The City of Terrace is backing a bid by the Kitsumkalum First Nation to have three logging tenures tied to Skeena Sawmills transferred to its control.
Although Kitsumkalum purchased the licences as part of the deal it struck to take the closed Skeena Sawmills out of bankruptcy this spring, control must now be formally transferred by the provincial government which granted them in the first place.
That could take as long as six months and Kitsumkalum is now working through the necessary steps, Kitsumkalum deputy chief councillor Troy Sam told city councillors Aug. 22.
"We're in it for the long haul and whereas the previous owners, they come in here, they take from our land and all the profits go back wherever they go. They don't stay here," Sam told council in asking for the letter of support.
In many ways, Sam said, the letter would continue the relationship Kitsumkalum has with the city that includes fire protection and a sanitary sewer agreement.
He said Kitsumkalum had no choice but to submit a bid for the bankrupt mill since it wanted to ensure the mill was under local ownership.
"There was a consensus amongst everyone that the region would like to see local ownership," Sam said of conversations with other First Nations and local companies who worked for the previous owners but who hadn't been paid.
He said there won't be a resumption of operations anytime soon as Kitsumkalum continues to work on a business plan to determine and then avoid what has gone wrong in the past to cause Skeena Sawmills to go into bankruptcy.
But Kitsumkalum does want to start logging as soon as it can to raise the money to put an eventual business plan in place.
Councillor Dave Gordon asked Sam if Kitsumkalum's planning includes newer production facilities to cut smaller diameter second growth wood.
That's because the mill's saws are geared toward older, larger-diameter trees from the days those trees were far more present in the area.
"With all of the big wood starting to dwindle, we have the second growth that's going to be coming online here shortly, So part of our business plan is looking to see how we could start utilizing the new profile of timber coming online in the next five, 10, 15, 20 years," Sam replied.
There was no opposition to providing a letter.
"It makes a ton of sense to me that we would sign this letter and move forward," mayor Sean Bujtas said.
The three logging tenures taken together supply about half of the 600,000 square metres of wood the mill needs each year to meet manufacturing requirements with the remainder coming from other licence holders, First Nations and wood sold by the province.
The previous owners of Skeena Sawmills, through the Cui family, placed the mill and its adjacent pellet plant, into bankruptcy last fall, citing a large debt and high costs.
The Cuis then proposed to buy the mill back by placing its debts into a new company and then having that company declare bankruptcy, leaving the operation with a virtually clear balance sheet. But in a last-minute bid, the Kitsumkalum topped the monetary offer made by the Cuis.
