Forestry package a good first step: NOMA

Ontario’s forest industry received a shot in the arm from the provincial government this morning, but more needs to be done to make the industry competitive on the global market, the Northwestern Ontario Municipal Association said.
“It’s a good first step, but it’s a small step,” said Fort Frances councillor and NOMA board member Tannis Drysdale, who was in Thunder Bay on Thursday morning to attend Natural Resources minister David Ramsay’s announcement at the Valhalla Inn.
“While I am pleased that our coalition efforts have put this issue on the government’s radar screen, it is clear that more work needs to be done,” NOMA president Michael Power, who also is mayor of Greenstone, said Thursday morning in a press release.
The province’s forestry package unveiled this morning includes:
•$150 million over the next three years for a Forest Sector Prosperity Fund to leverage new capital investments, especially in the areas of energy conservation, co-generation, and improved fibre efficiency;
•up to a maximum of $28 million annually to maintain primary forest access roads to reduce delivered wood costs;
•$7.5 million in 2006/07 and $10 million for each of the next three years towards the Forest Resource Inventory to ensure the long-term sustainability of the wood supply; and,
•$1 million per year beginning in 2006/07 for an Ontario Wood Promotion program to enhance value-added manufacturing.
The Ontario Forestry Coalition, of which NOMA is a member, had been lobbying for a prosperity fund similar to the $500-million fund the auto industry recently received from the province.
“We asked for a considerably larger fund,” Coun. Drysdale noted.
“The goal of these measures is to address immediate competitiveness challenges faced by the Ontario forest sector, provide a positive climate for investment, and to strengthen the industry’s future through joint industry and government actions,” the MNR said in a press release.
Thursday’s announcement is in addition to initiatives announced back in June when the Minister’s Council on Forest Sector Competitiveness was released.
Those initiatives included a $350 million loan guarantee program. But most industry reps scoffed at the program, arguing the industry already was in debt.
And Coun. Drysdale said the measures announced Thursday will have little impact on the industry’s delivered wood costs, which determine its competitiveness on the global market.
“Ontario’s current delivered wood cost is $55 per cubic metre. The global average is $35 per cubic metre,” she noted. “The Prairies’ cubic metre delivered wood cost is $36.”
The province’s package will reduce Ontario’s delivered wood cost by $1-2, to $54 or $53 per cubic metre. “It doesn’t seem like we’re competitive yet to me,” Coun. Drysdale noted.
Ramsay’s announcement did not include the 50 percent fuel tax credit on the provincial portion of the tax when hauling fibre from the forest to the mills, or 50 percent of the costs to maintain secondary forestry roads, as the coalition has requested.
Coun. Drysdale said Energy minister Dwight Duncan is expected to make an announcement to address the forest industry’s concerns regarding energy costs, but no date has been set.
The forest industry has seen a number of cuts in recent months. Back in July, Abitibi-Consolidated announced it would permanently close one of its paper machines in Kenora in October and shut down the second one indefinitely.
The company now is looking at the option of building a co-generation plant in Kenora to help deal with high energy costs.
As well, Tembec, Norampac, and Cascades all have announced layoffs and closures in the last two months.