Fund too small, misguided to help northern towns

Last week, the federal government announced the Northern Ontario portion of the heavily-promoted and eagerly-anticipated $1-billion Community Adjustment Fund.
It’s certainly nice to see the government raise the issue of our struggling resource-dependent communities, but this fund is just too small and misguided to help us get through the current crisis.
In presenting the Harper government’s last federal budget, Finance minister Jim Flaherty said he understood the issues faced by “single industry” towns and regions, and was prepared to help.
The stated purpose of the $1-billion Community Adjustment Fund is “mitigating the short-term impacts of restructuring in communities.” Money from this fund is slated to go to projects in towns that are economically-dependent upon mining, forestry, auto manufacturing, lobster fisheries, or the agricultural sector.
$1 billion sounds like a lot of money, but is it really enough to help our communities “adjust” to the economic difficulties we face? I don’t think so for two reasons.
The first problem with this fund is one of scale. If the entire $1 billion in this fund was divided just among the forestry-dependent communities in Canada, then it would amount to less $4 million per town.
When we factor in that those forestry communities also must compete with towns with mining operations, lobster fisheries, etc., then it becomes clear that this money will not go far.
In the end, this $1 billion—once split by province and then by region—will provide Northern Ontario with just $15.7 million. This small amount of money will not be enough to help our region “adjust,” especially when considering the bankruptcy of Buchanan Forestry Products alone has taken more than $50 million out of our economy.
Add in the lost wages, pensions, and other monies from AbitibiBowater, Xstrata, and other struggling firms and, well, you get the idea.
The second problem with the Community Adjustment Fund is in the type of help it is offering. In a news release issued last week, the Harper government stated that: “Projects to be funded [under the Community Adjustment Fund] could include reforestation activities, investments in machinery or equipment, demonstration of new mining technologies, and initiatives to improve market access for products.”
Again, any money is welcome, but the forestry problems in our region are not related to a lack of trees or outdated equipment.
Likewise, “demonstrating “new mining technologies and improving market access for products will not prove effective since these resources are not in high demand during economic downturns and recessions.
While I applaud Mr. Harper, to some degree, for finally trying to help our regional economy, the $15.7 million set aside for Northern Ontario is too little and will not offer our communities the kind of help they need at this point in time.
If the Conservatives really wanted to help resource-dependent communities, like forestry and mining towns in Northern Ontario, then they simply would reform the EI system.
If everyone who paid into the EI system could draw from it and for a longer period, then our families could continue to put food on the table and pay their mortgages, which would help keep many small businesses afloat in the short-term while maintaining the property tax base for local governments.
That way, they could continue to invest in projects that will take our region forward when demand for our natural resources rises again.

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