Duane Hicks
Calling on the province to ensure a low-cost, long-term fibre supply for Rainy River District was the overriding theme of the Ontario 2015 pre-budget consultations held yesterday morning at La Place Rendez-Vous here.
“The conversation through the presentations this morning regarding the re-opening of the mill is not about the Town of Fort Frances versus Resolute Forest Products, or making the choice between re-opening the pulp mill, expanding the sawmill, or closing the mill,” said regional economic developer Geoff Gillon of the Rainy River Future Development Corp.
“Selling the mill in Fort Frances and restarting it, we believe, is a win-win for all parties,” Gillon said.
“We understand that Resolute Forest Products and the Ontario Forest Industries Association are not happy with Endangered Species legislation of Ontario,” he noted.
“We understand that Resolute has difficulty meeting Stewardship Council standards, and that they and the Government of Ontario may be at odds on many facts and files, but really none of this has to do with the Fort Frances situation,” Gillon stressed.
“We agree with [Natural Resources and Forestry minister Bill Mauro] that moving to a collaborative licence agreement with take some time and we are willing to take that time to make it right,” he remarked.
“Which is why, in the short-term, we are proposing that the ministry move to a Crown management unit similar to the Sapawe Forest, with an allocation for a pulp mill in Fort Frances.”
Gillon said all that is in dispute is who owns the Crossroute Forest: Resolute or the Crown?
“All that is required is for Resolute to release control, or for the province to take control, of the fibre available to establish a Crown management unit,” he argued.
The objective is to encourage the sale of the Resolute facility in Fort Frances, to ensure the long-term, low-cost fibre supply for the buyer of the mill should one be found, and to stabilize the economy of Rainy River District.
Forest tenure consultant Mike Willick, a former deputy assistant minister of natural resources, said there is enough wood to satisfy the needs of the Fort Frances pulp mill and the Atikokan sawmill.
The pulp mill provides benefits more broadly than people realize, benefitting the health of the forest, added Willick.
“If we don’t have a market for the smaller trees that don’t make good saw logs, there will be under-utilization, there will be wasteful practices, and finally there will be long-term environmental degradation of the forest,” he warned.
Big logs can be sent to the sawmills; the smaller trees can be put into the pulp mill.
Restarting the pulp mill here also will effect synergies with other mills, whether it is creating business for Manitou Forest Products or Nickel Lake Lumber, or taking wood chips from Kenora Forest Products.
Willick reiterated the trees are a resource owned by the people of Ontario.
“The Ministry of Natural Resources and Forestry licenses to companies the right to harvest it,” he explained.
“The companies do not own the trees. They do no own the forest,” he stressed.
“Locally, the minister has licensed the wood from the Crossroute Forest to Resolute Forest Products for use in their facility in Fort Frances,” Willick noted.
“But Resolute has closed this mill and has plans to use the fibre in more distant facilities.
“The minister has responsibility to decide how this Crown resource will be used to benefit the people of Ontario,” he added.
“The minster should confirm that he will make available the historic wood supply of the Fort Frances pulp mill to any new owners of the pulp mill.”
Kitchener-Waterloo MPP Catherine Fife, a member of the Standing Committee on Finance and Economic Affairs, noted the only barrier stopping this from happening seems to be political will.
“Reasonable people should be able to figure out how to share in order to save this town’s mill,” she remarked.
“I guess that would be our goal, our reason for speaking here today,” replied Gillon.
“We believe that reasonable people can come to an agreement and allocate wood fibre at a fair price for a potential owner of this mill to restart it.”
Fort Frances CAO Mark McCaig hammered home the point that the restart of the pulp mill is crucial to the community.
He added the reason talks with potential buyer Expera Speciality Solutions broke down was because the Wisconsin-based company could not be guaranteed an affordable source of wood fibre.
As such, government intervention is needed to ensure that fibre supply is available for any future buyer.
“We’ve heard from the government that they’re not going to get involved in a ‘business-to-business transaction,’” McCaig noted.
“In this instance, with Resolute, we’re talking about a corporation that makes their product from a Crown resource owned by the province.
“We need the minister of natural resources to confirm that the historic wood commitments to the Fort Frances pulp mill will be made available through a supply agreement to a purchaser of the pulp mill,” he added.
“We urge the government to inform Resolute that the wood supply through the Crossroute and Sapawe Forests are being reserved pending a decision on the Fort Frances pulp mill,” continued McCaig.
“The control and the availability of an economically-viable Crown wood supply should not be an impediment to the sale of the mill,” he stressed.
“There has always been, and should continue to be, an allocation of wood to the mill in Fort Frances.”
Erin Wood, a member of the ENGAGE Young Professionals Network and owner of Simplicity Professional Hair and Body Care here, said her business, like most in the district, depend on the forest industry, directly or indirectly.
“Fort Frances exists as a result of the fibre from the Crossroute Forest and we, the people of this community and this district, believe that the fibre should continue to be used to support the operation of a mill here in our community,” she remarked.
O’Connor Township Mayor Ron Nelson, past president of the Northwestern Ontario Municipal Association, said the forest industry has been the backbone of the region’s economy for many years—and now is poised for significant growth.
But the cost of fibre in Ontario remains a hurdle, making it problematic for companies to compete worldwide.
“Companies that are looking to invest in Ontario must have secure, affordable access to fibre supply,” said Nelson, adding NOMA is requesting the province support the forest industry by reducing the red tape that is a barrier for investment in the forestry sector.
Steve Watson, forestry manager (Ontario) for Resolute Forest Products, said his company supports the OFIA position that if forest tenure is working and wood is flowing, then don’t change anything.
If there are issues, then maybe alternative mechanisms need to be looked at in terms of tenure.
“That’s a key component,” said Watson.
“If we’re going to change the overall framework for how the forest is managed, the end result needs to be a cost-effective, continuous flow of fibre to support the existing and new industries.”
Ainsworth Engineered Canada woodlands manager Rick Ksiezopolski, who made a presentation with site manager Terry Ouellet, said his company supports a more inclusive model of forest management for the local forests “as long as it provides a secure, long-term, cost-competitive fibre supply in support of our continued investment.”
Ksiezopolski also noted the largest input cost in the production of OSB is wood cost, and the Barwick facility has some of the highest wood costs in North America due to forest management fees, forest renewal fees, stumpage fees, roads, logging, and trucking.
Government policies directly impact these costs, he added.
For example, the Treasury Board has asked the MNRF to increase the minimum stumpage paid for poplar and white birch from 59 cents to $4.83.
This 820 percent increase is “unconscionable,” and would jeopardize all past efforts in investment and challenge the viability of the mill, said Ksiezopolski.
Other issues include “stubbornly-high” gas prices in Northwestern Ontario, electricity costs, and increasing taxes.
Meanwhile, Christine Leduc, director of policy and communications for the Ontario Forest Industries Association, said all forest companies in the province must operate under the Crown Forest Sustainability Act and all products are sustainable.
The OFIA is asking the province to provide the forestry sector with certainty that companies will be able to utilize the full available harvest.
“It is critical the companies have dependable access to the 26 million cubic metres,” she stressed.
“New policies should not preclude the use of sustainable fibre that has been committed to the industry now and in the future.”
Comments made yesterday will be part of a report the committee will review at the end of its two-week tour, which also includes stops in Toronto, London, Fort Erie, Cornwall, Ottawa, and Sudbury.
The report then will be given to Finance minister Charles Sousa to consider in the final 2015 provincial budget.
