Keith Leslie / Canadian Press / Wednesday, September 28, 2005
TORONTO -- Ontario's forestry sector is hoping a provincial aid package to be unveiled Thursday will equal the government's $500-million incentive plan for the auto industry.
"We would hope so," Jamie Lim, president of the Ontario Forest Industries Association, said Wednesday. "When you contribute over $1 billion in tax revenues annually, when you have annual wages that are $4.8 billion, that's a considerable amount of revenue that we're contributing to the prosperity of the province."
Natural Resources Minister David Ramsay declined to provide details of the aid package, but said it would be similar to the auto sector plan that encourages companies to invest and expand in Ontario.
"The framework is similar in that we're looking at a program that would incent investments," Ramsay said. "That's what the auto sector does, and we need to do the same thing to help the industry get into the 21st century and modernize."
The government has not yet spent the entire $500 million in the auto sector package, but has successfully used it to gain major expansions in Ontario from General Motors and Ford.
Premier Dalton McGuinty has said any government support for the forestry sector "would act not as a bailout," but would rather provide incentive for new investment.
The industry says Ontario is quickly losing its competitive edge in the global forestry market after being hit hard by rising fuel and electricity costs, a higher Canadian dollar, and increased competition from low-cost countries such as Russia, China and South Korea.
To underline the crisis, the industry points to recent decisions by Abitibi-Consolidated to idle its newsprint plant in Kenora, Ont., pending government aid, and by Toronto-based Grant Forest Products to invest $400 million in two plants in South Carolina.
Ramsay agreed the forestry industry is in trouble, and said the province would not wait for a promised aid package from the federal government before going ahead with its own plan.
In addition to the fund, Lim said mill owners want a 50 per cent fuel tax credit for hauling wood from forests to mills, and they want the province to resume paying for the construction and maintenance of logging roads.
"We don't see that road recommendation as looking for help because those roads are public roads," Lim said. "The government should be in the business of constructing and maintaining public roads."
The province is also expected to suggest ways of helping mills with energy costs by helping them build co-generation facilities to produce their own electricity from waste steam.
Lim said the forestry crisis should not be considered a problem exclusive to northern Ontario. She said there are mills in urban areas in the south of the province -- and an estimated 13,000 jobs -- that are also in jeopardy.
"This is a problem for Ontario and for Ontario's prosperity," she said. "When a mill closes in the north, it stops buying goods and services in southern Ontario." (*)
