24% reduction to Ontario’s Forest Roads Program Reckless – OFIA

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Bill 83- A solution in search of a problem according to OFIA President Jamie Lim
Bill 83- A solution in search of a problem according to OFIA President Jamie Lim

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THUNDER BAY – The Ontario Forest Industries Association (OFIA) was shocked to learn on May 1st that Premier Wynne’s 2014 budget was drastically cutting funding to an effective infrastructure program that creates jobs and supports local communities. The 24% reduction to the Provincial Forest Roads Program will negatively impact hard working families, most notable small, independent contractors in Northern and Rural Ontario.

Jamie Lim, President and CEO of the OFIA commented, “The lack of warning from the Liberal government in particular the Northern Ministers is irresponsible. As recently as February, member companies of the OFIA were informed by government that this infrastructure program would be maintained at 2013 levels. The late notice of reduced funds creates business uncertainty for Ontario’s forest product sector and puts into jeopardy planned road work and jobs.”

She went on to say, “This is a Crown roads program administered by the forest products sector to build and maintain Crown roads in Ontario. The recovery is happening now. Putting Ontario’s wood back to work is happening now and the sector needs good public access roads now.”

The Government’s Budget document and recent announcements by Premier Wynne have acknowledged that investing in transportation infrastructure creates jobs, supports local economies and contributes to the provincial prosperity.

“The budget talked a lot about investing in “modern infrastructure” in the GTA like transit systems. Premier Wynne doesn’t seem to understand that in Northern and Rural Ontario modern infrastructure is building and maintaining good primary and secondary forest roads that are the foundation for a natural resource economy,” added Lim.

Lim added, “This is reckless action at a time when markets and the primary sector are recovering. Companies need business certainty as well as a government with a vision that supports today’s innovative renewable 21st century forest products sector. This government does not seem to recognize that you cannot have a value added sector without a vibrant primary sector.”

“Since the beginning of 2014, signs of a real rebound within the sector have been encouraging. OFIA’s member companies have announced restarts and investments into new projects throughout the province. And yet, Minister Sousa’s budget had less than 50 words about Ontario’s renewable forest products sector,” stated Christine Leduc, OFIA’s Director of Policy and Communications.

Lim concluded by saying, “This meant real work for small Northern and Rural businesses and their employees and we will continue to work constructively with Northern and Rural stakeholders and government to restore this critical infrastructure program.”

With a June 12th Provincial election on the horizon, the OFIA will actively engage all candidates to ensure that their plan supports the full potential of Ontario’s renewable forest products sector and the 150,000 hardworking families in over 260 Northern and Rural communities.

Backgrounder from OFIA

• In 1994, with the implementation of the Crown Forest Sustainability Act (CFSA), the Government of Ontario downloaded the cost of road construction and maintenance to the forest products sector

• In 2005 a Minister’s Council on Forest Sector Competitiveness was developed by the Minister of Natural Resources to address the uncompetitive nature of Ontario’s forest products sector

• The Minister’s Council acknowledged that many of the roads being built and maintained by the forest industry “are public access roads, used by tourists, campers, hunters, other industries like hydro and mining, and other users”

• The Minister’s Council recommended that “the provincial government assume its proportional share of the costs of building and maintaining the public access road network in provincial Crown forests”.

• The Provincial Forest Roads Program, which has been fully utilized since it began in 2005, previously provided $75 million per year for the construction and maintenance of public access roads across Northern and Rural Ontario. Despite its proven value to all users of public forests and provincial lands, the Liberal government is cutting the program to $38 million in 2014.

• OFIA understands the need for everyone to contribute to provincial debt reduction, but does not understand the lack of support for Crown forest infrastructure just as the sector is poised for a full recovery. The program was reduced in 2011 by more than 36% which was the largest cutback in MNR’s budget that year. And now to have another significant cut to the program really sends the wrong message to investors and certainly jeopardizes jobs.

• The Government’s 2014 Budget document and recent announcements by Premier Wynne (April 28, 2014) have acknowledged that investing in transportation infrastructure creates jobs, supports local economies and contributes to the provincial prosperity

• The Provincial Forest Roads Program which was designed to benefit all Ontarians as the road infrastructure is used by all industries and the general public to both work and recreate in our great Crown forests. • 2014 contracts between the industry and small, independent contractors were entered into in good faith earlier in the year based on an understanding that the program would be maintained at the 2013 level. Now companies will be making final decisions regarding the cancellation of agreements and contracts to accommodate the current and unexpected reductions to the program, which will mean job losses.

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