British Columbia’s forest products sector is facing another major capacity reduction after Domtar announced the permanent closure of its Howe Sound pulp mill and Bayview Fibre chipping facility on the province’s Sunshine Coast.

The decision will affect approximately 400 workers, adding to a series of pulp mill closures and curtailments across British Columbia as producers contend with weak global pulp markets and declining access to competitively priced fibre.

Domtar attributed the decision primarily to lower Asian demand, weak global pulp prices and reduced availability of affordable domestic fibre.

The announcement follows other significant capacity reductions in the province, including Domtar’s Crofton mill closure and Canfor’s decision to permanently close its Northwood pulp mill in Prince George.

Weak Pulp Markets Combine With Fibre Pressure

Domtar President Luc Thériault said the decision followed a review of the operating environment and was not a reflection of employee performance.

Workers at the facilities had worked to improve operational performance, he said, but prevailing market conditions ultimately determined the mills’ future.

The company identified three factors behind the decision: declining demand from Asian markets, unfavorable global pricing and increasingly difficult access to affordable fibre within British Columbia.

The combination presents a particularly difficult challenge for pulp producers.

A mill can pursue improvements in productivity, energy consumption and operating costs, but fibre remains one of its fundamental raw-material requirements. If available fibre volumes decline or procurement costs become uneconomic while finished pulp prices are simultaneously under pressure, the operating margin can become increasingly difficult to sustain.

Domtar said it will continue monitoring market and business conditions and evaluate potential future opportunities should conditions improve.

About 400 Workers Face Job Losses

The closures represent another substantial employment loss for communities dependent on British Columbia’s forest industry.

Howe Sound Pulp operates at Port Mellon on the Sunshine Coast, where forestry and pulp manufacturing have provided industrial employment for generations.

British Columbia Forests Minister Ravi Parmar described the announcement as an “immensely difficult day” for affected workers and communities.

The provincial government said it intends to work with the affected communities to provide assistance to employees.

Parmar also pointed to the severity of current pulp-market conditions, saying inflation-adjusted pulp prices are approaching their lowest levels in approximately a century.

For mills already dealing with fibre constraints and high operating costs, prolonged weakness in selling prices increases pressure on production economics.

Another Blow to British Columbia’s Pulp Capacity

The Howe Sound announcement does not stand alone.

British Columbia has experienced a succession of pulp and forest-product capacity reductions.

Domtar previously announced the closure of its Crofton mill, while Canfor recently confirmed the permanent closure of its Northwood Pulp Mill in Prince George.

Millar Western Forest Products has also announced a temporary production curtailment at its Quesnel River Pulp operation from September 4 until at least November 1, citing unfavorable market conditions.

The circumstances surrounding individual facilities differ, and temporary curtailments should not be treated as equivalent to permanent closures. Collectively, however, the announcements demonstrate the pressure currently facing the province’s pulp manufacturing base.

Fibre Availability Becomes a Structural Issue

Weak pulp prices can recover as global supply and demand change. British Columbia’s fibre problem is potentially more structural.

Pulp mills depend on wood chips, residuals and other fibre streams generated throughout the broader forest-products industry.

When sawmills reduce production or close, fewer residual wood chips may become available to nearby pulp producers. At the same time, changes in timber supply and harvesting economics can affect the availability and price of other fibre sources.

This creates an interconnected problem.

A reduction in lumber production can affect more than the sawmill itself. It can also alter the raw-material economics of pulp mills that depend on residual fibre from lumber manufacturing.

That relationship means continued contraction in one part of British Columbia’s forest sector can place additional pressure on other facilities.

Union Warns of a Deepening Forestry Crisis

Unifor characterized the latest closure as evidence of a worsening crisis in British Columbia forestry and called for government intervention.

The industry’s difficulties extend beyond pulp markets.

British Columbia forest-product producers have been navigating changing timber availability, operating costs, international competition and trade barriers affecting Canadian forest products entering the United States.

However, Domtar specifically identified Asian demand, global pulp pricing and affordable domestic fibre availability as factors behind the Howe Sound decision.

That distinction is important when assessing why individual mills close.

What the Closure Means for BC’s Pulp Industry

The loss of Howe Sound adds another facility to the list of pulp capacity disappearing from British Columbia.

The immediate impact will be felt by the roughly 400 affected workers and the surrounding Sunshine Coast economy. The wider consequences could extend through logging, transportation, contractors, fibre suppliers and other businesses connected to mill operations.

More broadly, the announcement raises a difficult question for the province’s remaining pulp mills.

If global pulp prices eventually recover but British Columbia’s competitively priced fibre supply continues to contract, improved international markets alone may not be sufficient to restore the economics of every operation.

For that reason, the Howe Sound closure is not simply another response to a weak pulp-price cycle. It also illustrates how market conditions and British Columbia’s longer-term fibre availability problem are increasingly converging.

Last Updated on 21/08/2026 by Jota Machinery