Rethink Strategy

First, the good news: the provincial government finally has acknowledged that the forestry industry in Northwestern Ontario is in crisis.
The bad news is the McGuinty Liberals have taken the wrong tack in trying to solve the problem.
“The forest industry in Ontario is in crisis,” reads the first line of the final report from the Minister’s Council on Forest Sector Competitiveness, which Natural Resources minister David Ramsay commissioned back in November and released with great fanfare Monday in Thunder Bay.
“Action is urgently required to prevent predictable and irreversible consequences for communities, businesses, and workers,” it added.
And the government’s first response? Provide up to $350 million in loan guarantees “to stimulate new investment in value-added manufacturing, improve energy efficiency, and make better use of wood fibre.”
The problem, of course, is that the last thing an industry already drowning in debt needs is to take on more debt. What’s needed instead is grants to help companies get back on solid ground—much like how the provincial government has come to the rescue of the automotive sector, casinos, and the film and television industry in southern Ontario.
Concrete action by the province, not loans, also is needed to reduce the exorbitant hydro rates mills in Northern Ontario face—which amount to more than one-third of their operating costs.
The forest industry and local politicians were disappointed with the government’s first reaction to the forest industry crisis—and rightly so. With five mills identified as at high risk for closing, including Abitibi-Consolidated’s operation in Kenora, and another seven touted as “at risk,” the resultant job losses alone are staggering.
And then there’s the spin-off effects—smaller populations, less consumer spending, and reduced tax revenue—that would devastate communities right across Northwestern Ontario.
The McGuinty government must re-think its strategy for the forest industry before it’s too late.

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