Forest industry must reinvest in itself

Ontario’s automotive industry in 2005 zoomed past that of Michigan. In 10 months of production this year, Ontario has produced 2.09 million vehicles compared to Michigan’s 1.93 million.
The loss of production experienced by the big three automakers of Michigan bears a striking resemblance to the loss of forestry and paper production in Northern Ontario.
Michigan has experienced a loss of almost 340,000 jobs over the past eight years in the automotive industry. And while Ontario might gloat that its production has risen, jobs in auto parts manufacturing seem to be in decline and several parts suppliers are in bankruptcy protection.
Nearly a third of Ontario’s car production can be attributed to Honda and Toyota.
Across Northern Ontario, the total number of lost jobs in the forestry industry pales in comparison to that of Michigan, but the impact felt in the communities may be far harsher.
Michigan depended on the big three for jobs and failed in attracting foreign manufacturers to the state.
Ontario, meanwhile, helped diversify the auto manufacturing industry by spending money to attract Toyota and Honda to the province. It was a good decision because consumers have turned to offshore brands of vehicles.
In the meantime, North American manufacturers have been playing catch up building quality in their vehicles to match or exceed that found in Toyota and Honda. And they are succeeding.
In Michigan, the state is looking to turn things around by growing the health industry, the hospitality and tourism industry, and attracting new professional groups. They are looking to diversify their economy to be less dependent on a single industry.
Michigan sees the issue as a state-wide problem and not just a local issue where auto manufacturing plants existed.
Eric Reguly, writing in The Globe and Mail on Nov. 21, suggested that removing subsidies from the forestry industry would be in its best interests.
In his article, he noted the Quebec government, with the lowest energy prices in North America, has put $1 billion into forestry in that province.
In Ontario, the government has offered a $220-million assistance package, along with $750 million in loan guarantees and the latest offer of $140 million in electrical rebates.
Yet all of that money has not reduced the loss of jobs in either the Quebec or Ontario forestry industry.
Across North America, paper sales are declining as consumers go to alternative communication devices. TV Guide, with almost a quarter-of-a-million weekly subscriptions, has discontinued its magazine.
Circulation in major daily papers has declined, with consumers reading more on the Internet.
This past Monday was called “Black Monday” for the Internet because consumers racked up the largest number of Internet sales ever in purchasing Christmas presents.
They were choosing not catalogue shopping, nor flyer shopping nor store shopping, but online shopping. Through their choice of the Internet, they were rejecting paper as a way of conveying information.
Reguly’s answer is that the industry must reinvest in itself, eliminate mills, and consolidate holdings to meet the new challenges of the 21st century.
He points out Ontario always will have a forestry industry based on the vastness and quality of our forests, but he thinks the money spent in trying to salvage the industry by government would be better spent on bringing high-speed Internet to northern communities and offering retraining.
He believes that in cutting the umbilical cord to subsidies, forestry and paper companies would have to move aggressively to change their operations, cutting capacity and modernizing by adding new technology.
And those changes would attract new capital to the industry.
If he’s correct, that will force one-industry towns to also move more aggressively to modernize, add infrastructure and training to meet the new technologies that will be necessary in their communities.