VANCOUVER, B.C. – Just when B.C.’s coastal forest industry received some good news – the expiry of the 19.3 per cent U.S. duties – another blow has seemingly knocked both legs from under it.

A new report issued by the Liberals suggests the coastal forest industry is run down and in a state of crisis.

Economist Peter Pearce wrote the report, which suggests closing three to five sawmills currently in operation. He also recommends shutting down half of B.C.’s “obsolete” sawmills, leaving the province with only 20 to 25 mills compared to today’s 47. However, the report does suggest building 12 to 14 new, larger facilities within the next 10 years to mill second growth timber.

The report also recommends scrapping government regulations requiring timber companies to mill the wood in the nearest community to where it was harvested. This will mean longer hauls for trucking companies, but could be devastating for small-town economies across the province.

Forest Minister, Mike de Jong, says that many, if not all the recommendations will be adopted or investigated further.

Currently, softwood producers are still $1.3 billion in debt to the U.S. over unpaid duties, despite the fact the countervailing duty of 19.3 per cent expired in mid-December.