Government Experimenting with 60,000 Forestry Jobs

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THUNDER BAY – A coalition of northern and rural businesses, municipal leaders, unions and citizens are voicing their overwhelming support for Minister Gravelle’s two forest sector initiatives. Those two measures are the Provincial Wood Supply Competitive Process, which makes available approximately 30% of the province’s industrial fibre supply to existing facilities and new entrants, and the move to Co-operative Sustainable Forest Licences (SFLs).

Over the past two weeks, approximately 200 forest companies, small businesses and forest sector service providers, representing well over 8,600 employees, have signed an Open Letter as part of the ‘Coalition for Putting Ontario’s Wood Back to Work!’ asking the government to defer any action on their proposed tenure reform, A Proposed Framework to Modernize Ontario’s Tenure and Pricing System, while the Ministry of Northern Development Mines and Forestry (MNDMF) completes these two initiatives.

“We see both of these initiatives as very progressive” says Jamie Lim, President and CEO of the Ontario Forest Industries Association (OFIA). “If done properly, these will provide certainty to forest companies, big and small, traditional and value added, and will put people back to work – something that is desperately needed”.

At the same time, the numerous Chambers of Commerce, northern and rural municipalities, public citizens and unions representing thousands more hard working Ontarians who signed on to the Open Letter, are also clear in their message that the most recent MNDMF tenure proposal is unnecessary and goes too far.

“From a city perspective, we know we need jobs, and we know the importance of the forest industry,” said Tom Laughren, Mayor of the City of Timmins. “We’ve got all of these initiatives in place right now that are starting to work, so why would we want to scrap those now and replace them with a completely new tenure system.”

Jeff Muzzi, Manager of Forestry for the County of Renfrew, shares this concern. “We are asking the government to postpone any further work on this tenure initiative until the Provincial Wood Supply Competitive Process is complete, and the MNDMF has completed a detailed analysis of the socio-economic impacts of their tenure proposal.”

This sentiment was echoed in a recent Joint Statement by the Timmins Economic Development Corporation, The Corporation of the City of Timmins and the Timmins Chamber of Commerce requesting that the government defer any further action on the modernization of Ontario’s forest tenure and pricing for at least three years while the Provincial Wood Supply Competitive Process and the move to Co-operative/Shareholder SFLs are completed.

John Kapel of Littlejohn Enterprises, a family run company that has been operating in Timmins for nearly three decades, is concerned. “We’re finally working together. We’ve managed to drop our costs. Everyone is getting the wood they need. We’re finally doing something right and all of a sudden they turn around and kick us in the teeth. Costs will go through the roof.”

Peter Nitschke, General Manager of the Bancroft Minden Forest Company shares this view, stating, “The shareholders of the Ottawa Valley, Mazinaw-Lanark, and Bancroft Minden Sustainable Forest Licenses all agree that this government proposal should not be supported. The current tenure arrangements for these licenses are not broken and do not need to be fixed.”

One of the key concerns with the MNDMF proposed model is that it will arbitrarily remove any existing fibre supply commitments or agreements held by forest companies – commitments that have given companies the security and certainty needed to invest in their mills. Instead, the government is proposing to hand over decision making authority to Crown Corporations or Agencies run by well intended individuals who are appointed by government, but have no experience or understanding of the forest sector and no vested interest.

“The MNDMF proposal threatens to undermine the progress of our family run business by destabilizing the foundation upon which our company has been built. We’re not afraid of change – if we were we would not be in the forest sector. Our family run operation has had to be flexible and embrace change on a daily basis, however, the change being proposed by the government’s new tenure model goes too far” says Mike Morgan, President of Midway Lumber.

The Northwestern Ontario Associated Chambers of Commerce and the Thunder Bay Chamber of Commerce, who represent over 2,000 and 1,070 members respectively, share these concerns and both organizations signed the Open Letter.

“The bottom line is that if you cannot get a guaranteed fibre supply, long-term, from the government, how can you get financing?” asks Harold Wilson, President of the Thunder Bay Chamber of Commerce. “Forest companies have a lot of costs, and if they cannot show that they have fibre for the long-term, they are going to have a very hard time with their business plan.”

The coalition’s position is that the proposed MNDMF model will result in increased costs and reduced efficiencies, a reduction in wood supply both at the provincial and local level, and increased uncertainty for Ontario’s forest sector at a time when it is still recovering from recent global economic challenges.

“We urge the government to defer action on their proposed tenure reform” concluded Lim.  “Instead, MNDMF should finish their Wood Supply Competitive Process, and continue to move to Co-operative SFL’s.  Both of these progressive government initiatives will help put wood back to work in Ontario”.

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