Third party audit

Dear Editor,

On December 12, 2017, the Lieutenant Governor of Ontario approved the Minister’s request and recommendation to extend the term of Sustainable Forest Licence No. 542245 for ten years. The Minister’s recommendation was based on two consecutive independent third party audits of the Licensee to determine if the terms and conditions set out in the SFL had been met. The first audit was from April 1, 2002 – March 31,2007 and the second audit was from April 1, 2007 – March 31, 2012. The Kraft pulp mill and one paper machine were idled in November 2012, the remaining paper machine was idled in January 2014, and in May 2014 Resolute announced the permanent closure of the pulp and paper mill in Fort Frances. One of the audits should have been from April 1 2012 to March 31st 2017. The facility in Fort Frances, from January 2014 to February 2018, did not process a single log from the Crossroute Forest. On February 27, 2018 the Order was applied and SFL No. 542245 was extended to March 2032.

Several companies, between 2014 and 2019, expressed an interest in the Fort Frances facility and attempted to purchase this mill. The MNRF, maintained the position that the potential buyer of this facility must make arrangements with, the Licensee, for wood from the Crossroute Forest to supply the Fort Frances facility. At that time, none of the other existing owners of forest resource processing facilities within the Crossroute Forest were required to purchase their wood supply from the Licensee, the MNRF ensured their allocation of wood within SFL No. 542245. A forest resource processing facility has very little value if there are no forest resources to process or if the cost of said resources are determined by a for profit company, and not the MNRF. As a result the Fort Frances mill was sold to a community developer that had no interest in the forest or its resources. The language in SFL No. 542245 required forest resources harvested pursuant to this license to supply the facility in Fort Frances right up to the Minister approved September 10, 2020 Amendment. We know, for more than six years, there was nothing harvested from the Crossroute Forest that was processed at the Fort Frances facility, contrary to SFL No. 542245, audited and extended by an Order-in-Council.

The next letter will consider the MNRF’s waiver of the repayment of the 22.5 million dollar loan.

Thank you.
David Kircher