Fort Frances, Ontario – Fort France Mayor June Caul states, “After years of representing that it was seeking a buyer for the Fort Frances mill, we are very disappointed that Resolute would now use the sale of this mill to try to debilitate this asset and hurt a community that has given so much to its bottom line. What these restrictive covenants reveal is that neither Resolute nor Riversedge had any intention of allowing this mill to operate – and we know there is interest in doing so.”
“After the substantial public investments that have been made in this mill, and the taxpayer money that Resolute has been allowed to walk away with already, this is despicable corporate conduct that should be condemned and penalized by the highest levels of government,” continues the Mayor.
“Resolute appears to think it owns our forest. But the forests of our district belong to the people of Ontario – to our communities – not to a Quebec-based multinational corporation. The arrogance of these restrictive covenants shows how little respect Resolute and Riversedge have for our government and the people of Ontario, the Rainy River District, and our community,” concludes Mayor Caul.
The Town of Fort Frances hosted a media conference today on the issue of the mill, and the moves by Resolute.
Since the closure of the Fort Frances mill in 2014, the Town of Fort Frances has worked diligently with a number of entities interested in purchasing the Fort Frances pulp and paper mill and returning it to operating status. Despite presenting Resolute Forest Products with these options, and thorough lobbying efforts by the Town, in July 2019 Resolute sold the Fort Frances mill property to a numbered company associated with Riversedge Developments, for the sum of $1.
Representatives of the Town and the owners of the numbered company have met several times in recent months to discuss their plans and understand the sale restrictions on the mill properties. In several meetings and communications from the new owners, both the Town and Minister Rickford were led to believe that a transition to a new operator was possible.
That now appears to be untrue. Last week, the Town learned of several restrictive covenants that were registered on title of the mill properties by Resolute and the Riversedge numbered company. The restrictive covenant agreements were registered on title on July 9, 2019. These covenants include restrictions on the properties that prohibit the sale to any entity that would manufacture various types of pulp or paper products, restrictions that require the sale of key mill assets for scrap, and restrictions that prohibit a new owner of the property from engaging the provincial government to request access to a wood supply from the Crossroute Forest. We are also concerned that, despite the nominal sale value, a $3.5 million mortgage has been registered on title from a company called Combined Metal Industries. Combined Metal is a well-established scrap company based in the Toronto area.
The Town of Fort Frances finds these conditions entirely unacceptable, and a direct affront to both the public policy underlying the forest management system, and the sizeable investments that have been made in this property by our community and Ontario taxpayers. As recently as June 2017, the Ontario government forgave $23 million in funding that was provided to Resolute for the Fort Frances mill.
Now it appears that Resolute intends to destroy that asset, sink that investment, and remove the economic engine of the Rainy River District. These are not the actions of a good corporate citizen, but attempts to consolidate control of publicly-owned forests, extract the benefit of our natural resources to other districts of the province, and destroy our community’s key economic driver.
The Crossroute Forest must be used to support the economies of communities within that forest, as it has for more than 100 years. With multiple serious parties having now expressed interest in reopening the Fort Frances mill and restoring jobs in our community, we demand that the provincial government consider all options at its disposal to support that outcome. We also call on the province to take immediate action to cancel the Sustainable Forest License granted to Resolute for the Crossroute Forest, and seek interest from others who would be willing to invest locally to use the fibre in our district in a manner that benefits our communities as intended. The Town has also conferred with its MPP, Minister Greg Rickford, who has expressed outrage at Resolute’s actions and these restrictive covenants. He is travelling to Toronto this week to meet with representatives of Resolute to discuss their continued interests in the crown forests of this district.
The Town of Fort Frances remains committed to supporting an operational future for the mill properties and is satisfied that the assets of the mill remain in viable working condition. The mill also continues to meet its environmental compliance requirements. The Town is in discussions with its legal counsel and is considering all options available to protect these properties and the economy of Fort Frances and the Rainy River District.
The Town of Fort Frances is located in Northwestern Ontario, approximately 350 kilometres east of Thunder Bay, on the shores of Rainy Lake at the Canada-USA border. The Town was home to an active paper mill from 1914 to 2014, with a potential restart in 2019. The Rainy River District’s population is approximately 20,000, 25 percent of which is Indigenous.