Province pledges to deliver forestry help Stakeholders still waiting for package details

Premier Dalton McGuinty’s comments last week that the Ontario government will look into providing help for the forest industry is drawing cautious optimism from local politicians and industry stakeholders.
“We’re definitely encouraged by the comments. This recognizes that there is a crisis in Ontario’s forest industry,” said Mark Holmes, manager of public affairs for the Ontario Forest Industries Association.
“My own personal opinion of Mr. McGuinty’s gesture to look at the file and see what they can do is to be cautiously optimistic,” agreed Fort Frances Coun. Tannis Drysdale, who attended last week’s conference of the Association of Municipalities of Ontario.
“I do not believe this is the appropriate time to say we have a victory. We do not have an offer on the table as yet,” she noted. “[But] I am pleased the government has now recognized the crisis in the industry.”
Ontario NDP leader and local MPP Howard Hampton said it was about time the province took action.
“The forest industry’s been telling the McGuinty government for over a year that [their] policy of driving hydroelectricity rates through the roof was going to close paper mills and kill jobs all across the north,” said Hampton.
“It’s interesting to see that a year later, the premier now says he might respond, his government might do something.”
“It has already cost Northern Ontario about 4,000 jobs in the last year,” Hampton added, citing Terrace Bay, sawmills closed in the northeast, Kenora, and Cascades Inc.’s announcement just yesterday that it would lay off 150 employees in Thunder Bay.
“It has taken the McGuinty government a year and the loss of thousands of jobs to understand that their forest policy and their hydroelectricity policy is killing jobs,” Hampton argued.
Besides being warned a year ago by the industry, the provincial government also has the Minister of Natural Resources Council Report on Forest Sector Competitiveness.
That report—which contained 26 recommendations to ensure a secure future for the forest products industry—was released to the public back in June. The government’s response at the time was to offer $350 million in loan guarantees.
Industry reps said the gesture fell far short of what was needed, particularly since many companies in the forest sector already are in debt.
Premier McGuinty met with municipal leaders from Northwestern Ontario following his speech at the AMO conference in Toronto last week.
After the meeting, he told reporters his government is considering an incentive package for the forest industry—similar to the one provided to the auto industry.
McGuinty was quoted in the national media as saying, “We are looking at some kind of similar support that would act not as a bailout but rather as an incentive for new investment, particularly the kind of investment that would put our industry on a more competitive footing.”
Going into the AMO conference, Coun. Drysdale said the issue still was not very high on the list of priorities. NOMA members worked hard to change that.
“NOMA, along with our partners, put forward what could best be described as a massive lobbying effort,” noted Coun. Drysdale.
“Literally, from 7 a.m. to midnight, representatives from the organization were meeting with delegates, telling them the story of the forestry industry, not only in Northwestern Ontario but the reflection upon their communities,” she stressed.
“It certainly became clear throughout the conference as conversations continued that forestry wasn’t a northern industry, although it’s critical in the north.
“It’s an Ontario-wide industry and deserves the support and attention of government,” she argued.
“Hundreds of delegates from right across the province signed petitions asking Dalton McGuinty to provide the same type of assistance to the forest industry as they do to other industries such as the auto industry,” Coun. Drysdale added.
NOMA members had brought along buttons to distribute, reading “Industry in crisis. We care about the forest industry.”
“By the end of the conference, it was rare to see a delegate who was not wearing one of our buttons,” Coun. Drysdale noted. “I felt we’d done our job well. We got support from mayors right across the province.”
Even Toronto Mayor David Miller was supportive of the cause, she added.
While she did not speculate on how much money the province would offer in its package, Coun. Drysdale did say an investment in forestry is an investment in the province as a whole, not just the north.
“It would be in the government’s best interests to provide adequate supports,” she remarked.
Holmes noted while a “prosperity fund” similar to the one the auto industry receives would be a good start, it only is one of the four key fiscal recommendations from the Forest Sector Competitiveness report.
The other three are:
•a 50 percent fuel tax credit when hauling fibre from the forest to the mills;
•a reliable supply of energy at reasonable prices; and
•that the government assume 100 percent of the construction and maintenance costs of primary logging roads, and 50 percent of the costs of secondary forestry roads.
“That’s a very, very expensive endeavour, and one that never ends,” Holmes noted, adding primary roads often are used by the public.
“These are roads that are often used by municipalities, fire suppression, tourists, hunters, cottagers, and so forth,” he explained.
The province used to be responsible for primary logging roads until it was downloaded onto the industry by the former NDP government of Bob Rae. But it was the more recent Conservative government that opened up the electricity market, causing rates to soar.
McGuinty did not make mention of the other recommendations, but the government is expected to release its plan for the forestry sector by the end of September.
“We’re looking forward to the OFIA and our partners—municipal governments from across much of Ontario, labour, First Nations, Chambers of Commerce—working with the government in a common effort to return the forest industries to a competitive footing,” he added.
Yesterday, Cascades Inc. announced it would close its #5 paper machine and the converting operations at Cascades Fine Papers Group in Thunder Bay.
About 150 employees will be laid off by the end of this year.
“Some of the converting activities, as well as the manufacture of certain grades of paper, will be transferred to other facilities within the Fine Papers Group,” the company said in a press release.
Hampton said many of these operations will move to Manitoba and Quebec, “where you have much more affordable hydroelectric rates.”
Indeed, the company cited “high energy costs in Ontario,” as well as “non-competitive operating costs” and the strong Canadian dollar versus the U.S. greenback, as the main factors in its decision.