The final report includes:

• An executive summary
• Themed reports on trends such as logging rates and profits, succession planning, operating costs, contractor age and more!
• Regional reports on the B.C. Coast, B.C. Interior, Ontario, Quebec and Atlantic Canada
• Quotes from loggers across Canada

To read the full report for free, click here.

Thanks to our generous sponsors, Tigercat, Hultdins and John Deere, for making the 2020 survey possible.

The impact of this closure is evident in the results of CFI’s 2020 Contractor Survey. While Atlantic loggers are still reporting decent profit margins and have even increased their harvesting volume, there are multiple signs of trouble brewing: difficulty negotiating logging rates, few young people entering the industry, higher operating costs, and fewer customers for wood products.

In general, here’s what Atlantic loggers had to say:

Rates and profits

In light of the Northern Pulp closure, it’s no surprise that Atlantic Canada contractors are struggling more than ever to negotiate better rates. In 2018, just 28 per cent saw a rent increase compared to five years ago. That number has halved to just 14 per cent, and in Nova Scotia, that number is zero.

For nearly half of all Atlantic Canada contractors (46.5 per cent), logging rates have been stagnant since 2015. And for 28.5 per cent, logging rates have decreased. In comparison, just 17 per cent reported lower rates in 2018, and 23 per cent did so in 2016. This puts the region solidly at the bottom in terms of rate negotiations. Nationally, 45 per cent of loggers saw a rate increase. In the B.C. Interior and Alberta, that number jumps to 53 per cent and 63 per cent, respectively.

Despite the dismal picture when it comes to logging rates, contractors in the region were the least likely to report making no profit in the last year. Just 10.5 per cent say they didn’t make a profit. In comparison, that number jumps to 38 per cent in Ontario. More than half (55.5 per cent) report a profit margin between one and five per cent. Interestingly, 17 per cent say their profit margin was above 20 per cent, tying with the B.C. Interior for the highest percentage in this category. This is higher than in 2018, when just six per cent achieved 11 per cent or higher profit margin.

These numbers may be skewed because 17 per cent of Atlantic Canada contractors preferred not to say or did not know their profit margin in the last year.

While Atlantic loggers seemed to have relatively steady operating costs in 2018, our 2020 survey shows that costs are on the rise in this region, just like they are across the country. More Atlantic Canada loggers rate labour costs as slightly higher than in any other region (65.5 per cent). And the cost of purchasing machinery has also gone up, with 77.5 rating it as more expensive than three years ago. Even more Atlantic Canada contractors (83.5 per cent) say the cost of machinery parts and services is up. This increase in machinery costs means insurance costs are up; 100 per cent of Atlantic Canadian contractors say insurance costs are higher than three years ago, just like in Ontario.

Operator pay

But, Atlantic Canada still has the lowest operator wages in Canada, at an average of $22.50 per hour. While this is higher than in 2018, when the average was $20, Atlantic Canada is the only region where contractors pay less than $16 an hour (12.5 per cent). Another 10.5 per cent are paid $16-$20 an hour and nearly half pay $21-$25 an hour. No contractors pay more than $30 an hour, unlike on the B.C. Coast and in Alberta, where 94 per cent and 91 per cent, respectively, pay that amount.

However, Atlantic operators are no longer the least likely to receive benefits on the job – in neighbouring Quebec and Ontario, 57 per cent and 56 per cent, respectively, do not provide benefits. That number drops to 53.5 per cent in Atlantic Canada. In contrast, in 2018, 57 per cent of Atlantic Canadian contractors said they did not provide benefits.

Those that do provide benefits are most likely to provide medical/dental insurance or life insurance. More than one-third of Atlantic Canadian contractors provide medical/dental insurance (35.5 per cent) compared to just 23 per cent in Quebec. But this is still much lower than in the B.C. Interior, where that number jumps to 82 per cent.

Company size

Atlantic Canadian contractors have historically run the smallest operations in Canada. But, the results of our 2020 Contractor Survey show that this is no longer the case. On average, they harvest 114,000 cubic metres per year, a big jump from the average in 2018 (82,000 cubic metres). Now, Quebec has the smallest operations, with an estimated average harvesting volume of 92,000 cubic metres.

Despite higher harvesting volumes, Atlantic loggers’ revenue has remained about the same as in 2018, at around $2 million. This number, like their harvesting volume, is higher than their neighbours in Quebec, where the estimated average revenue is just $1.74 million.

Atlantic Canadian operations still have the fewest pieces of equipment, with an average of six. No contractors run more than 20 machines, but fewer operations run between one and three machines in 2020 (34 per cent) than in 2018 (43 per cent). Most Atlantic contractors (41 per cent) run between seven and 10 machines. Another 14.5 per cent run four to six machines.

With such small fleets, it’s no surprise that Atlantic contractors employ the fewest number of people. The average contractor employs between seven and eight people – a far cry from the average of 32 people in Alberta, where operations are largest. More than half of Atlantic loggers employ one to five people. None employ more than 50 people, unlike on the B.C. Coast, where 13 per cent employ 51 to 100 people. But, there has been a drop in the number of Atlantic operations with no employees, from 18 per cent in 2018 to just 3.5 per cent in 2020.

Despite the closure of Northern Pulp, there is still high market competition for Atlantic loggers’ logs and other wood products. Twenty-eight per cent of contractors in the region have more than five customers, the highest in any region in Canada. But, this is a drop from 42 per cent in 2018. Now, 29.5 per cent of contractors say they have just one customer, compared to 11 per cent in 2018. Another 29.5 per cent have three or four customers compared to 36 per cent in 2018. It’s clear that the shutdown of Northern Pulp has had some impact on market competition, although perhaps not as much as some had feared when the mill closed at the beginning of the year.

Contractor age

With smaller companies and lower revenues, the barrier to entry for the younger generation should be lower. But, with the closure of Northern Pulp and higher operating costs across the region, it seems fewer young people are getting into the industry. Just eight per cent of Atlantic loggers are under 35 years old, compared to 24 per cent in Alberta and Ontario. The region has the largest percentage of contractors over 65 (24.5 per cent). Another 18 per cent are between 56 and 65 years old. The remaining 50 per cent are between 36 and 55 years old.

As a result, Atlantic Canadian contractors are among the oldest in the country, with an estimated average age of 54, the same as contractors on the other side of the country on the B.C. Coast. The national average age is 52 years old.

In comparison, neighbouring Quebec and Ontario have the youngest workforce, with an average age of 49 and 48 years old, respectively. Just like in 2018, this makes one wonder what needs to happen in Atlantic Canada to attract more young people to the industry?

Succession planning

Despite the older average age of Atlantic loggers, they plan to stay in the industry for another 12 years, on average. But, when broken down by province, there’s a clear difference between New Brunswick and Nova Scotia. In New Brunswick, the estimated average is 17 years. In Nova Scotia, it’s just seven years – again, a sign of the impact of Northern Pulp’s closure.

Nearly half (49.5 per cent) of Atlantic loggers plan to leave the industry in 10 years or less, and for 32.5 per cent it’s five years or less. This is a drop from 2018, when those numbers were 69 per cent and 39 per cent, respectively. But this could be because more loggers have retired in the interim.

Given these numbers, it’s especially concerning that nearly half (46.5 per cent) of Atlantic contractors have no succession plan. Another 27 per cent plan to sell or auction their equipment and shut down, and 23.5 per cent say they expect their children to assume control.

Future

It’s no surprise that, when asked about future challenges, they highlight the closure of Northern Pulp and the resulting lack of a pulp market. In fact, 82 per cent of Atlantic loggers rate access to markets as “very important,” compared to a national average of 65 per cent. In Nova Scotia, that number is 100 per cent. Logging rates are also a major concern, with 93 per cent of Atlantic loggers rating it as “very important.”

Despite how few young people are getting into the industry in the region, Atlantic loggers are still less likely to rate this as a major issue, with just 51 per cent saying it’s a concern, compared to 72 per cent nationally.

With the closure of Northern Pulp and the other challenges facing Atlantic loggers, we can expect that the industry will look very different five years from now. Many loggers are likely to leave the industry, especially in Nova Scotia. While there is still high market competition for logs and other wood products, such as wood chips, the industry will likely contract, and the impact of that will be felt for generations to come.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

But the results of CFI’s 2020 survey show that the picture is changing. While the region remains one of the most profitable in Canada, with a fair amount of success negotiating logging rates, the cost of operating is on the rise, along with the average age of contractors, and harvesting volumes remain low. Overall, the results suggest the industry could see significant changes in the next five years.

In general, Quebec contractors reported the following:

Rates and profits

Quebec contractors continue to have luck negotiating rates, with a total of 40 per cent seeing a rate increase compared to five years ago. In 2018, that number was 34 per cent, and in 2016, it was just 17 per cent. But, this is still a ways away from the 64 per cent of loggers in Alberta who saw a rate increase, or even the 50 per cent in Ontario.

As logging rates in the region have increased, so have profit margins. Quebec continues to be one of the most profitable regions for loggers, with 17 per cent reporting a profit margin of 11 per cent or higher. Only Alberta has better numbers, with 36 per cent reporting a profit margin of 11 per cent or more. Despite this, more Quebec contractors reported making no profit in 2019 compared to 2017 – 19 per cent versus 13 per cent. A large proportion (26 per cent) say they made a profit of one to three per cent.

This change could be explained by the fact that operational costs in the province have gone up since 2018. All told, 87 per cent of Quebec contractors say the cost of labour has gone up, and 76 per cent say fuel costs have increased. In comparison, 84 per cent of contractors nationwide report labour costs have risen in the past three years, and 61 per cent say fuel costs have increased.

Across the country, insurance costs have skyrocketed. Almost 100 per cent of respondents in Quebec (87 per cent) say insurance costs have gone up in the past three years, likely as a result of the increasing cost of machinery. But the cost of machinery remains lower in Quebec than in other provinces, with just 35 per cent of Quebec loggers rating machinery purchase as having increased significantly, compared to 55 per cent nationally.

Operator pay

Continuing the trend seen in recent years, machine operators in Quebec are paid less than those in Western Canada. But, operators in Ontario are now receiving a higher wage, with 50 per cent of contractors now paying $26-30 an hour. In comparison, just 35% of Quebec contractors pay that rate, while 38 per cent pay $21-25 an hour. These numbers have dropped since 2018, when 44 per cent of Quebec contractors paid $26-30 an hour. A small percentage pay more than $30 an hour (three per cent) and none pay less than $16 an hour.

This decrease in operator pay may be explained by the higher operating costs. Contractors across the country have also become less likely to offer some form of benefits, with Quebec contractors the least likely to do so. More than half (57 per cent) of Quebec contractors say they do not offer benefits. Ontario comes in at a close second, at 56 per cent.

Workload

Across the country, there has also been a corresponding decrease in the number of hours per week an operation runs. The proportion of operations that run more than 70 hours per week has dropped from 40 per cent in 2018 to 35 per cent in 2020.

This drop has mostly been seen in B.C., especially on the Coast, where 87 per cent of operations run fewer than 70 hours a week. In contrast, 68 per cent of Quebec operations run fewer than 70 hours a week, close the same number as in 2018 (69 per cent). Quebec still has the highest percentage of part-time operations running less than 20 weeks a year (13 per cent), but this number has dropped since 2018 (17 per cent).

Personally, the majority of loggers continue to work more than 55 hours a week (58 per cent). And it seems that Quebec contractors are less likely to understand the work-life balance factor than two years ago. In 2018, just 39 per cent of Quebec loggers worked 55 hours a week or more, but in 2020, that number has jumped to 47 per cent. Contractors on the B.C. Coast now seem to have the best work-life balance, with just 38 per cent working more than 44 hours a week.

Company size

In terms of harvest volumes, Quebec contractors have the smallest operations, with an estimated average of 92,000 cubic metres. Twenty-three per cent of Quebec companies harvest less than 10,000 cubic metres per year, the highest percentage in this category nationally. The majority (52 per cent) harvest between 10,000 and 250,000 cubic metres a year.

These numbers are fairly similar to those in Atlantic Canada, but unlike in 2018, 6.5 per cent of Atlantic Canada contractors report harvesting between 750,000 – 1 million cubic metres a year, while that number is just three per cent in Quebec.

It makes sense, then, that Quebec loggers have the lowest annual revenues in the country. The estimated average annual revenue for Quebec contractors is $1.74 million now, compared to $2.3 million in 2018. In Atlantic Canada, that number is $2.042 million, and in Ontario, the number jumps to $3.983 million. On the whole, loggers across the country are reporting lower revenues, likely as a result of the weak lumber markets in 2019. Given the booming lumber market in 2020 following the initial shock of COVID-19, we can expect these numbers to change in 2022.

When it comes to equipment fleet size, Quebec still has among the lowest numbers in Canada, with 58 per cent of Quebec loggers running between one and three machines. This is an increase from 2018, when that number was 52 per cent.

On average, Quebec loggers run just seven pieces of equipment, slightly lower than the eight pieces they ran in 2018. Only Atlantic Canada has a smaller average fleet size, at six pieces of equipment. Alberta runs the most equipment, with an average of 25 machines. But, there has been a big drop in the size of fleets nation-wide: only 18 per cent of operations run 21 or more machines, compared to 26 per cent in 2018 and 31 per cent in 2016.

Correspondingly, there has been a big jump in the percentage of operations with 10 or fewer employees across the country: from 41 per cent in 2016 to 55 per cent in 2020. Quebec continues to have among the smallest teams – 50 per cent of logs run with just one to five employees, and nine per cent operate individually. Only Atlantic Canada has a higher percentage of contractors operating with one to five employees, at 53.5 (an average between 57 per cent in New Brunswick and 50 per cent in Nova Scotia).

However, more Quebec contractors operate with more than 20 employees (18 per cent) than in 2018 (12 per cent). Alberta has the most employees, at an average of 32, with 36 per cent of contractors employing 51 to 100 people.

But, just like in 2018, these numbers are still a good sign because they suggest there is a lower bar for entry for new contractors in the region.

Contractor age

Despite the smaller company size and lower revenues, the estimated average age in Quebec has gone up from 40 in 2018 to 49 in 2020. This is slightly lower than the national average of 52, but Quebec contractors are no longer the youngest in the country. That title now belongs to Ontario, where the estimated average age is 48 years old.

One-quarter of Quebec contractors are still between the ages of 36 and 45, but only 19 per cent are under 35, a big drop from 2018 when that number was 31 per cent. The biggest age bracket is now the 55-65-year-old category, at 28 per cent. Another 12 per cent are over 65 years old. Ontario and Alberta now have the largest percentage of contractors under 35, at 24 per cent each.

Succession planning

However, Quebec loggers still expect to be in the industry for the longest, at 15 years. More than one-quarter (26 per cent) say they will be in the industry for another 20 years. This is a drop from 2018, when almost a third said so, but only 23 per cent plan to exit the industry in five years or less.

These numbers help explain why Quebec still has the largest percentage of contractors who do not have a succession plan (50 per cent). Given how long most Quebec loggers plan to stay in the industry, it’s not as important as in other regions, such as the B.C. Coast or Atlantic Canada, where 47 per cent and 31.5 per cent of contractors, respectively, plan to exit the industry in five years or less. However, as Quebec loggers become older and look towards retirement, it will be critical that they begin thinking of succession plans in order to ensure the success of the industry for years to come.

Quebec continues to be the region with the fewest loggers that plan to sell or auction their equipment and shut down, at just seven per cent. In comparison, 27 per cent of Alberta contractors and Atlantic Canada contractors plan to do so.

Future

The overall picture for Quebec’s logging industry is a mixed bag. On the one hand, Quebec loggers are still among the most profitable in the country and have been fairly successful negotiating rates. But on the other hand, operating costs are increasing, while harvesting volumes remain low, and the workforce is becoming older. This will make it harder to attract younger workers to replace those who are retiring, especially as operator pay and benefits have declined. There is work to be done to ensure that Quebec continues to have a successful logging industry for the next generation.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

But according to the results of CFI’s 2020 Contractor Survey, Ontario loggers are having much more luck in negotiating logging rates now. More young people have also gotten into the industry, and while harvesting volumes are lower than in 2018, they have not dropped off as dramatically as in other provinces. However, there is still work to be done: Ontario loggers are still among the least profitable in the country thanks to high operating costs. On the whole, the results are more positive for Ontario than in previous years, and there are signs that the industry will see more good news in light of the provincial government’s new forest sector strategy.

Contractors in Ontario, in general, reported the following:

Rates and profits

When it comes to logging rates, Ontario contractors have seen a big change since 2016. Back then, just 31 per cent of contractors said they had seen a rate increase in the past three years. That number has jumped to 50 per cent in 2020, with another 31 per cent saying their rates have stayed the same. Just 12 per cent report a rate decrease, and none report a decrease of more than five per cent. Only Alberta contractors have fared better, with 64 per cent reporting a rate increase there.

But, the higher logging rates does not equal higher profit margins. In fact, Ontario has the highest percentage of loggers who report not making a profit in 2019 (38 per cent). No contractors report making a profit of more than five per cent in the region, with just 51 per cent saying they made a profit of one to five per cent. The remaining 13 per cent prefer not to say or don’t know. The estimated average profit rate in the region is just two per cent, the lowest in the country. In contrast, Alberta contractors report an estimated average of 8.4 per cent. In neighbouring Quebec, that number is 5.6 per cent.

The lack of profit in the region can be explained by the increasingly high costs, particularly when it comes to insurance. Across the country, 92 per cent of contractors say their insurance costs have increased in the past three years. In Ontario, that number is a full 100 per cent. This is likely because the cost of machinery has also increased drastically, with 63 per cent of contractors rating it as significantly higher than three years ago. Loggers report a corresponding increase in the cost of machinery parts and services, with 69 per cent saying it’s significantly higher. On top of that, 93 per cent of Ontario contractors say the cost of labour has increased, and 50 per cent say fuel costs have increased. Overall, it’s clear that logging has become a much more expensive endeavor in the region.

Operator pay

Operator pay is also going up in the region, with 50 per cent of contractors paying $26-$30 per hour, and 19 per cent paying more than $30 per hour. In 2016, almost two-thirds (62 per cent) paid $21-$25 per hour, and none paid more than $30 per hour.

The estimated average wage in the region now is $28 an hour, higher than in Quebec ($25) and Atlantic Canada ($22.50), but far lower than in B.C. and Alberta, where the average is $35 or more.

This increase in pay might be explained by the higher level of competition for skilled trades workers in the province, as older workers retire and fewer younger workers come into the industry to replace them (more on that below).

However, fewer contractors in Ontario are providing benefits to operators. Only 31 per cent offer medical/dental insurance, and 19 per cent offer life insurance. In comparison, in 2016, 46 per cent offered medical/dental insurance and 31 per cent offered life insurance. This year, more than half (56 per cent) of Ontario contractors do not provide any benefits. Only Quebec has a higher number at 57 per cent.

Workload

Despite low profit margins, Ontario loggers are among the hardest working in the country. Forty-four per cent of operations run more than 70 hours per week, higher than the national average of 35 per cent. Another 31 per cent run 51-70 hours per week. This puts the estimated average number of hours per week in the province at 73. Only Alberta and Atlantic Canada have a higher average number, at 105 and 107.5, respectively.

On a personal level, Ontario loggers are second only to Alberta when it comes to the number of hours worked per week, at an average of 56 (in Alberta, the average is 59). No Ontario contractor reports working less than 46 hours per week, unlike their neighbours in Quebec, where 25 per cent do so. More than half of all Ontario contractors (56 per cent) say they work more than 55 hours per week. Another quarter work 51-55 hours per week, and 19 per cent work 46-50 hours.

But, Ontario contractors are working fewer hours than they did in 2016. At the time, 77 per cent claimed to work more than 55 hours per week.

Company size

Across the country, harvesting volume has decreased, with the percentage of those harvesting more than 100,000 cubic metres dropping from 60 per cent in 2018 to 40 per cent in 2020. The estimated average harvest per year fell from 189,000 cubic metres per year to 134,000.

Continuing the trend seen in 2016, Ontario loggers harvest more than their eastern neighbours, but less than their western ones. Unlike in Quebec, where 23 per cent of loggers harvest less than 10,000 cubic metres per year, no contractors in Ontario harvest that amount. One-third harvest between 50,000 and 100,000 cubic meres, and another third harvest 100,000 to 250,000 cubic metres.

The estimated average volume harvested is 116,000 cubic metres per year, just slightly more than the 114,000 cubic metres in Atlantic Canada and a good bit more than in Quebec, where the number is just 92,000.

It’s no surprise, then, that Ontario contractors report much higher revenues than their eastern neighbours. The estimated annual average is $3.983 million, compared to just $1.74 million in Quebec and 2.041 in Atlantic Canada. Across the country, annual revenue has dropped from $4.52 million in 2018 to $3.96 million in 2020.

But, with higher harvesting volumes comes larger machine fleets. This helps explain why despite having higher revenues, Ontario contractors are seeing low profits. While fleets have become smaller across the country, with just 18 per cent running 21 or more machines, 19 per cent of Ontario contractors are running 21 to 50 machines. One-quarter say they have seven to 10 pieces of equipment, and another quarter has 11 to 20.

On average, Ontario contractors have 18 pieces of equipment in their fleet, more than contractors on the B.C. Coast (16 pieces) and only slightly less than those in the B.C. Interior (19). In comparison, Quebec and Atlantic Canadian contractors have much smaller fleets, at 7 and 6 pieces on average, respectively.

To run these larger fleets, Ontario contractors fall in the middle between their eastern and western counterparts. Thirty-one per cent employ between 21 and 50 people, on par with the B.C. Coast. Another 26 per cent employ between six and 20 employees. But, more than one-third (38 per cent) employ just one to five people. This puts the estimated average number of employees at 20 people. This represents a significant drop from 2016, when 54 per cent of Ontario contractors employed 21 or more people.

Contractor age

Despite the large fleets sizes and high operating costs, Ontario is seeing more young contractors coming into the industry. In fact, the province has the lowest estimated average contractor age, at just 48 years old, compared to the national average of 52 years old. This is a drop from 2018, when that number was 54.

Ontario also has the largest percentage of contractors under 35 years old, at 24 per cent. This is a big jump from the six per cent under 35 years old reported in 2018. Nearly half (44 per cent) of Ontario contractors in 2020 are between 36 and 55, similar to 2018 when that number was 50 per cent. The province now has the lowest proportion of contractors over 65, at just eight per cent. This demographic change could be because some of the older contractors have retired, but it’s also likely that programs encouraging young people to get into the industry are helping the region. This is a good sign for the industry, suggesting that the transition to the next generation is well underway.

Succession planning

Although Ontario contractors are the youngest in the country, they are the most likely to have a succession plan in place. Only 25 per cent say they don’t have a plan, unlike their neighbours in Quebec, where that number is 50 per cent.

Ontario loggers are the most likely to have their children take control of their business, with 50 per cent saying they expect this to happen. In comparison, only nine per cent of Alberta contractors expect this to happen. Next door in Quebec, that number is just 20 per cent.

But Ontario contractors might be a bit optimistic, since only 25 per cent say they currently have children working in the operation that are likely to take over. Thirty-eight per cent have children who are too young to be involved, but they hope they will be one day. Another 19 per cent say their children are currently working in the operation but have no plans for them to acquire the business. Only six per cent say they are unlikely to be involved.

Only 13 per cent of Ontario loggers say they will sell their equipment and shut down, the second lowest percentage in the country (second to Quebec).

Future

Despite the high operating costs and low profit margins, there are reasons to be optimistic about the future of Ontario’s logging industry. With the youngest contractors on average and high likelihood of children taking over the business, it’s clear Ontario loggers see the industry as a good long-term investment.

The Ontario government released its final forest sector strategy in August this year. The plan calls for increasing the annual allowable cut and doing more with the available fibre, with a focus on value-added products and building up a market for low-grade logs to encourage economic growth in the industry. If the Ontario government follows through on these promises, loggers will likely see their profitability increase, especially with the high log prices the country has seen in the second half of 2020.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

The results of CFI’s 2020 Contractor Survey show that the average age in the logging industry is continuing to increase, from 49 years old in 2018 to 52 years old in 2020. This is a cause for concern for the industry as more loggers reach retirement age, and fewer young people are available to replace them.

Representation in the oldest age bracket (over 65 years old) has continued to increase from 2016, when it was just five per cent, to 12 per cent in 2018 and now up to 18 per cent in 2020. The percentage of contractors 45 and under has dropped from 45 per cent in 2018 to just 35 per cent this year.

Just two provinces report an average contractor age under 50 – Ontario and Quebec (48 and 49 years old, respectively). Ontario has the largest percentage of contractors under 25, at four per cent. The province also reports the smallest percentage over 65, at just eight per cent. Meanwhile, Alberta has the largest percentage of contractors between 26 and 35 years old, at 24 per cent, and Quebec has the largest percentage of contractors between 36 and 45 years old, at 25 per cent, although the B.C. Interior comes at a close second, at 23 per cent. Atlantic Canada also has a high percentage of contractors between 36 and 45 years old, at 20.5 per cent.

The B.C. Interior has the largest proportion of contractors between 46 and 55 years old, at 38 per cent, followed by Alberta, with 35 per cent in this age range and then Atlantic Canada at 29.5 per cent. The estimated average age of contractors in the region is 52. Their neighbours on the Coast are the oldest on average, at 54 years old. The B.C. Coast has the highest percentage of contractors over 64, at 24 per cent. Another 48 per cent are between 46 and 55 years old. Just seven per cent of B.C. Interior and 11 per cent of B.C. Coast contractors are under the age of 35, which suggests there will be trouble when it comes to succession planning.

Percentage of contractors who are in these age brackets, by region.

Owners, partners, managers and supervisors

The average age of owners, partners, managers and supervisors across the country is 50, and in this category, only one region reports an average age under 50 – Alberta, at 46 years old. The province has the largest percentage of owners, partners, managers and supervisors who are under 35 (36 per cent). An equal percentage are between 46 and 55 years old.

Although the average age in this category in Quebec is 50 years old, the province still has the highest percentage in this category between the ages of 36 and 55 (69 per cent). Nineteen per cent are still under 35. When asked how long they expect to be in the industry, a healthy 36 per cent of Alberta contractors and 29 per cent of Quebec owners, partners, managers and supervisors say it will be 13 or more years. (Look for our report on succession plans next week).

In contrast, the B.C. Coast has the oldest owners, partners, managers and supervisors on average, at 53 years old. The rest of the regions report an average age of 50 years old in this category, except Atlantic Canada, which is slightly higher at 50.5 years old.

B.C. has the highest percentage of owners, partners, managers and supervisors who are over 65 (21 per cent in the B.C. Interior and 24 per cent in the B.C. Coast). The majority in both regions are between 46 and 55 years old (45 per cent in the B.C. Interior and 29 per cent in the B.C. Coast). Just 10 per cent and 12 per cent of this category in the B.C. Interior and B.C. Coast are under 35.

Exiting the industry

Not surprisingly, when asked how long contractors plan to stay in the industry, the average answer was just 10 years in the B.C. Coast, and 11 years in the B.C. Interior. In contrast, contractors in Quebec plan to stay in the industry for an average of 14 years and contractors in Alberta expect to be in the industry for 13 more years.

However, there is a drop in the percentage of contractors in the Interior who plan to leave the industry in five years or less – from 47 per cent in 2018 to just 24 per cent in 2020. This suggests that loggers in the region are committed to staying in the industry for longer. But in the B.C. Coast, 47 per cent of contractors say they will be out of the industry in five years or less, followed by 31.5 per cent in Atlantic Canada.

The majority of owners, partners, managers and supervisors in Atlantic Canada are between 45 and 65 years old (46.5 per cent). But, 35 per cent are between 26 and 45 years old.

Percentage of owners, partners, managers and supervisors who are in these age brackets, by region.

When we compare these numbers to our 2016 and 2018 survey results, the industry outlook is mixed. The total percentage of contractors under 55 has dropped from 70 per cent in 2018 to 62 per cent in 2020. The trend suggests the average age of loggers across the country is increasing, given the drop in contractors aged 36-45 and the corresponding increase in those aged 46-55. The jump in the percentage of contractors over 65 is especially worrying as more contractors reach retirement age. But it is interesting to note that the percentage of contractors between 26 and 34 years old has increased.

Percentage of contractors in these age ranges.

Despite the older workforce, fewer contractors are planning to leave the industry in five years or less, down from 36 per cent in 2018 to 27 per cent in 2020. Of course, we also have to consider that a number of contractors may have retired in the past two years, which might also help explain this decrease. But, with 27 per cent of loggers still expecting to get out of the industry in five years or less, and 24 per cent planning to leave in six to 10 years, we can expect the logger landscape will look very different in the coming years.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

In CFI’s 2018 Contractor Survey, there were many positive signs in the B.C. Interior. But, there were also shadows that signified challenges ahead.

Now, in 2020, despite some encouraging demographic changes, Interior loggers are facing mounting difficulties: fewer contractors are reporting rate increases, the average harvesting volume has dropped drastically and operating costs are increasing. On the whole, this leads to lower profitability. While Interior contractors are still in a better position than their counterparts in the east, they are facing an uphill battle given the dwindling fibre supply, severe wildfires and changing government policies.

Here’s what B.C. Interior loggers reported:

Rates and profits

In 2018, the B.C. Interior was a bright spot with regards to logging rates, with 63 per cent reporting rate increases. But in 2020, that number dropped to 53 per cent, closer to the national number (45 per cent). This still places contractors in the B.C. Interior in second place when it comes to logging rate increases – only Alberta contractors fared better in 2020, with 63 per cent reporting a rate increase.

Meanwhile, a quarter of Interior loggers say logging rates have stayed the same. The more concerning news is that 14 per cent say their rates decreased, compared to 11 per cent in 2018. However, no Interior contractors report a rate decrease of more than five per cent.

When it comes to Interior loggers’ profit margins, the news is a bit better. Compared to CFI’s 2018 Contractor Survey, fewer Interior companies say they made no profit in the last year, down from 35 per cent in 2017 to 28 per cent in 2019. There was also a decrease in the number who say their profit was five per cent or less, from 43 per cent in 2017 to 28 per cent in 2019. More Interior loggers report a profit margin of six per cent or more – 27 per cent in 2019 compared to 20 per cent in 2017.

But, compared to 2015, when Interior contractors were among the most profitable in the country, they are now bested by both Coastal and Alberta contractors. The dwindling fibre supply and changing government regulations, along with increasingly high operating costs, likely contribute to this drop in profitability.

When it comes to cost centres, Interior loggers, like contractors nation-wide, report the cost of purchasing machinery and maintaining equipment has increased in the past three years. But the big change is in the cost of insurance – across the country, loggers report insurance has become a significantly bigger expense. In the Interior, 89 per cent rate insurance costs as higher than three years ago. The cost of labour is also continuing to increase in the Interior, with 59 per cent rating it as slightly higher.

And while the percentage of operations reporting lower fuel costs nation-wide rose from three per cent in 2018 to 22 per cent in 2020, 71 per cent of Interior loggers are still seeing their fuel costs go up. The only region where more contractors have seen increased fuel prices is Quebec, at 76 per cent.

Operator pay

The average operator pay across the country has also increased, from $29/hour in 2018 to $30/hour in 2020. The competition for labour in the western provinces rages on, with the B.C. Interior still in the top three for earning the most as a machine operator.

The percentage of Interior operations offering more than $30 an hour has increased from 59 per cent in 2018 to 61 per cent in 2020. The percentage offering $26-30 an hour has dropped a disproportionate amount, from 41 per cent in 2018 to 32 per cent in 2020. However, this can be explained by the increased number of respondents who say they don’t hire operators or drivers (seven per cent in 2020 compared to zero in 2018).

But, compared to the B.C. Coast and Alberta, Interior companies are offering less to operators. The estimated average operator wage in the Interior is $35 an hour, a small increase from $34 an hour in 2018. The estimated average on the Coast remains $37 an hour, and Alberta contractors have also upped their offering to $37 an hour.

However, more Interior operations offer some form of benefits to employees. The B.C. Interior is the place to be for operators looking for medical or dental insurance, with 82 per cent of contractors offering this benefit, compared to a national average of just 49 per cent. Another 39 per cent offer life insurance.

Company size

Just like in 2018, Interior companies on average produced the second-highest volumes in Canada, with Alberta coming out on top. However, the average volume for an Interior company has dropped drastically – from 237,000 cubic metres per year in 2018 to 167,000 cubic metres per year in 2020. This makes sense given the decreasing available fibre supply in the region thanks to the mountain pine beetle and wildfires.

This number is lower than the average volume in Alberta, but contractors in that region have also seen a big drop – from 398,000 cubic metres per year in 2018 to 233,000 cubic metres per year in 2020.

Despite this, Interior contractors are still bringing in much higher revenues than those in Alberta. The estimated average for the region is $6.038 million, compared to just $4.975 million in Alberta. The B.C. Coast comes in on top with an estimated average of $6.36 million. But, a higher percentage of Interior loggers report making more than $10 million (26 per cent) than on the Coast (21 per cent). More than one-third (41 per cent) make $2 to $5 million.

When it comes to fleet sizes, Interior loggers, like loggers across the country, are downsizing. While a large percentage (24 per cent) still have 21 to 50 machines in their fleet, more Interior loggers (35 per cent) report having 11 to 20 machines in their fleet. A healthy percentage report having four to 10 pieces. Unlike in 2018, when four per cent reported having more than 100 machines, zero Interior contractors report that size fleet this year.

Interior contractors still have the smallest staffs among their Western regional counterparts, at an average of 23 employees. Coastal loggers employ 24 people on average, while Alberta loggers employ 32. It should be noted that these numbers are significantly lower than the ones reported in 2018 – the average for the B.C. Interior then was 32; for the Coast it was 33 and for Alberta, it was 55. This makes sense given the higher costs of employing operators, as well as the smaller fleet size and harvesting volume. But, it does not bode well with regards to solving the skilled labour shortage the industry faces.

Contractor age

However, just like on the B.C. Coast, it appears that more young contractors are getting into the industry in the Interior. In 2018, the number of contractors under the age of 35 was just four per cent. Now that number has increased slightly to seven per cent. The majority of Interior contractors are between 46 and 55 years old (38 per cent) and nearly one-quarter (23 per cent) are between 36 and 45 years old.

Eighteen per cent of Interior contractors are over 65,  the same as the national average. But, these numbers are better than in 2018, when 23 per cent of Interior contractors were over 65, compared to the national average of 12 per cent. The average Interior contractor age is 52, the same as the national average, and slightly lower than on the B.C. Coast.

Breaking down the numbers further to look at just owners, partners, supervisor and managers, the trend is similar. Most Interior contractors in this category are between the ages of 46 and 55 (45 per cent), and nearly one-quarter (24 per cent) are between 36 and 45. The average Interior owner, partner, supervisor or manager is 50 years old, the same as the national average for this category.

There has also been a corresponding change with regards to how long Interior contractors plan to stay in the industry. Just 24 per cent plan to leave the industry in five years or less, a big drop from 47 per cent in 2018. A large percentage of Interior contractors (35 per cent) now plan to stay in the industry for six to 10 years, and the remaining 41 per cent plan to be in the industry for more than 10 years. This suggests that a transition is well underway in the Interior, better positioning the region for the future.

In contrast, 47 per cent of Coastal contractors and 36 per cent of Alberta contractors plan to exit the industry in five years or less, followed by 31.5 per cent in Atlantic Canada. While more than one-third of contractors in Alberta are under 35, just 12 per cent of Coastal contractors and 17.5 per cent of Atlantic Canada contractors fall under that category, a worrying sign for these regions.

Succession planning

In light of these demographic changes in the B.C. Interior, it’s not surprising that more contractors in the region say they do not have a succession plan. In 2018, just 23 per cent of Interior contractors said they didn’t have a plan for succession, compared to 28 per cent in 2020.

Nevertheless, this number is still much better than the national average of 36 per cent. Interior loggers are still very likely to have their children take over the business at 35 per cent, but Ontario contractors are the most likely, at 50 per cent. But nearly one-quarter of Interior contractors plan to sell their equipment and shut down, which indicates the industry might contract even more in the coming years.

When it comes to their kids taking over the business, Interior loggers are divided. On the one hand, 28 per cent have children currently working in the business who are likely to take over – the highest in the country. But, 21 per cent say they have no interest in their children getting involved in the business. Just seven per cent say their children are “unlikely” to be involved, compared to 26 per cent in 2018.

Future

Despite the encouraging demographic changes, the higher operating costs and lower harvesting volumes help explain why 90 per cent of Interior contractors say logging rates is the most important challenge to address in the next three years. Add to that the fact that fewer Interior contractors reported a rate increase in 2020, and it’s no wonder there’s concern.

The overall health of the Canadian forest industry is close behind, with 83 per cent rating it as an important challenge, likely because of the sawmill closures in 2019, the dwindling fibre supply in the region and changing stumpage rates. Seventy-two per cent also rate access to fibre and quality of fibre as a “very important” challenge in the next three years.

As one Interior logger puts it: “A simple solution to the dying and struggling contractor force is to increase rates, lower stumpage to help increase logging rates and […] make regulations less burdensome for logging contractors.”

This sentiment is reflected by the fact that 66 per cent of Interior contractors see improved co-operation with government as an opportunity to improve operations and/or profitability. As the Interior adjusts to a smaller fibre basket, in some cases transitioning from clear-cutting to more selective thinning operations, government support will be needed to ensure Interior contractors continue to be successful.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Since CFI’s 2016 Contractor Survey, contractors on the B.C. Coast have made a comeback. The B.C. government launched the Logging Contractor Sustainability Review shortly thereafter, outlining proposals to improve mill and contractor relations, and the 2018 Contractor Survey showed positive trends. Now, in 2020, the situation looks even better – on the surface, at least. Logging rates have improved for nearly half of all Coastal contractors, revenue is up, and more young people are entering the industry.

But challenges remain, such as higher operating costs, which lead to low profit margins, and regulatory issues including export policies and stumpage fees. These issues will need to be addressed to ensure the situation on the Coast improves for all contractors, not just the big players.

Contractors on the B.C. Coast, in general, reported the following:

Rates and profits

Across the country, just under half of all contractors (45 per cent) say their rates have increased, while 27 per cent say their rates have not changed in the past five years. This means that for the majority of contractors, rates are improving or holding steady.

This is especially the case on the B.C. Coast, where more than half of respondents (57 per cent) reported a rate increase compared to five years ago. This is a slight drop from 2018, when that number was 58 per cent, but still a huge increase from 2016, when it was just 39 per cent. Thirty-one per cent of respondents say rates have stayed the same.

While these numbers are positive, there is cause for concern, as 13 per cent of Coastal contractors report their rates have decreased by more than five per cent. In 2018, no contractors in the region reported a decrease this large. This might be a result of the eight-month long Western Forest Products strike on the Coast from July 2019 to February 2020.

But in comparison to contractors in Atlantic Canada, where just 14 per cent report an increase in rates, Coastal contractors are doing much better. Nation-wide, 43 per cent of contractors report a profit margin of three per cent or less, and 25 per cent report no profit – a small increase from 2018, when those numbers were 48 and 28 per cent, respectively.

With regards to profit, Coastal contractors continue to struggle, with 31 per cent making zero profit. Just 13 per cent report a profit higher than 10 per cent. The average profit margin on the B.C. Coast is 5.5 per cent, slightly higher than in the B.C. Interior.

In comparison, in Alberta, only 18 per cent of contractors report making no profit, and 36 per cent say their profit margin last year was higher than 11 per cent. The average profit margin there is 8.4 per cent.

To make sense of these numbers, we have to consider operating costs. Across Canada, it’s not just machinery that’s costing contractors money – insurance costs have skyrocketed compared to three years ago, likely as a side effect of the increased value of machinery.

On the B.C. Coast, 80 per cent of contractors say insurance costs have increased, while 64 per cent report the cost of buying machinery is significantly higher than three years ago. On top of that, 93 per cent of respondents say the cost of machinery parts/services has increased.

It’s not surprising then, that when asked how their profit margins compare to two years ago, more than half of all Coastal contractors (57 per cent) say profit margin is lower.

Operator pay

As a whole in Canada, operator pay is on the rise; the average salary is up slightly from $29/hour in 2018 to $30/hour in 2020. Coastal loggers continue to pay operators the highest wages, along with those in Alberta, at $37/hour. Just six per cent of Coastal contractors pay $30/hour or less.

In comparison, in Alberta, nine per cent pay $30/hour or less, and that number jumps to 32 per cent in the B.C. Interior. Heading east across the country, only Quebec loggers report paying operators more than $30/hour, although this is a very small percentage (three per cent).

But while operator pay is on the rise, operator benefits are declining, with 61 per cent of contractors nationally offering benefits to employees, compared to 66 per cent in 2018.

However, B.C. loggers are much more likely to offer benefits, with 75 per cent of Coastal companies offering some form of benefits. Like in 2018, only the B.C. Interior has a higher percentage, at 89 per cent.

Company size

B.C. Coastal loggers remain smaller than their western regional neighbours, but bigger than those in the eastern regions. The estimated average annual volume for Coastal companies is 164,000 m3, up slightly from 2018, when the average was 163,000 m3. In comparison, Alberta contractors have the largest estimated average output of 233,000 m3.

Nationally, when it comes to the number of employees per operation, the estimated average fell from 27 in 2018 to 19 in 2020.

But more contractors on the Coast have larger teams than in any other region – 31 per cent employ 21 to 50 people, and 13 per cent employ 51 to 100 people. The average number of employees on the Coast per operation is 24, the second largest behind Alberta. This is not surprising given the unique terrain on the Coast, which means more hand falling is required, as opposed to in the B.C. Interior and Alberta, where work is largely mechanized. Contractors on the B.C. Coast also have fewer machines on average than their western counterparts.

With lower machinery costs and maintenance requirements, and, therefore, presumably lower insurance costs, it makes sense that Coastal contractors have the highest average revenues in Canada, at an estimated $6.3 million. This is up from an estimated $5.3 million in 2018.

In comparison, the national average is down from $4.52 million in 2018 to $3.96 million in 2020. Contractors in the B.C. Interior come in at a close second at an estimated $6.0 million, while Alberta contractors’ revenues have dropped to $4.975 million.

Contractor age

Just like in 2018, the average contractor age in B.C. is over 50. In fact, Coastal contractors are the oldest on average across the country. Forty-eight per cent of contractors are 56 or older, and 42 per cent are between 36 and 55 years old. There has been an increase in the percentage of contractors under 35, from four per cent in 2018 to 11 per cent in 2020.

When it comes to owners, partners, managers and supervisors , 42 per cent are 56 or older, and 46 per cent are between 36 and 55 years old. Another 30 per cent are under 35, a good sign that more young people are getting into management positions and will be prepared to run businesses for years to come.

It’s a good sign that more young people seem to be getting into the industry and view forestry as a good career choice, likely because of the high operator pay and benefits in the region. Programs like Project Learning Tree Canada’s Green Jobs and other efforts from organizations in the province, as well as funds from government, have likely helped encourage more young people into the industry.

However, with nearly half of all Coastal contractors (47 per cent) saying they plan to exit the industry in five years or less, more work needs to be done to get younger people into the industry, especially given that just three per cent of respondents in the region are between 16 and 25 years old. This is a key demographic that needs to be represented in order to ensure the success of the industry for generations to come.

Succession planning

The need to get students and more young adults involved in the industry as a whole is particularly pressing given that 36 per cent of contractors nationwide say they do not have a succession plan.

The B.C. Coast comes in just under the national average, with 35 per cent saying they do not have a succession plan, down from 39 per cent in 2018. Eighteen per cent of Coastal contractors expect their children to take over, while another 18 per cent say they will sell their equipment and shutdown (both up slightly from 15 per cent in 2018). Another 12 per cent say they have managers interested in or planning on taking over, and 12 per cent expect to sell to another contractor.

Despite the larger number of contractors expecting their children to take over, it’s unlikely to happen for many of them – 14 per cent of contractors have their kids working for them but no plan for their takeover and 35 per cent of Coastal contractors say their kids are unlikely to be involved and/or acquire the operation.

Future

While the data from CFI’s 2020 Contractor Survey suggests that Coastal contractors are making a comeback given the stable/increasing logging rates, high revenues, and more young people entering the industry, they are also the most concerned about the future of forestry – and rightfully so.

In the wake of multiple sawmill shutdowns in 2019 due to weak lumber markets and dwindling fibre supply, the eight-month long Western Forest Products strike, and regulatory changes in B.C., the future is uncertain. Add COVID-19 into the mix, and it’s no wonder 88 per cent of Coastal contractors are concerned about the overall health of the Canadian forest industry. The same number are concerned about logging rates, while 71 per cent are worried about the ability to maintain or improve their productivity and 69 per cent are troubled by access to or quality of fibre.

Coastal contractors are also still among the most concerned about improving co-operation between government and forestry companies, with 88 per cent rating this as the greatest opportunity to improve operations and/or profitability, compared to 66 per cent nationwide.

Despite the progress made since 2016, it’s clear there are still many challenges facing contractors on the B.C. Coast, and wide-reaching, systemic change is needed.

As one Coastal logger put it: “Smaller companies need better access to their own fibre. Government should make more small tenures that exclude larger corporations to give smaller producers the ability to send wood to niche markets and maximize value, create innovations on a local scale. First Nations opportunities do not appear as lucrative or available as they’re meant to be. It seems larger corporations are the only ones able to attract attention and acquire any significant partnership deals.”

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

“Capital depreciation on equipment is the biggest concern, and the forest companies don’t seem to get it.”

“Lack of total 100 per cent investment in government provincially and federally to make a shift towards uneven aged stand management and wildfire fuel reduction through massive thinning projects. Too many big tenure holders unloading our provinces’ fibre wealth while the contractors and mill workers make a living wage. Total destruction of our land base for very little local economic gains. Climate change is upon us and they’re still raping the hillside and people are still losing jobs and companies are going broke while massive corporate share holder dividends are paid out. […] Save our workers and our land base from total liquidation and involve our First Nations more, build fibre wealth like Scandanavian countries do/did. Free the land base for wood lots, give the people back the power to grow jobs and real economic change. These giants – Canfor, Interfor, West Fraser, Tolko, the list is long ¬– they have ruined our competitively Canadian advantage by liquidation of our most precious resource and jobs.”

“Looks bleak as the licensees have driven down rates and contract conditions to the point where there is no return in the business, hence no entrants can access financing for purchasing.”

“Mills have closed in N.S. due to shut down of Northern Pulp. No market for wood at present.”

“Specific to our area, we’re in challenging times not having a pulp market due to the closure of Northern Pulp in Pictou County.”

“Tenure reform in B.C. to address the current monopoly licensees have. Increase in volume for BCTS, less volume for licensees. Completion of the contractor sustainability review.”

“The biggest challenge for young people in this industry is no financial institutions want to work with young people to allow for new contractors.”

“The N.S. Gov’t closed our pulp mill and we need a Gov’t committed to getting the pulp mill up and running as we desperately need a pulp market.”

“I don’t enjoy any of it anymore. Work long days, risk everything I have for a marginal salary and no profits. Logging contracting is a terrible business venture.”

“Simple solution to dying and struggling contractor force is to increase rates, lower stumpage to help increase logging rates and simplify regulations and make regulations less burdensome for logging contractors.”

“Smaller companies need better access to their own fibre. Government should make more small tenures that exclude larger corporations to give smaller producers the ability to send wood to niche markets and maximize value, create innovations on a local scale. First Nations opportunities do not appear as lucrative or available as they’re meant to be. It seems larger corporations are the only ones able to attract attention and acquire any significant partnership deals.”

“[Opportunities exist around] Increased logging rates, lowering of stumpage and less regulations and regulatory requirements to be met.”

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Since these questions were posed in the spring, the lumber market has rebounded, with record-high prices for lumber and strong demand that has not yet dropped off.

But, at the time, when asked about how concerned they were about the impact of COVID-19 on their business, over half of loggers (56 per cent) rated their level of concern at either a six or seven out of seven.

Only seven per cent of those surveyed had little to no concern about the pandemic’s effects, with the rest falling somewhere in between.

Percentage of contractors concerned about the impact of COVID-19 by level, out of seven.

Loggers in B.C. and Ontario are the most concerned. Nearly three-quarters (72 per cent) of loggers in the B.C. Interior rate their level of concern as a six or seven out of seven, followed by 60 per cent of loggers in Ontario and 59 per cent of loggers in the B.C. Coast.

Contractors in Alberta are least concerned, with just 44 per cent rating their level of concern as a six or seven out of seven.

Percentage of loggers concerned about the impact of COVID-19, by level and by region.

When it comes to the operational impact of COVID-19, the majority of loggers say they expect to see an impact on their business/revenue (85 per cent). Nearly half (49 per cent) say they expect to see staffing cuts or layoffs. Another 36 per cent say they expect to see reduced productivity from staff.

Percentage of contractors who expect this type of operational impact because of COVID-19.

Regionally, more loggers in the Western provinces were expected to see an impact on their business/revenue – 90 per cent in the B.C. Coast, 97 per cent of loggers in the B.C. Interior and 94 per cent in Alberta. In contrast, loggers in the Eastern provinces (Quebec and Atlantic Canada) were less likely to expect an impact on their business/revenue (78 per cent and 78.5 per cent, respectively). They were also less likely to expect there to be staffing cuts or layoffs (32 per cent and 37.5 per cent, respectively). This might be because loggers in Quebec and Atlantic Canada typically run smaller operations compared to those on the West coast.

Percentage of contractors who expect this type of operational impact because of COVID-19, by region.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

According to the results of CFI’s 2020 Contractor Survey, the number of contractors supplying to more than five mills has increased slightly from 15 per cent in 2018 to 16 per cent in 2020.

Correspondingly, the number of contractors who supply only one mill has decreased from 19 per cent in 2018 to 16 per cent in 2020. This is a sharp drop compared to 2016, when that number was 36 per cent.

A good number of loggers (22 per cent) say they supply to three mills, compared to 19 per cent in 2018. But there are fewer contractors who supply four or five mills – nine per cent and five per cent, respectively. This drop might be because a higher number of sub-contractors responded to the survey this year than in 2018.

Percentage of contractors reporting customer numbers for timber or other products.

Regionally, just as in 2018, contractors in the east have more customers than those in the west. Loggers in Atlantic Canada continue to have the most options when it comes to mills vying for their fibre – 41.5 per cent of contractors have five or more customers for their logs or wood products such as biomass or pulp chips. This is nearly the same number as in 2018 (42 per cent).

No loggers in Atlantic Canada report supplying just one mill, compared to 11 per cent in 2018. This change might be explained by the shutdown of Northern Pulp in January. But, the numbers aren’t really a surprise given the number of small, family-owned operations in this relatively small region.

Ontario contractors come in second place with regards to the number of customers, with 31 per cent supplying five or more mills. Slightly more loggers in the province – 32 per cent- supply one or two customers, a sizeable decrease from 50 per cent in 2018.

In Quebec, the trend is not as easy to spot: 23 per cent of loggers have five or more customers, another 23 per cent supply to just one mill, and 20 per cent supply to three mills.

Meanwhile, contractors in Alberta seem to deal with the fewest mills, with more than half of respondents – 55 per cent – supplying two mills, and none supplying five or more. In comparison, in 2018, seven per cent of Alberta loggers said they had five or more customers. These numbers suggest the region is struggling to find more customers for their fibre, a worrying sign for the industry.

Next door in the B.C. Interior, the majority of loggers report supplying to three customers (45 per cent), with just six per cent saying they supply to four or more contractors. The market seems to be diversifying, as just 35 per cent supply to one or two customers, a decrease from the 50 per cent in 2018.

Results from the survey also suggest that the log market is diversifying in the B.C. Coast: 18 per cent of loggers say they supply to just one mill, down from the 31 per cent who said so in 2018. Most contractors in the region say they supply to two or three mills (47 per cent), while just 12 per cent supply to more than five. But, these numbers should be taken with a grain of salt, given that 24 per cent of respondents are sub-contractors compared to zero per cent in 2018.

Percentage of contractors reporting customer numbers, by region.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

But, if you’ve ever asked anyone who works in forestry why they enjoy the job, two out of three times, the answer will be the ability to work outdoors. The results of CFI’s 2020 Contractor Survey reinforce that idea, with a higher percentage of loggers saying they enjoy working in the woods the most (66 per cent) compared to in 2018 (57 per cent).

This is followed closely by the independence logging gives them (45 per cent) and the variety and challenge of the role (42 per cent).

Financial compensation remains the least likely aspect loggers enjoy, but this number has improved since 2018: 19 per cent say they enjoy it, compared to 10 per cent in 2018. Respondents in Ontario and Quebec are still the least likely to choose this answer, at seven per cent and three per cent, respectively, but this is an uptick from zero per cent two years ago.

Percentage of respondents who say they enjoy these parks of the job, by region.

Despite that, 72 per cent of loggers say that financial compensation is the most important part of the industry to improve in order to attract replacement contractors. This is a slight drop from 2018, when that number was 74 per cent.

However, employment stability has risen to the second-most important part that needs to improve, reflecting the uncertainty that plagued the industry in 2019 and the first half of 2020. It’s no surprise that more loggers in B.C. rated this as important (55 per cent in the B.C. Interior and 53 per cent in the B.C. Coast) than in any other province, given the dwindling fibre supply, pests, and wildfires the region faced last year. This, in conjunction with weak lumber markets, led many B.C. sawmills to shut down, reducing demand for loggers.

But this might also explain why loggers view co-operation with wood buyers as less important than they did in 2018, with just 34 per cent saying it needs to improve in 2020 compared to 40 per cent two years ago.

Interestingly, workload has jumped in importance, with 32 per cent of loggers saying this needs to be improve in order to attract replacement contractors, despite contractors running their operations for a shorter period of time on average.

Access to finance is also seen as more important, with 24 per cent of respondents saying this needs to improve, as opposed to 16 per cent in 2018 – reflecting the ongoing rise in operating costs.

Percentage of contractors who identify these parts of the business that need improvement in order to attract replacement contractors.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

For years now, members of the Canadian forest industry have been discussing the challenge of an aging workforce, and who will replace loggers as they retire. As reported in last week’s survey snippet, the average Canadian contractor is now 52 years old, and while there are glimmers of hope that more young people are entering the industry, this doesn’t mean owners don’t need to have a succession plan in place to keep the company around.

Despite the higher average age, results from CFI’s 2020 Contractor Survey show that more loggers expect to spend more than 20 years in the industry than in 2018. Although not at 2016 levels, 17 per cent of contractors expect to stay in the industry for more than 20 years, compared to 14 per cent in 2018.

Most contractors plan to stay in the industry for six to 10 years (24 per cent), compared to 19 per cent in 2018. Fewer contractors, on average, plan to spend less than five years in the industry (27 per cent). There was a corresponding drop in the number of contractors who will stay 16-20 years – 13 per cent compared to 18 per cent in 2018.

However, more loggers in B.C. plan to retire in 10 years or less than in 2018. In the B.C. Interior, the percentage has jumped from 47 per cent in 2018 to 59 per cent in 2020, and in the B.C. Coast, the number has risen from 46 per cent to 53 per cent. This is likely a result of the weak lumber markets in 2019 and challenging fibre supply that saw many B.C. sawmills shut down. With fewer mills, loggers have a harder time getting their products to market.

Alberta has also seen an increase in the percentage of contractors looking to leave the industry in 10 years or less, now at 54 per cent.

But the largest change is in Ontario, where 63 per cent of respondents say they will leave the industry within the next 10 years, compared to just 33 per cent in 2018. This might be explained by the jump in operating costs in the region.

Quebec and Atlantic Canada are the only regions where the majority of contractors plan to be in the industry for longer than 10 years, at 58 per cent and 52.5 per cent, respectively.

Percentage of contractors who report these expected retirement times, by region.

These retirement numbers are somewhat more concerning than the results from our 2018 survey, but, the good news is there are fewer loggers who have no plan for the business to live on. In 2018, 40 per cent of contractors said they had no plan for the company after they retire; in 2020, that number has dropped slightly to 36 per cent.

Similar to 2016, more contractors are willing or able to have their children take over, at 26 per cent, compared to 20 per cent in 2018. However, slightly fewer have managers interested in taking over: five per cent in 2020 compared to six per cent in 2018.

Ultimately, 69 per cent of loggers have no real plan for their business, a drop from 74 per cent in 2018. There has been a slight increase in the number planning to auction their fleet and shut down (22 per cent versus 20 per cent in 2018), but a drop in the number who expect to sell to another contractor (seven per cent versus 13 per cent in 2018).

See how the numbers compare in the chart below.

Percentage of contractors who plan to take these steps when they retire.

Unlike in 2018, when 76 per cent of loggers in Ontario had no succession plan, now 50 per cent expect their kids to take over. This makes sense given the jump in the number of contractors in the province planning to exit the industry within 10 years.

Instead, loggers in Quebec are least likely to have a succession plan (50 per cent), followed by Atlantic Canada (46.5 per cent) and Alberta (46 per cent), which aligns with the larger number of respondents planning to stay in the industry for 16 years or more.

Contractors in B.C., meanwhile, are more evenly split between expecting children to assume control, selling off equipment or no succession plan.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Just four per cent of contractors will be replacing 11 or more machines, compared to six per cent in 2018. The majority of loggers are planning to replace three to five machines (34 per cent) followed by loggers planning to replace two machines (21 per cent).

Percentage of contractors planning to replace machinery within two years.

There was a corresponding decrease in the number of contractors planning to replace six to 10 machines – seven per cent compared to 17 per cent in 2018. These numbers are closer to the numbers seen in our 2016 survey, although fewer contractors plan to replace more than six machines.

Percentage of contractors planning to replace machinery within two years in 2016, 2018 and 2020.

Regionally, while Atlantic Canada still has the highest percentage of contractors who do not plan to replace any machines (29.5 per cent), Alberta comes in second, at 27 per cent, followed by Quebec, at 23 per cent.

While contractors in Alberta still have the largest fleets, it’s contractors in the B.C. Interior that plan to replace the most machines, with 20 per cent planning to replace six or more. Alberta again comes in second, at 18 per cent. The majority of contractors in Alberta (36 per cent) plan to replace three to five machines.

The B.C. Interior also has the highest percentage of contractors planning to replace three to 10 machines (62 per cent), with just 17 per cent saying they will replace no machines. Meanwhile, 56 per cent of loggers in Ontario plan to replace three to five machines in the next two years, followed by 32 per cent that plan to replace one to two.

Like in 2018, Quebec still has the largest percentage of contractors planning to replace one to two machines (47 per cent). But the B.C. Coast and Atlantic Canada also have a large percentage of contractors in this category – 41 per cent each.

Percentage of contractors planning to replace machinery within two years, by region.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Keeping costs down is key as profit margins become narrower, and decreasing the size of the fleet can also help in this regard.

Just as in 2018, a quarter of loggers who took part in CFI’s 2020 Contractor Survey say they have one to three pieces of equipment (excluding pick-up trucks). The bigger change is in the number of operations that have between seven and 10 machines – 21 per cent of respondents have a fleet of this size, compared to 15 per cent in 2018.

The has also been a slight increase in the number of operations who report having four to six machines – 13 per cent compared in 2020 to 11 per cent in 2018. The corresponding drop is seen among those who own 11 to 20 machines (down three per cent to 19 per cent), those who have 51 to 100 machines (down seven per cent to just three per cent) and those who have more than 100 machines (zero per cent). See how the numbers compare in the chart below.

Percentage of contractors who report machine numbers, excluding pick-ups.

Regionally, contractors in Alberta have the largest fleets, with an estimated 25 pieces of equipment. The majority of loggers (36 per cent) in the province own 21 to 50 machines, 18 per cent own 11 to 20 machines and 27 per cent own seven to 10 machines. Operators in the B.C. Interior come in a close second, with an estimated average of 19 pieces of equipment; 35 per cent of say they own 11 to 20 machines while another 24 per cent own 21 to 50 machines.

Contractors in Ontario come in third, with an estimated average of 18 pieces of equipment. The majority (50 per cent) own between seven and 20 pieces of equipment, followed closely by those who own 21 to 50 machines (19 per cent) and those with one to three machines (19 per cent).

Contractors on the B.C. Coast are limited to fewer than 50 machines. The estimated average fleet size for loggers in this region has dropped to just 16 machines, with the majority (31 per cent) of contractors owning 11 to 20 machines.

In 2020, even more contractors in Quebec own just one to three machines than in 2018 (58 per cent versus 52 per cent). The average estimated pieces of equipment in Quebec, however, is just slightly higher than in Atlantic Canada (seven pieces versus six). This is because in Atlantic Canada, no loggers own more than 20 pieces of machines (compared to six per cent in Quebec). The majority of contractors in Atlantic Canada (41 per cent) own seven to 10, while 34 per cent own between one and three pieces of equipment. See the regional breakdown in the chart below.

Percentage of contractors who report machine numbers, excluding pick-ups, by region.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Results from CFI’s 2020 Contractor Survey show that the number of operations harvesting 31-40 weeks jumped up from 28 per cent in 2018 to 40 per cent in 2020. This is close to 2016 levels, when 45 per cent reported the same operating season.

Correspondingly, there was a drop in the number of year-round or almost-year-round operations, from 54 per cent in 2018 to 44 per cent in 2020 – again, close to 2016 levels (44 per cent).

The number of companies harvesting under 30 weeks remains relatively unchanged across all three survey years. Ten per cent run 21-30 weeks, and just six per cent run fewer than 20 weeks.

Regionally, just like in 2018, Quebec has the highest portion of contractors operating fewer than 20 weeks per year, at 13 per cent, followed by Atlantic Canada at 10 per cent.

More than half of all contractors in the B.C. Coast, Ontario and Atlantic Canada operate at least 41 weeks of the year. However, in the B.C. Interior and Alberta, the majority (72 per cent and 64 per cent, respectively) work 31-40 weeks per year.

Percentage of contractors who report operating in these week ranges each year.

With regards to weekly hours, the percentage of operations working 31-50 hours per week has jumped from 16 per cent in 2018 to 26 per cent in 2020. The percentage of operations that run more than 70 hours per week has continued to drop from 46 per cent in 2016 to 40 per cent in 2018 and now 35 per cent in 2020.

More than one-third of contractors continue to operate 51-70 hours per week. Five per cent work more than 130 hours in a week. While the majority of contractors working more than 130 hours per week are in Alberta (30 per cent), a small percentage of contractors from Ontario (six per cent), Quebec (three per cent) and the B.C. Coast (three per cent) also report doing so. This is possibly as a result of climate change, which has led to shorter operating seasons in some regions.

Percentage of contractors who report running these hours each week.

Personal workload

Given that operations aren’t running as long as they were in 2018, one would think that crews would be working fewer hours in a typical week. But when asked about their personal workload, the numbers continue to be very close to the results in 2018 and 2016. There was a tiny drop in the largest category, with 58 per cent of loggers working more than 55 hours per week in 2020 compared to 59 per cent in 2018 and 61 per cent in 2016.

There was also a slight drop in the percentage of contractors working 51-55 hours per week (10 per cent in 2020 compared to 12 per cent in 2018), but the biggest change is in the 46-50 hour per week category. In 2020, 15 per cent of respondents report working 46-50 hours on a weekly basis, compared to 10 per cent in 2018 and seven per cent in 2016.

On a regional basis, just as in 2018, more loggers in Alberta report working more than 55 hours per week (91 per cent), followed by loggers in the B.C. Interior (62 per cent). Quebec saw a big jump with 47 per cent of loggers working more than 55 hours compared to 39 per cent in 2018. In contrast, the number of loggers working more than 55 hours dropped in the B.C. Coast from 46 per cent in 2018 to 38 per cent, making it the region with the most contractors working “reasonable” hours.

Percentage of contractors working more than 55 hours per week.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

When asked how much their main cost centres have changed in the past three years, nearly half (46 per cent) of loggers say insurance costs have increased significantly compared to just 12 per cent in 2018. Another 46 per cent say insurance costs have increased slightly.

Regionally, 100 per cent of contractors in Ontario and Atlantic Canada say insurance costs are higher than three years ago, followed by 90 per cent in Alberta, 89 per cent in the B.C. Interior, 87 per cent in Quebec and 80 per cent in the B.C. Coast. This increase could be due to a number of reasons, including the risks posed by COVID-19 and more severe, longer wildfire seasons that threaten operations.

Respondents also say machinery purchases, as well as parts and services, have increased significantly, though the percentage of contractors who say so has dropped slightly compared to 2018.

We also asked contractors to rate the cost of labour, hauling, fuel, supervision and finance. Overall, every category of costs has increased for approximately half of all contractors. See a breakdown of results below.

Percentage of respondents who feel costs have increased either significantly or slightly.

For most categories – gear cost, parts/service, hauling and supervision – these numbers are similar to what we saw in our 2018 Contractor Survey. But there are a few significant changes.

As mentioned above, the cost of insurance has increased dramatically. But, there is some relief for contractors – the cost of fuel is no longer as problematic as it was in 2018. In 2018, 53 per cent of respondents rated fuel costs as rising significantly and another 39 per cent said it had increased slightly. In 2020, just 28 per cent of respondents say fuel costs are rising significantly, and 33 per cent say it has increased slightly. Correspondingly, the percentage of respondents who rate fuel costs as lower than three years ago is up from three per cent in 2018 to 22 per cent in 2020.

Another significant change is that fewer operations rate financing costs as increasing (49 per cent versus 60 per cent in 2018). A larger percentage of respondents say financing costs are the same as three years ago (37 per cent) or lower (14 per cent).

These changes might help explain why operators are potentially seeing their profit margins slowly inching upwards, despite the other increasing cost centres.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Results from this year’s survey found that 61 per cent of companies offer some benefits to employees, with just under half (49 per cent) offering medical and dental insurance. Thirty per cent offer life insurance; 17 per cent provide paid vacation days beyond the legal minimum; 13 per cent match pension plans; 11 per cent provide paid sick/personal days; three per cent offer profit sharing; and five per cent offer benefits.

In contrast, our 2018 Contractor Survey found that 66 per cent of contractors offered benefits to employees, and the majority (61 per cent) offered medical and dental insurance. Although there is a slight increase in the number of companies offering paid vacation days beyond the legal minimum and paid sick/personal days, on average fewer companies are offering benefits in general. See how the numbers compare in the chart below.

Percentage of respondents who offer these benefits.

Operator benefits become less common as one moves West to East. Just like in 2018, operator benefits are most common in B.C., with 89 per cent of companies in the B.C. Interior offering some form of benefits, followed by 75 per cent in the B.C. Coast. These benefits are in addition to having some of the highest wages in the country for machine operators and drivers.

The majority of companies in Alberta also provide employee benefits (64 per cent). That province also has the highest number of companies offering profit sharing (18 per cent).

Unlike in 2018, when a strong majority of contractors in Ontario also offered benefits (83 per cent), less than half (44 per cent) provide benefits in 2020.

Just 43 per cent of companies in Quebec report providing employee benefits, down slightly from 45 per cent in 2018. Those that do are most likely to provide medical and dental insurance (23 per cent).

Bucking the trend for the rest of the country, more companies in Atlantic Canada reported providing employee benefits in 2020 (46.5 per cent) compared to in 2018 (37 per cent).

Percentage of contractors who offer some form of benefits to staff.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Operators in the B.C. Coast continue to earn the most, but now operators in Alberta are also in the top bracket – both provinces have an average rate of $37 per hour.

Following the trend from 2018, operators’ rates decrease as you move east, with operators in Atlantic Canada earning the least (on average, $22.50/hour). But overall, the estimated average rate in all provinces either increased or remained the same as in 2018. These reported rates do not include benefits.

Estimates of contractor wages per hour based on the average of all responses.

But, the difference in rates from province to province is extremely noticeable when the data is broken down into wage ranges.

In the Western provinces, no contractors pay less than $26 per hour. In the B.C. Coast, 94 per cent of contractors pay over $30/hour, while the remaining six per cent pay $26-$30/hour. Alberta comes in a close second, with 91 per cent of contractors paying over $30/hour and the remaining nine per cent paying $26-$30/hour. In the B.C. Interior, a higher percentage of contractors pay $26-$30/hour (32 per cent) but the majority (61 per cent) still pay over $30/hour.

These numbers make sense given the nationwide labour shortage of operators and drivers, as well as the competition from other industries in the region such as oil and gas and mining.

Meanwhile, in Ontario, no contractors pay less than $21 per hour; half pay $26-$30 per hour, as in 2018. However, unlike in 2018, when zero per cent reported paying more than $30/hour, 19 per cent said so this year. On the whole, wage ranges in Ontario have increased.

But in Quebec, operator rates vary much more drastically than in 2018. Seven per cent earn $16-$20/hour, while three per cent earn over $30/hour. The bulk of contractors pay $21-$25/hour (38 per cent), followed closely by $26-$30/hour (35 per cent).

Jobs continue to be harder to find in Atlantic Canada, especially given the closure of Northern Pulp in Nova Scotia earlier this year. While the estimated average rate for Atlantic Canada’s operators has increased, the region is still the only one in the country where operators earn less than $16 per hour (25 per cent). No operators earn more than $30/hour. Nearly half (49.5 per cent) make $21-25/hour, with another 24.5 per cent earning $26-$30/hour.

Percentage of respondents reporting operator rates by region.

In comparison to the results from our 2018 survey, more operators are now making over $26/hour (67 per cent in 2020 versus 62 per cent in 2018). While the number of operators making $16-$20/hour has dropped quite a bit from 13 per cent in 2018 to four per cent in 2020, more operators are also making $21-$25 per hour (22 per cent compared to 18 per cent in 2018).

However, a handful more contractors reported earning $11-$15/hour (two per cent versus zero per cent in 2018), likely as a result of the challenges in Nova Scotia. Six per cent of the 2020 respondents say they do not hire operators/drivers.

Percentage of respondents reporting operator/driver rates in these ranges.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

In 2018, 48 per cent of respondents said last year’s profit margin was three per cent or less, with 28 per cent reporting no profit at all. This year’s numbers showed a small improvement, with 43 per cent reporting a profit margin of three per cent or less, and 25 per cent claiming to have made no profit. (We defined profit margin as return on revenue as a percentage, or profit before income tax divided by total revenue. E.g., $5,000 of profit on $100,000 of revenue is a five per cent profit margin).

This is still a much higher number of contractors reporting low profit margins compared to 2016, when 38 per cent made three per cent or less, with just 17 per cent reporting no profit in 2015. The chart below outlines how the numbers compare across all three years.

Percentage of contractors reporting these profit margins the year before.

The number of contractors who earn profit margins of between three and 10 per cent remained nearly the same as in 2018. Meanwhile, the number reporting a profit margin of 16-20 per cent increased slightly from four per cent in 2018 to seven per cent in 2020. Across the country, the average profit margin rose from 4.5 per cent in 2018 to 5.0 per cent in 2020.

Percentage of contractors reporting profit margins by region.

These numbers suggest contractors’ profit margins are slowly inching upwards, but it is not enough to tip the scales towards a favourable outlook for the industry.

Regionally, Alberta and Quebec still seem to be the most profitable regions, just like in 2018, with the fewest contractors reporting no profit – 18 per cent and 19 per cent, respectively. The majority of contractors in Alberta (36 per cent) say their profit margin last year was higher than 11 per cent, while 27 per cent claim a profit margin between six and 10 per cent.

Contractors in Alberta also reported the highest average profit margin at 8.4 per cent, while Quebec contractors came in second highest at 5.6 per cent. But numbers in Quebec seem to be decreasing slightly, with just 17 per cent reporting profit margin above 11 per cent, and the majority (26 per cent) reporting a profit margin of three to five per cent.

Ontario still has the highest number of respondents reporting no profit last year, at 38 per cent, but this is down dramatically from the 67 per cent who said so in 2018. The more alarming news is that no contractors are reporting a profit margin higher than five per cent and the average profit margin among respondents is just two per cent.

A large number of contractors in the B.C. Coast and B.C. Interior are also struggling to make a profit, with 31 per cent and 28 per cent, respectively, making zero profit. However, 19 per cent and 13 per cent, respectively, report a profit higher than 10 per cent. The average profit margin in the B.C. Coast is 5.5 per cent, while in the B.C. Interior it’s slightly lower, at 4.7 per cent.

These numbers are concerning given that 70 per cent of contractors feel 11 per cent or more is a fair profit margin, when just 15 per cent are making that cut.

Given all of the challenges contractors have faced in the past two years, it’s not surprising that, when asked how their profit margins compare to two years ago, 38 per cent of contractors say it is slightly or significantly lower. Another 41 per cent say it is a similar range. Only 11 per cent report slightly or significantly higher profit margins, while another 10 per cent elected not to say or did not know.

Percentage of contractors who fall into each range.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Since 2016, we have been asking CFI Contractor Survey respondents what a fair profit range is for an established, productive logging contractor. We defined profit margin as return on revenue as a percentage, or profit before income tax divided by total revenue. E.g., $5,000 of profit on $100,000 of revenue is a five per cent profit margin.

In 2018, 14 per cent of contractors felt above 20 per cent is a fair profit. But this year, just eight per cent see that as a fair profit. The majority – 45 per cent – believe a profit range of 11-16 per cent is fair.

But by combining all responses that feel 11 per cent or more is fair (see chart), it is clear that, just as with logging rate increases, contractors’ expectations differ drastically from province to province.

In Ontario, only 50 per cent of those surveyed feel a fair profit is 11 per cent or more. In comparison, a full 100 per cent of contractors surveyed in Alberta and 95 per cent of contractors on the B.C. Coast believe 11 per cent or more is fair.

Atlantic Canada, which in 2018 had the lowest expectations for profit, recorded a slight uptick, with 51 per cent of respondents saying 11 per cent or more is a fair profit range. The numbers in Quebec stayed the same as in 2018 (61 per cent). In the B.C. Interior, 75 per cent of respondents feel a fair profit range is 11 per cent or more, a slight drop from the 78 per cent who said so in 2018.

Across all three surveys, we asked mill woodlands staff the same questions. As in previous years, two-thirds of woodlands staff feel a fair profit margin is between six and 15 per cent for an established contractor. Similar to contractor responses, the number of respondents who feel above 20 per cent is fair has dropped, from 17 per cent in 2018 to eight per cent in 2020. There is a notable increase in the percentage who believe a fair profit range is three to five per cent – from two per cent in 2018 to eight per cent.

Percentage of respondents who feel 11 per cent or more is a fair profit margin.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2020 Contractor Survey in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Meanwhile, 45 per cent of contractors said their rates have increased – just one per cent higher than in 2018. This means that for the majority of contractors, logging rates are either increasing or holding steady.

But, there was a slight increase in the percentage of contractors who say their rates have decreased – 14 per cent compared to 11 per cent in 2018. This is still much better than in 2016, when 23 per cent said their rates had decreased. Fifteen per cent of respondents reported that they were either too new to compare rates or did not know.

These numbers differ greatly from East to West. In general, contractors in the western provinces have had better success negotiating rates, with those in Alberta coming out on top – 63 per cent of contractors in the province reported an increase in rates, and only nine per cent reported a decrease in 2020. More than half of all contractors in the B.C. Coast and Interior B.C. reported a rate increase – 57 per cent and 53 per cent, respectively.

However, the number of contractors who say rates have decreased has also gone up. In the B.C. Coast, 13 per cent reported a decrease of more than five per cent, while in Interior B.C., 14 per cent reported a decrease of three to five per cent. This change might be as a result of the long Western Forest Products strike on the Coast, which lasted for eight months.

Similarly, 12 per cent of contractors in Ontario reported rates had decreased by five per cent or less. But 50 per cent reported an increase, while 31 per cent said rates have held steady.

Quebec had the lowest percentage of contractors reporting a decrease in rates at just six per cent, but only 40 per cent reported an increase, while 17 per cent said rates have stayed the same. A large number of respondents from the province – 34 per cent – either didn’t know or were too new to compare rates.

News in Atlantic Canada has not improved since 2018, especially in Nova Scotia, where the Northern Pulp closure has severely impacted the industry. In 2018, 17 per cent of contractors in Atlantic Canada reported lower rates compared to five years ago. In 2020, that number has jumped to 28.5 per cent.

The region also had the highest percentage of contractors reporting that rates have not changed, at 46.5 per cent, similar to 2018, when 47 per cent said rates were the same. The outlook in Atlantic Canada is bleak, with only 14 per cent reporting an increase in rates. In Nova Scotia alone, zero per cent of contractors reported an increase.

Percentage of contractors reporting some rate increase compared to 2018 and 2016.

Look for more news from the CFI 2020 Contractor Survey on www.woodbusiness.ca and in our eNews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free eNews to get all the latest industry news.

This survey was conducted in April and May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

Editor’s note: An earlier version of this article incorrectly stated that 28 per cent of contractors in Atlantic Canada reported a rate increase. The correct number is 14 per cent. CFI apologizes for this error.

Survey snippet 1: Logging rate increases vary

Survey snippet 2: Profit expectations drop

Survey snippet 3: Contractor profit margins inch upwards?

Survey snippet 4: Operators’ earnings on the rise

Survey snippet 5: Operator benefits decline

Survey snippet 6: Operating costs keep climbing

Survey snippet 7: Logger work-life balance

Survey snippet 8: Contractors downsize their fleets

Survey snippet 9: Updating the fleet

Survey snippet 10: An older workforce

Survey snippet 11: What’s the succession plan?

Survey snippet 12: The benefits of being a logger

Survey snippet 13: Log market continues diversifying

Survey snippet 14: The impact of COVID-19

Survey snippet 15: What are contractors saying?

This survey was conducted in May 2020 by independent research firm Bramm & Associates, generating 271 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 44 per cent of respondents in Western Canada, 26 per cent in Quebec and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C., responses were split between the B.C. Coast and Interior. Many thanks to our sponsors for making this research possible – Hultdins, Tigercat and John Deere.

In order to get a better understanding of the state of the Canadian logging contractor, we need your help! Please take 10 minutes to carefully complete the survey. CFI and its sister publication, Operations forestières, has been conducting this survey on a biannual basis since 2016. It only takes a few minutes to keep the conversation going!

We are using an independent research firm so no one, including ourselves, will ever see the raw data. We will only report on aggregated results.

You can also enter for a chance to win a Garmin field GPS.

Fill out the survey here!

Thanks to our generous sponsors Tigercat, Hultdins and John Deere, without whom research like this wouldn’t be possible.

Armed with this data, we believed it was more important than ever to track the trends. Thanks to generous support from Tigercat and Hultdins, we conducted another cross-Canada survey this year to begin what we hope is a biennial report on the state of the industry.

We know these numbers aren’t definitive evidence. Like any poll, it’s assuming a fair sampling of respondents giving honest, accurate information. We gathered a large sample size – 275 respondents – but we did not open any accounting books to confirm the numbers. But, like any good poll, CFI’s survey gives us an idea of where the problems lie, and comparing the results from our 2016 survey tells us which direction things are headed.

Scott Jamieson, CFI publisher and 27-year forestry reporting veteran who crunched the numbers in the 2016 survey, says the 2018 reports may be controversial, but will hopefully start a national dialogue about the health of the industry and what the future will bring.

The conversation has already begun. David Elstone, B.C. Truck Loggers Association executive director, references the survey in his Coastal View column. Elstone calls the revelations about worsening contractor margins “absolutely startling” and in stark contrast to the peak lumber prices seen earlier this year.

“Why does this matter? Are contractors simply complaining they are not making enough money? Of course not. It matters because if contractors cannot be viable, they will leave the sector, as the industry has already seen happen,” Elstone says.

One of those is 90-year-old Vancouver Island logging outfit W.D. Moore Logging, which made headlines last year after the owner called it quits, blaming slim margins for smaller contractors. “We can make a go of it,” owner Graham Lasure told the Vancouver Sun, “… for the capital required, the profit margins aren’t there.”

Aaron Sinclair, president of Timber Tracks Inc. in Prince George, B.C., also chimes in on the conversation in this issue’s Final Cut column. He says while the survey results show cause for concern, a more measured approach to gauging loggers’ performance is EBITDA, or earnings before interest expenses, taxes, depreciation expense, and amortization expense. Interior contractors should be in the 20-25 per cent range, and Coastal contractors in the 17-22 per cent range, Sinclair says.

“Contractors that do not earn sustainable EBITDA are putting the future of the sawmills they service at risk. Unsustainable contractors should be a concern for sawmill investors and the communities they call home. Their capital and tax bases are dependent upon those contractors,” he says.

You’ll find the executive summary of the survey reports here. Over the next few issues we will be publishing our regional reports, which narrow in on the numbers and what they mean for loggers in the B.C. Interior, B.C. Coast, Quebec and Atlantic Canada. These reports should spark conversations about what each region is doing differently, for better or worse.

We packed the entire 50-page report on the 2018 survey – including direct quotes from the contractors surveyed – into a special digital edition, available for download here.

Want to add your thoughts to the conversation? Disagree with the findings or the analysis? We want to hear from you. Send your feedback to mchurch@annexbusinessmedia.com and we’ll happily keep the conversation going.

The survey generated over 275 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 40 per cent in Western Canada, 25 per cent in Quebec, and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C. responses were split between the B.C. Coast and Interior.

By comparing results from both surveys, it’s clear Canada’s contractors have roadblocks ahead of them if they are to have healthy, profitable futures in the industry.

Rates
The number of loggers whose rates have not changed in five years has gone up since 2016. More than a third of contractors across Canada have seen no rate increase, which is eight per cent higher than the same response two years ago. On the other hand, fewer contractors have seen their rates drop from what they received five years ago. Just 11 per cent report a rate decrease in 2018 compared to 23 per cent in 2016.

Atlantic Canada, Alberta and the B.C. Interior struggle the most with securing rate increases, while the B.C. Coast, Quebec and Ontario are faring somewhat better.

Profit
More contractors and mill woodlands believe 20 per cent or more is a fair profit margin for loggers in 2018 compared to our 2016 survey, however most still expect a profit of between 11 and 20 per cent. We defined profit margin as return on revenue as a percentage, or profit before income tax divided by total revenue.

The reality is half of loggers in 2018 are achieving a profit margin of three per cent or less, with 28 per cent claiming to have made no profit last year. By contrast, in our 2016 survey, 38 per cent made three per cent or less, with just 17 per cent reporting no profit. Ontario is in the worst shape with 67 per cent of respondents there reporting no profit last year, and none reporting margins of 11 per cent or higher. [Editor’s note: Only a third of those surveyed in Ontario specifically identified as logging contractors, which left a smaller sample size to draw conclusions from. While this doesn’t invalidate the data, it does mean the numbers are more inflated than in other regions with larger sample sizes.]

Age
Our survey results place the average age of Canadian contractors in 2018 at 49 years old. Compared to our 2016 survey results, the total percentage of contractors under 55 remains relatively unchanged over the two years. What did change is a drop in the number of contractors between 56 and 65 years old, and a spike in those over 65. This may help explain why there was an increase in the number of loggers expecting to leave the industry in five years or less, which in 2016 was 28 per cent, and in 2018 is 36 per cent.

The retirement issue is most pressing in B.C., Ontario and Atlantic Canada where the average age is over 50. In all three regions, more than 40 per cent of contractors are over 56 years old. Nearly half of B.C. contractors (46% on the Coast and 47% in the Interior) say they will be out of the industry in five years or less.

Quebec continues to have the lowest average contractor age of just 40, while Alberta is in the middle at 46. An encouraging sign is that at least a quarter of contractors in those regions are under 35.

Succession plan
While retirement numbers aren’t radically different from results in our 2016 survey, what does stand out is the number of loggers who admit to having no succession plan. Forty per cent of contractors in 2018 say they have no plan for their business after they retire – a 15 per cent jump compared to 2016 results.

Fewer loggers are willing or able to have their children assume control, which dropped to 20 per cent from 27 per cent in 2016, and slightly fewer have managers interesting in taking over, six per cent in 2018 compared to nine in 2016. That leaves 74 per cent of loggers with no real plan for their business. Forty per cent have no succession plan, 20 per cent will auction and shut down, and 13 per cent hope to sell to another contractor.

Loggers in Ontario are the least likely to have a succession plan at 67 per cent, although that region also has the highest number of contractors planning to stay in the industry 16 years or more.  Selling to another contractor is a popular response in Quebec and the B.C. Coast, while B.C. Interior and Atlantic Canada loggers hold out the most hope for their children to take over.

Wages
On average, forestry equipment operators and drivers across Canada earn $29 per hour, although, not surprisingly, the rates vary significantly by region. Operators on the B.C. Coast earn the most, with an average rate of $37 per hour. The wages decrease as you go east, with Atlantic Canada operators earning the lowest wage at an average of $20 per hour.

When compared to the results from our 2016 survey, fewer operators are making more than $26/hour in 2018, although the number is still well over half at 62 per cent compared to 66 per cent in 2016. A handful more operators make between $21 and $25/hour – 18 per cent in 2018 compared to 17 per cent in 2016. While more operators earn between $16 and $20/hour in 2018 (13% compared to 9% in 2016), no contractors are paying less than $15/per hour in 2018, whereas three per cent of operators earned this wage in 2016.

Operator costs
When asked how much their main cost centres changed in the past three years, well over half of the respondents say machinery purchase as well as parts and service and fuel have all increased significantly. The cost of labour, hauling, supervision, insurance and finance have increased at least slightly for at least half of contractors.

These numbers are similar to what we saw in our 2016 Contractor Survey when asked the same question, with one notable exception: the cost of fuel has jumped over the past three years. Fifty-three per cent rate fuel costs as rising significantly, and another 39 per cent say it has increased slightly. In 2016 more than 50 per cent reported fuel costs had dropped, a welcome relief when almost every other cost had increased.

Higher costs may help explain why there was a jump in the number of contractors across Canada who own just one to three machines. In our 2018 CFI Contractor Survey, a quarter of loggers say they own between one and three pieces of equipment, excluding pick-ups. This is up significantly from 2016 results, which saw 15 per cent who own 1-3.

Needs improvement
Given all the financial challenges outlined, it’s not surprising that 74 per cent of loggers see financial compensation as the most important part of the industry to improve in order to attract replacement contractors.

Co-operation with the wood buyers (40 per cent) and simplification of regulations and procedures (33 per cent) were also ranked high in order to attract new blood.

When comparing these results to our 2016 survey, employment stability is less of a concern today than it was two years ago. In 2016, 53 per cent of loggers saw stability as an area that needed improvement, while just 31 per cent chose this answer in 2018.

The complete 50-page 2018 CFI Contractor Survey can be found here, in an easy-to-read digital flipbook, free of charge.

Thank you to our generous sponsors of the 2018 survey, who made this project possible: Tigercat and Hultdins.

• An executive summary.
• Themed reports on such hot topics such as trends in logger rates and profits, succession planning, operator pay, fleet size and investments, contractor age trends and more!
• Regional reports on the B.C. Coast, B.C. Interior, Quebec and Atlantic Canada.
• Unedited quotes from loggers across Canada.

Find the entire 50-page report, free of charge in an easy-to-read digital flipbook here.

Thank you to our generous sponsors of the 2018 survey, who made this project possible: Tigercat and Hultdins.

In general, Atlantic contractors reported the following:

Rates and profits
Stagnant logging rates are a concern across the country, but Atlantic Canada appears to once again be among the hardest places to negotiate better rates, with 17 per cent of contractors reporting lower rates today than in 2013, and just 28 per cent seeing a rate increase. This is, however, a slight improvement from the even split of 23 per cent that reported a rate decrease and increase in our 2016 Contractor Survey. Still, it places Atlantic Canada in the lowest spot for rate negotiations in Canada, with the national average of 44 per cent seeing a rate increase over the past five years. In Ontario and the B.C. Interior that number jumps to 67 and 63 per cent respectively.

While rates aren’t the full picture when it comes to profits, in Atlantic Canada there may be a correlation over the past couple of years. More than a third of contractors say they made no profit last year, which is higher than the national average of 28 per cent, and twice the number of Atlantic loggers that reported this result in our 2016 survey. A full third peg their 2017 profit at between 1 and 5 per cent. Just 11 per cent made between 6 and 10 per cent and a meagre 6 per cent achieved 11 per cent or higher profit margin. It’s worth noting that these contractors work with below average harvest volumes and revenue; however, the concern is the slide in profit margins compared to our 2016 survey results.

One relief for Atlantic loggers seems to be relatively steady operating costs. Contractors in Atlantic Canada are among the least likely to report significantly higher machinery purchase, parts and service, and fuel costs. Just 22 per cent have seen fuel costs increase significantly, compared to more than 80 per cent on the B.C. Coast and in Ontario.

Operator pay
With the majority of Atlantic contractors reporting labour costs as having increased only slightly, it’s not surprising they pay the lowest operator wages in Canada. The average operator there earns $20 per hour, $9 less than the national average. Quebec is the next lowest at $25/hour. Breaking the numbers down in Atlantic Canada, more than half of contractors pay between $16 and $20 per hour, with another 37 per cent offering $21-$25/hour. None pay more than $26. The wage breakdown has changed over the past two years, with more contractors paying between $21 and $25.

Atlantic operators are also the least likely to receive benefits on the job, with just over a third of contractors offering some form of benefits to employees. This is a stark contrast to western provinces or even Ontario where at least 79 per cent of loggers offer benefits. Those that do in Atlantic Canada are most likely to offer medical and dental or life insurance plans.

Company size
Loggers in Atlantic Canada have the distinction of running the smallest operations in Canada. On average they harvest 82,000 cubic metres a year, with less than 5 per cent of companies in the 250,000 m3 plus a year range. The national average is 189,000 m3. In neighbouring Quebec the average is 110,000 m3. Yet, when comparing their annual revenue, Atlantic Canada is not far behind Quebec in spite of the significant volume difference: $2 million in Atlantic Canada versus $2.2 million in Quebec. Both numbers are far below the estimated national average at $4.5 million. The B.C. Interior leads the pack with an average of $7 million and Alberta is a close second at $6.9 million.

About half of Atlantic loggers run between one and three machines in their operations, while the other half run between four and 20. A small percentage (fewer than 9%), run large operations of between 51 and 100 machines. That same percentage employs more than 50 people, while the average employs around nine. Close to 18 per cent have no employees.

The companies may be small, but they enjoy some of the best market competition for their logs and other wood products. Survey results show 42 per cent of contractors in Nova Scotia and New Brunswick have at least five customers. Another 36 per cent supply to three our four customers, and 19 per cent have one or two buyers.

Contractor age
Smaller companies and lower revenues mean a lower barrier to entry in Atlantic Canada, which ideally translates to more young people starting out in the industry. Unfortunately, this doesn’t seem to be the case in Atlantic Canada where contractors are among the oldest in the country. While the estimated average age of contractors across Canada is 49 years old, in Atlantic Canada the average is 52. Broken down, 43 per cent of the pool is over 56 and just 12 per cent are under 35. Those statistics are only worse in Ontario and B.C. where the average age is 54.

By comparison, in neighbouring Quebec the estimated average age is just 40, and 31 per cent are under 35. It begs the question, what are they doing different there to attract the next generation?
 
Succession planning
The issue of who will take over in Atlantic Canada becomes even more pressing when we look at expected retirement timelines in the region. More than two thirds (69%) of Atlantic loggers plan to be out of the industry in 10 years or less, and for 39 per cent it’s five years or less. This is a significant change from what we reported in 2016, when just 36 per cent expected to leave the industry in 10 years or less.

With so many looking to leave in the next decade, it’s concerning that when asked about their succession plans, more than half (58%) have no real plan for the business, divided between those who admit to no plan and those who will auction and close. Twenty-eight per cent expect their children to assume control, while the rest have managers interested in taking over or expect to sell to another contractor.

Future
When asked about future challenges, a few things stand out for Atlantic contractors. For one, they are more likely than their Canadian counterparts to see access to markets as an important challenge to address. Over 80 per cent rated this as “very important” compared to the national average of just 44 per cent. Access to fibre is also a major concern, specifically in New Brunswick where 89 per cent of contractors rated it as a very important challenge to address.

Interestingly, Atlantic Canada contractors were less inclined to rate employee attraction and retention as a major issue. Just over 58 per cent see this as a problem, while the national average was notably higher at 74 per cent.

Compared to our survey results from neighbouring Quebec – where the logging industry is relatively healthy with younger contractors and overall increasing profit margins – if trends continue in Atlantic Canada, the industry there is facing a major shakeup over the next decade or less.

“Location of wood only continues to go further and further away from all of our resources and purchasers/mills still do not recognize the costs of doing business in such remote areas are significantly higher. We are never compensated for this and it truly can break a very sustainable company.”

“Can we help transition older employees to different jobs or retirement?”

“We need new entrants into the industry. Our workforce is aging with no replacements in sight.”

“Largest challenges we face are attracting and keeping quality employees and being able to pay fair and competitive wages. The rate per m3 has not been keeping up with the cost of inflation/living and it gets more difficult every year to stay competitive and successful. Rates need to be realigned. Can’t always rely on just trying to move more volume to make more money. If you don’t make any money moving 50,000 m3 a year you probably won’t make any moving 100,000 m3.”

“Eliminate the monopoly and collusion behaviours of licensees and the dictated rates they so-call negotiate with contractors. We’ve been underplayed for years and it is unacceptable to abuse a public resource like the way it has been by major licensees.”

“I would like to see all mills follow a rate model that keeps the contractors whole in what they get paid per cubic meter and hourly rates for the road building equipment.”

“In Alberta there is a huge push for green energy under the current NDP government. There is very little consideration for forestry/biomass to be a part of that. Forestry is missing out on a large opportunity. The mills should be getting involved in the ‘green’ movement. Forestry has potential to develop new markets for waste wood. It takes bigger companies to get it going though. A small contractor doesn’t have the cash or the wood supply to develop green energy.”

“In my 35+ years of being a logging contractor I have seen many changes. 1) The contractors have gotten a lot bigger and some not by choice. This growth I feel has changed the way the mills view the contractor in such a way that it appears they are a large, successful business without taking the risks, investment and exposure into consideration when negotiating rates. 2) The mills’ rate negotiators are being trained by upper management in negotiating tactics that, in some cases, end up in a take it or leave it scenario for the contractor that has all his risk with one or two mills. 3) I strongly believe there needs to be some government accountability put on the mills to ensure they are being fair in the compensation being paid to contractors. 4) I don’t believe the shareholders of the mills would continue to participate as a shareholder if the profit margins were comparable to the average logging contractor profit margins.”

“Manufactures (forestry sales companies) need to be scrutinized on the cost of parts. This is a significant expense and definitely affects the health of a forestry contractor.  Parts most often need to be purchased from equipment dealers and the prices are far and beyond a fair profit margin.”

“The general public’s view on forestry is negative towards forest operations.”

“We are a private contractor only, buying stumpage and land for harvesting of different types. We have no interest in being a logging contractor for industry (mills) as I see too much control over contractor rates and financial returns. This industry has always been cyclical and industry harvesting and trucking rates are structured to get mills through downturns. It seems opportunities for contractors to be included in the market highs is not there which excludes them from reasonable ROI.”

“We need a way to have logging rates consider the whole business. Rates must include days lost to weather and moving. All machines required to do the job must be put in for full cost. Equipment rates need to include replacement cost.”

“I don’t really enjoy anything about the business anymore. Years of being underplayed by major licensees with the risk, stress and hard work have really taken a toll on me as well as a lot of other contractors.”

“I feel the suppliers should be the ones forced to adapt with the changes in economy.  The contractor is always expected to improve their operations in order to compensate for the inflated prices on machinery, services, parts, insurance, etc. It is the contractor with ‘all the skin in the game’ and the return on investment is marginal at best. We don’t expect to be billionaires but do expect a satisfactory return given the amount invested and the risk involved.”

“There is an ever increasing burden of conforming to bureaucratic policies from government, taxes, safety regulations.”

“When lumber is low we starve. When lumber is high we barely have any profit. I have been in the logging industry as a contractor for 17 years and it is not worth what I have put in. I have given it all.”

“Removal of market-based rate clause in Bill 13 regulations. Loggers that are left are very efficient but still not being paid a fair market rate to allow a good profit margin. Mills and licensees have diluted and manipulated the fair market rate and left contractors no choice but to work under their conditions and terms. Loggers will not get more profitable any other way other than for logging rates to increase.”

“Contractors need government support to secure reasonable logging rates so we can pay our employees a fair wage as well.”

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2018 Contractor Survey in our enews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free enews to get all the latest industry news.

The survey was conducted in June 2018 by independent research firm Bramm & Associates, generating over 275 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 40 per cent in Western Canada, 25 per cent in Quebec, and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C. responses were split between the BC coast and Interior. Many thanks to our sponsors for making the research possible – Hultdins and Tigercat.

In general, Quebec contractors reported the following:

Rates and profits

More Quebec contractors seem to have had some luck negotiating rates over the past couple of years. Compared to our 2016 results that found just 17 per cent saw a rate increase over five years, in 2018 that number jumped to 34 per cent. That moves Quebec out of the bottom spot for rate negotiations, which now falls to Atlantic Canada at just 28 per cent. Still, 34 per cent is a far cry from the 64 per cent of loggers who saw a rate increases in neighbouring Ontario.  

And while profits have slipped for the average Canadian contractor – a worrisome 28 per cent claim to have made no profit – in Quebec the situation is looking much more positive. In fact, Quebec and Alberta were the two best regions for a contractor to make a profit last year, with 22 and 21 per cent of contractors respectively posting profit margins 11 per cent or higher. All told, 87 per cent of Quebec contractors had a 2017 profit of at least 1 per cent, and for 39 per cent that profit was 6 per cent or higher.

Higher profit margins are at least partially explained by lower operational costs in Quebec. Just 38 per cent of Quebec contractors rated machinery purchase as having increased significantly, compared to the 62 per cent national average response. In Quebec the most keenly felt cost increase was fuel.

Operator pay

Not surprisingly given regional economic differences, machine operators in Quebec are paid less than those in Western Canada, but receive a similar wage to operators in Ontario. Earnings drop significantly for operators in Atlantic Canada.  

In Quebec 44 per cent of contractors are paying between $26 and $30 an hour, while another 30 per cent pay $21 to $25. Just 9 per cent fall in the $16 to $20 an hour range. By comparison, in Atlantic Canada 55 per cent of operators earn $20 an hour or less, and none pay over $25. Still, the Quebec average wage of $25 an hour falls below the national average of $29, which likely results in some skilled operators migrating West for higher paying jobs.

When it comes to benefits, Quebec contactors are less likely to offer some form of benefits than other Canadian loggers, particularly when compared to Ontario. Only Atlantic Canada is less likely. While in neighbouring Ontario 83 per cent of contractors offer some benefits, in Quebec just 45 per cent do so. That number has dropped from the 50 per cent who offered benefits in 2016.

Workload

Yet money isn’t everything, and more Quebec contractors seem to understand that work-life balance is a big factor in job satisfaction. In that respect, little has changed over two years. In the 2018 survey, just 39 per cent of Quebec loggers report working 55 hours a week or more, only one per cent higher than in 2016. This is in direct contrast to the rest of Canada, where at least half of respondents work 55 or more hours.

Quebec also has the highest number of operations that run fewer than 70 hours a week (69%), as well as the highest percentage of part-time operations that run fewer than 20 weeks a year (17%).

Company size

Quebec contractors compared to their Canadian counterparts and more specifically their neighbours to the west, run smaller in terms of company size, revenue and volumes. Loggers there harvest an estimated average of 110,000 cubic meters. The companies in Quebec are pretty evenly spread out among the under 750,000 categories. The largest percentage, 23 per cent, produce between 10,000 and 25,000 cubic metres. These numbers are relatively similar to those in Atlantic Canada, save for the 14 per cent of Quebec loggers producing between 250,000 and 500,000 m3, which in Atlantic Canada is zero. By comparison Ontario contractors pull in an estimated average of 181,000 m3, with 66 per cent over 100,000 m3.  

It follows then that Quebec loggers have significantly lower annual revenues than those in Ontario, and only slightly higher than their Atlantic Canadian neighbours. The estimated average annual revenue for Quebec loggers is $2.3 million. In Ontario that number jumps to $6.2 million, and in Atlantic Canada it is $2 million.

In terms of fleet sizes, Quebec has the lowest numbers in Canada with 52 per cent of Quebec loggers running between one and three machines. The average operation there runs just eight pieces of iron. Even Atlantic Canada averaged higher at nine. Ontario loggers run the most equipment with an average of 46 machines. Not surprisingly then, Quebec hires fewer employees than average, with 44 per cent of loggers running with 1-5 in full operation mode. Just 12 per cent operate with more than 20 employees.

These numbers may be good news for the region over the long term since they mean a lower bar for entry for new contractors.

Contractor age

Smaller companies, fewer machines and employees, and lower revenues likely explain why Quebec contractors are among the youngest in the country. The estimated average age in Quebec is just 40, which, compared to a national average of 49, is a good sign for the longevity of the industry. A healthy 46 per cent of Quebec loggers are between the ages of 36 and 45, and another 31 per cent are under 35. Only Alberta has comparable numbers with 25 per cent of contractors there under 35. In Ontario just 6 per cent are under 35, with 45 per cent over 55.

Succession planning

As a result of their younger average age, Quebec loggers expect to be in the industry for the longest; the average is 15 years. Almost a third say they will be in the industry for another 20 years.

These younger loggers help explain why 57 per cent of loggers in the region say they do not have a succession plan for the business. While in other regions like B.C. – where nearly half of the loggers expect to be out of the industry in less than five years – succession planning is essential for the companies to stay afloat, in Quebec it is less of a concern.  

What is nice to see in Quebec is that just nine per cent say they will sell or auction their equipment and shut down. In Alberta and the B.C. Interior that response jumps to over 20 per cent.

Future

While Quebec loggers are still looking to improve their industry – citing concerns about attracting the next generation and negotiating better rates with sawmills – it seems based purely on the numbers that loggers in the province are fairing somewhat better than their counterparts across Canada. That’s not to say things can’t improve further. A higher profit percentage on a much smaller revenue is expected and does not leave much room for take-home earnings. And the fact that they cannot offer employees much in the way of benefits does not speak well for the next gen. Still, other regions should take note, particularly of the younger demographic in Quebec, and consider what needs to change. 

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2018 Contractor Survey in our enews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free enews to get all the latest industry news. 

The survey was conducted in June 2018 by independent research firm Bramm & Associates, generating over 275 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 40 per cent in Western Canada, 25 per cent in Quebec, and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C. responses were split between the BC coast and Interior. Many thanks to our sponsors for making the research possible – Hultdins and Tigercat.

In 2016 more than a third of contractors said they supply to just one mill. This year those supplying to a single mill dropped to just 19 per cent. On the other end of the scale, the percentage of loggers supplying to more than five mills increased to 15 per cent in 2018 from just 9 per cent two years ago.

Percentage of contractors reporting customer numbers for timber or other products.

When viewed regionally, the competition for fibre varies, with eastern loggers having more customers than their western counterparts.     

Loggers in Atlantic Canada seem to have the most options when it comes to mills vying for their fibre – 42 per cent of contractors there have at least five customers for their logs or other wood products such as biomass or pulp chips. This is not entirely surprising given the number of smaller, family-owned operations operating on a relatively small land-base compared to other regions in Canada.

As you head further east the percentage of contractors with five or more customers drops lower, bottoming out in Alberta at just 7 per cent. Alberta also has the second highest percentage of loggers supplying to one or two customers.

Ontario and the B.C. Interior have similar percentages in all categories, with 50 per cent of loggers in those regions supplying to one or two customers, around a third supplying to three or four, while 17 per cent or less deal with five or more customers.

Contractors on the B.C. Coast appear to deal with the fewest mills, with 70 per cent of respondents there claiming to supply one or two mills. Breaking that number down: 31 per cent supply to just one mill, and another 39 per cent deal with two mills.

Percentage of contractors reporting customer numbers, by region.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2018 Contractor Survey in our enews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free enews to get all the latest industry news.

The survey was conducted in June 2018 by independent research firm Bramm & Associates, generating over 275 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 40 per cent in Western Canada, 25 per cent in Quebec, and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C. responses were split between the BC coast and Interior. Many thanks to our sponsors for making the research possible – Hultdins and Tigercat.

In every region save for the B.C. Coast and Alberta, working in the woods was chosen as the No. 1 perk of being a logger. The second highest aspect is the variety and challenge at 40 per cent, followed closely by independence at 39 per cent.

It is not surprising that financial compensation is the least likely aspect that loggers enjoy (10%), with zero respondents in Ontario and Quebec choosing that answer.

Percentage of respondents who say they enjoy these perks of the job, by region.

Given the financial challenges identified in the survey, it’s not surprising that 74 per cent of loggers see financial compensation as the most important part of the industry to improve in order to attract replacement contractors.

Co-operation with the wood buyers (40 per cent) and simplification of regulations and procedures (33 per cent) were also ranked high in order to attract new blood.

When comparing these results to our 2016 survey, employment stability is less of a concern today than it was two years ago. In 2016, 53 per cent of loggers saw stability as an area that needed improvement, while just 31 per cent chose this answer in 2018.

Percentage of contractors who identify these parts of the business that need improvement in order to attract replacement contractors.

Missed last week’s survey snippet? Find a collection of reports published to date here. Look for more news from the CFI 2018 Contractor Survey in our enews over the coming weeks, with a final digital report in December and a summary in the November/December print issue. Be sure to subscribe to our free enews to get all the latest industry news.

The survey was conducted in June 2018 by independent research firm Bramm & Associates, generating over 275 replies to a detailed list of questions. Respondents were distributed according to the geographic breakdown of the forest industry, with 40 per cent in Western Canada, 25 per cent in Quebec, and the rest found in Ontario, Atlantic Canada, and central Canada. Within B.C. responses were split between the BC coast and Interior. Many thanks to our sponsors for making the research possible – Hultdins and Tigercat.