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Terrace’s Skeena Sawmills fails to secure provincial aid before closure

Skeena Sawmills, affiliates close without seeking provincial funds for a crucial $17.5M upgrade plan
Skeena Sawmills in 2020, during better times, before financial challenges led to its untapped potential for provincial improvement funds and eventual closure. (Black Press Media file photo)

Skeena Sawmills never did fully submit its application for provincial help to improve its facility and next-door sister company Skeena Bioenergy in the months leading to their full forced closure by a major creditor, information from the province indicates.

Company officials had hoped to apply for some of the $180 million the provincial government set aside earlier this year to finance companies primarily providing high-value forestry products.

Based on a presentation to Terrace city council in February, a three-year plan costing $17.5 million plan was laid out with company officials saying the expectation would be a return to profitability.

Components of the plan included:

- using a mechanical press to squeeze moisture out of the raw material for pellets instead of a more expensive drier powered by natural gas.

- a log deck to the sawmill so that it could cut more wood into more value-added timber products at a cost of $1.5 million to $2 million.

– Adding a second dry kiln, which would cost $5 million at the low end or possibly as high as $10 million depending upon availability. This would increase the value of the final product because it would be dry.

City council did agree to provide Skeena Sawmills with a letter of support that was to accompany its application.

The company officials also stressed that once the $17.5 million plan was completed, another $30 to $40 million would be needed for ongoing improvements.

“Based off the preliminary conversations our program staff have had with them, Skeena Sawmills are intending to request funding somewhere in the $2,000,000 - $3,000,000 range,” a statement from the jobs, economic development and innovation ministry indicated.

But follow-up information from the same ministry indicated a formal application was never made.

Company officials, in their February presentation to council, also asked it for financial relief from property taxes.

That took the form of asking for a refund of property taxes already paid and to forgive an amount it owed at the time.

The city turned down the request as there is no legal mechanism for it to consider such a request.

With both Skeena Sawmills and Skeena Bioenergy now closed, the province now says it is offering assistance.

“Community transition services have been offered to Terrace to see what supports they need, which could include services like employment insurance and bridging to retirement information sessions, and/or skills training [for laid off workers] and economic development funding,” the province said.

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