The Canadian Pacific itself was a major consumer and producer of forest products. During the early 1900s, when the CPR was building branch lines all across the southern Prairies of western Canada, the company needed huge quantities of finished lumber for stations, section houses, ice houses, water towers, freight sheds, cattle guards, maintenance buildings and bridges. Wooden ties, to which the rails were spiked, were needed by the hundreds of thousands to construct the railway and its many branch lines and then for regular maintenance of the tracks. The CPR retained lands as tie reserves in several areas and operated logging and milling operations to supply its needs. Major CPR milling operations were run by its Tie and Timber Branch at Bull River which was along the Kootenay River south of Cranbrook, at Yahk and at Canal Flats.
The Crowsnest Pass Route became the major focus for logging and milling in the Kootenays through the 1920s the lumber industry boomed and many communities thrived as many large mills were built. Sawmills were built along the railway at every major settlement where there was available timber and logging camps were common throughout the region. In 1918, for example, there were at least 30 mills along the railway between Kootenay Landing and the Crowsnest Pass. Many others were located along the CPR west of Procter, at Nelson, Castlegar, Kaslo, Nakusp and other locations. These mills included very large, high-capacity plants.
The pace of cutting, coupled with the damage from many forest fires, far exceeded the sustainable supply of timber in the region and by the mid-1920s lumber production began to fall. The amount of accessible timber decreased to the point where many operations became unprofitable and mills throughout the region closed. The mills were many communities' sole economic base and with the closure of the mills the towns themselves often all but disappeared. For example, the town of Waldo, located about 30 miles (50 km) south of Cranbrook, was the home of the Baker Lumber Company and the Ross-Saskatoon Lumber Company. Each of these mills was capable of cutting 75,000 board feet of lumber a day.
A report prepared for a Royal Commission on forestry in 1944 noted:
Other former lumbering towns in the East Kootenay that were all but abandoned by the 1930s were Elko, Manistee, Flagstone, Hanbury and Baynes Lake. The closure of most of the large mills in the 1920s and 30s also had a major impact on the larger regional business centres of Cranbrook and Fernie because many people moved out of the district. Moreover, mills in these larger communities also closed. "Before the mills in Fernie closed around 1912," noted the Royal Commission study of 1944, "the population exceeded 5,000. Today, with coal production almost equal to the 1912 figure, the population stands at 2,600. The greater part of this drop in population must be attributed to the decline in the forest industry."
(1) Mercer, William M. 1944. Growth of Ghost Towns. The Decline of Forest Activity in the East Kootenay District and the Effect of the Growth of Ghost Towns on the Distribution Centres of Cranbrook and Fernie. Royal Commission on Forestry, Victoria, B.C.