ha, would represent more trees than BC has planted in known history.  It seems unlikely that tree planters will be able to replant even a tenth of the ground that burned last year (assuming that funding became available for that type of effort).

One thing that I noticed while looking at burned ground in many parts of both provinces during the Fall viewing season was that a lot of the Alberta fires, and fires in northeastern BC, appear to have burned cold (or burned quickly).  Unlike the characteristic hot burns that we saw in the Elephant Hills fire from 2017, or a myriad of other hot fires throughout southern BC, the Alberta and northeast BC fires often didn’t completely destroy the ecosystem.  The grass was often burned away, but I also saw many wildfire sites in plantations and forests where a lot of grass or light vegetation survived.  My casual observations were not sufficiently detailed or diverse to validate any sort of reliable dataset.  However, my gut feeling is that a lot of the burns in Alberta and northern BC may be more challenging to work through than the scorched earth of southern BC.  We’ll know in a few months.

 

Eliminating Single Use Plastics

Plastic flagging tape has been banned in some regions for a few years now, especially in areas where cattle grazing leases exist.  Thankfully, these eventual bans were phased in over a period of a few years.  Initially, we were expected to use shorter piece of flagger.  After a couple years, the Cariboo-Chilcotin district banned polyethylene flagger for all BCTS contracts.  The ban on plastic flagger continues to broaden.  Unfortunately, the industry still doesn’t have a viable alternative to plastic.  Biodegradable flagger is still far too expensive, and in some cases, even biodegradable flagger is banned.

Tree chalk has been a good alternative to plastic flagger in certain circumstances.  However, at least one provincial district is concerned about the damage that this product does to the seedlings, and has banned the use of chalk.  That prohibition may also spread in the future.

Moving beyond flagging tape, the next two targets for elimination will be bundle wrappers and tree box liners.  The BC government, after several years of inaction by the industry, has taken an unexpected lead on forcing change upon the industry.  Allegedly, all of the trees being planted on all 2024 BCTS and MOF jobs throughout the province will come in boxes with no bundle wrappers.  Chaos!  Well, I admit that this decision will be good for the environment.  But at what financial cost?  Loose trees will be problematic in terms of box splits and partials, and inventory management will become more challenging both for planters and management.  During the Fall viewing season, all cries of despair by contractors were met with impassioned disdain by the government.  No pricing flexibility was given for existing long-term contracts, so a lot of option-to-renew contracts were suddenly dropped rather than renewed.

Let’s temporarily ignore the hit to production and subsequent increase in planting costs relating to unbundled trees.  That’s a problem for company owners and not for myself, so let’s think about other impacts.  The success of any plantation depends partly upon stockhandling.  I still scratch my head wondering how anyone could have ever thought that this sudden tectonic shift in packaging and processing could be good for the trees.  Granted, we plant tens of millions of unbundled seedlings on the east coast each year, and most of them seem to survive.  But there’s one key difference that I don’t think anyone in government considered … east coast seedlings [in full-size trays] are grown as "pods," not as plug stock.  Pods are enclosed in a tight mesh membrane to keep the rooting medium and seedling roots protected.  Plugs in western Canada have no such protection.  Last year, many BCTS and MOF contracts included requirements such as “don’t unwrap more than a bundle at a time, because it’s bad for the trees.”  This year, in a complete reversal of the previous mentality, we’ll be given giant bags of loose seedlings.  I assume that we’ll see a huge increase in culled trees, and a parallel increase in plantation mortality.  It makes a planter wonder.  But I guess the government can pay us to plant all the blocks again in three years, when they get identified as insufficiently stocked and need to be fill planted.  Please forgive my cynicism.

To top things off, I saw a photo this Fall showing an unbundled box being packaged.  There were no bundle wrappers, because single-use plastics are bad.  Yet the nursery was still using a plastic bag as a box liner, instead of a paper liner.  Does this mean that single-use plastics aren’t always bad?  Was this hypocrisy, or a missed opportunity?

On a positive note, we'll no longer be chastised for unwrapping too many bundles (at least not on those specific contracts).  And that IS a good thing.  Restrictions on unbundled plugs are an anachronism of the past, based upon the mentality of the time when we planted exclusively bareroot seedlings and any exposure to "the air" could legitimately dry out the fine root hairs on the stock.  If a forester wants to promote good stock-handling, they should focus on the moisture content of the plugs, not upon whether or not the seedling bundles are unwrapped.

 

Finding a Labour Force

I heard a lot of reports in 2023 from companies who found it very difficult to recruit as many workers as they had hoped.  In some cases, this led to contracts being pushed out well beyond their intended completion dates.  In a few cases, companies had to walk away from contracts entirely.  Not a good situation.

Is there a solution?  Yes, better pay and better working conditions will help.  Listening to one’s employees will help.  But a shortage of workers is not a problem that will suddenly go away.  Hiring is a challenge nation-wide, and when clients make the job more challenging (such as with the elimination of bundle wrappers), it may come back to haunt them in the end.  What will happen if a significant number of planters get fed up in 2024 and start spreading the word that the planting industry should be avoided?  That would be a disaster in 2025, just when the industry really needs to ramp up in order to start replanting the 2023 wildfires.  If we’re going to have a sufficient labour force in 2025, then 2024 needs to be stellar.

 

Pricing

What can planters expect from 2024?  I don’t have a crystal ball, and I’m reluctant to speculate at this point.  However, I do know that bid prices in BC (to planting companies) actually dropped slightly from 2021 to 2023.  This was followed by a large increase for 2024 government projects (in BC).  Keep in mind that public (government) work in BC only represents roughly 20% of all planting within the province.  Private work accounts for the other 80%, and the big increases that we’ve seen in the public sector are not always matched equally by price increases in the private sector.  Things are moving in the right direction though.  Many private contracts are also going up in price.  This is good for planting companies, at least on the surface.  There is no way to calculate the exact increase on an industry-wide basis of both public and private work, but my guess is that contractors’ prices are up approximately 10-12% overall from 2023 to 2024.

A 10-12% increase sounds great for planting companies.  But is it?  Let's look at more than just the past twelve months.  We saw that bid prices decreased slightly from 2021 to 2023.  Therefore, if we zoom out and looking at the full period from 2021 to 2024, bid prices to planting companies have only increased by maybe 8-10% over a three-year span.  In light of significant increases in almost every category of operational expense over the past three years, this is not enough.  Planting contractors, on average, are in a more challenging financial environment than they were three years ago, despite the recent price increases.

Let’s focus on planter pricing instead of company pricing for a moment.  Planters generally seemed to see better prices in 2023 than in 2022 (which only seems fair in light of the inflation that we all experienced) but those increases basically came out of owner’s pockets, not from clients.  Will there be further planter price increases in 2024?  Probably yes.

It seems like it’s a tough time to be a planting company owner.  They’ve been hit with numerous cost increases in the past few years, bid prices were stagnant until this past Fall, it’s getting increasingly difficult to recruit a labour force, and clients have been trying to cut away at the bottom line.

I think we’re in a bit of a do-or-die situation for contractors in 2024.  Prices need to go up.  In many cases, bid prices have gone up recently, but that won’t necessarily translate into an equivalent increase in planter prices, as most companies are trying to dig themselves out of a hole from the past few years.  Regardless, I believe that planter prices need to increase in 2024 to account for inflation and, in some cases, to reflect the challenges that we’re going to face with unbundled trees.  Even if planter prices increase by another 5% this year (on top of the planter price increases that we’ve seen over the past couple years), it may be tough for some companies to find enough planters to complete the 2024 season.

If any foresters are reading this and don’t think that planting companies are struggling, let me remind you that some contracts did not get completed in 2023.  Nobody likes to talk about this, as nobody like to hear about a contract failure, but hundreds of thousands of trees were mulched or taken to landfills.  I’m aware of at least one company that has simply decided that 2023 was their last year for planting.  I’m also aware of two other major companies that are scaling back significantly.  Are these companies the so-called canaries in the coal mine?

 

Bears, and Safety in General

Our industry is small enough that when there’s a major safety incident, everyone sits up and takes notice.  Unfortunately, one company had such an incident in early July, when a planter was attacked by a bear while planting near Tumbler Ridge.  Thankfully, she survived.

The previous year, the helicopter company that I was using had one of their staff attacked by a bear at a staging site close to where I was working.  That person was doing logistical support work for another planting company at the time.  Sadly, she didn’t survive.

We didn’t sign up for planting with the expectation of getting hurt or becoming a fatality.  We like to spend our summers thinking about what we’re going to do with our money in the Fall and winter.  We deserve to enjoy our earnings after the season is safely over.

There are a lot of safety topics that some planters see as a remote threat – like having a tree fall on you, getting hit by lightning, or being attacked by a bear.  Sure, it’s possible, but it’s not likely to happen to you, right?  Yet I’ve personally known planters who have been victims in all three of those types of situations.  Remember, if anything can go wrong while planting trees, it eventually will.  Don’t put aside common sense thinking that something is unlikely to happen to you.  It seems that the planters in all of these situations did absolutely nothing “wrong” to bring about the incidents that they were involved in, but playing by the rules doesn’t mean that external events can’t work against you.

I’ve sometimes said, “Maybe you should slow down a bit,” to a driver on a gravel road.  And sometimes they respond, “But I’m not even going the speed limit, and I’m in control.”  Sure you are, until nature throws a curve ball at you and a deer jumps out in front of the truck, or until you hit some washboard and the truck goes sideways.  Expect the unexpected, no matter what you’re doing.  The hardest part of my job as a supervisor is thinking about all the things that can wrong every day, and how easy it is for someone to get hurt.

It may be beneficial for more crews to have bear spray available at the truck in protected Pelican cases, or in a Kozy Tote.  A lot of planters don't have an interest in back-bagging a canister of bear spray, and there are real risks based on accidental discharge, but a protected canister that is stored at the truck with the first aid gear may come in handy.  Expect WorkSafeBC to be asking more companies what their bear deterrent plans are in 2024.

Let’s move on to some more cheerful topics.

 

Starlink Internet and … Cell Phones?

I’m certainly not a Musk fanboy, but I’m impressed with Starlink.  I’ve used their systems for a couple years now, and while they’re still not ideal in a camp situation with several dozen simultaneous users, they’re a huge step up from previous options such as Xplornet.

Within two years, we may see something even more useful.  Starlink is working on satellite-to-cell technology which would allow cell users in any part of the globe to remain connected for SMS, voice, and data, even when traditional cell service is not available.  The drawback is that Rogers is the first company they’ve partnered with in Canada.  I say that’s a drawback because Rogers currently seems to be one of the least reliable networks in rural British Columbia.  Or maybe that means that Rogers will be a great fit.  Either way, the good thing is that once the system is operational, we allegedly won’t need to trade in our phones for a special Starlink phone.  The system is supposed to work with all existing 4G and 5G phones.

Let’s hope that this technology doesn’t fail like a few of Musk’s other projects.  I’ve been following this story for about half a year, and the first six of Starlink’s direct-to-cell satellites were launched just 48 hours ago, which will allow initial testing of wide-scale operational viability.  Widespread satellite connectivity for cells phones would be a huge positive development for the planting industry, if they pull it off.

 

“The Cache”

There’s a new website available for the planting industry:   www.cachelife.ca

It’s still in the development phase, but the goal is to make it a very rich resource for planters and other industry stakeholders.  If you want to check it out, I’d recommend starting with the “Culture” or “In The Field” sections under the Explore tab.

 

Kerri Dunsmore

Kerri is an Athletic Therapist.  She was a planter for several years, and she’s long been a frequent and welcome presence on planting-related social media.

Kerri is based in Williams Lake, but her outreach extends well beyond that thanks to some of the pre-season training programs that she has put together for planters.

Kerri deserves a shout out, so here’s a link to her website:  www.kdathletictherapy.ca

If you’re working anywhere near Williams Lake and have any issues, reach out to her.

 

Future Changes to the Industry

We’ve heard some rumours about upcoming changes to the industry.  There is going to be a complete overhaul of how we classify workplaces and assign first aid.  This all comes into effect in November of this year, so it won't affect the upcoming planting season.  However, it will matter for next year.

Hi Vis – High vis clothing may eventually be required for all planters working in British Columbia.

ETV’s – Current rules (simplified) dictate that if there are 16 or more persons working on a planting site, an ETV is required.  That threshold will be reduced such that crews of 10 persons will be required to have an ETV.  This requirement would also be triggered by two six-pack crews working near each other.  Related to this, ERP's will need to be improved.  The industry may have to reconfigure fleets quite radically for 2025, and this will be a very expensive situation (a single new crew cab pickup with ETV capabilities can cost more than $160,000). 

OFA3’s – Not only may the number of ETV’s eventually need to be increased, we may also need more crew members trained with the full OFA level 3 first aid certification.  To be honest, this is a fabulous course, and having more OFA3’s available would be good for the industry.  For the November 2024 changes, it looks more likely that there will need to be more Intermediate first aiders in our workplaces (formerly OFA2), and the duration of the Intermediate course is also being shortened.

Injury Management - There will be changes in how injury management is conducted (Bill 41), with greater responsibilities placed on both workers and employers to cooperate in helping people recover from injuries.  This will likely increase the workload of OHS coordinators, although it also has the potential to help save money on claims.

If there are any further developments on any of these issues, we can rest assured that Jordan Tesluk, our official industry Safety Advocate, will share the information widely.

 

Artificial Intelligence

AI is an odd topic for a tree planting article.  Or is it?

Many people will think I’m a bit crazy here, but I believe that AI presents an opportunity for significant improvements to the planting industry.  I’m not talking about AI robots designed to plant trees, or AI-powered drone planting (yet), or anything futuristic and hi-tech like that.  I’m talking about more mundane administrative stuff.

I’ve been paying very close attention to this field for almost a year now, and the change of pace is stunning.  The AI field has evolved more in the past six months alone than the planting industry has evolved in forty years, and that’s saying something.  Artificial Intelligence offers a lot of risks, and it offers incredible opportunities.

So far, I’ve thought of about a dozen areas where AI’s can assist management at planting companies.  To generalize, small companies will probably see the most benefits from being able to leverage knowledge that they don’t possess in-house.  Large companies will probably see benefits from extremely powerful data analysis.

Don’t worry, AI won’t take away our jobs.  But AI’s, LLM’s (large language models), and ML (machine learning) will have the potential to improve a lot of things that we take for granted.  We’re going to see improvements in everything from weather forecasting to delivery logistics to mapping.  Or maybe we won’t even notice.

 

Conclusions

Ok, that’s enough for now.  Get some rest.  It’s already 2024.  The planting season will be here before you know it …

 

 

Links to Previous "State Of The Industry" Posts:

Fall 2022:  https://jonathan-scooter-clark.blogspot.com/2022/10/state-of-industry-fall-2022-tree.html

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, 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