Forestry industry lauds Ontario aid plan

MURRAY CAMPBELL | Globe and Mail

It took several attempts, but the Ontario government has finally come up with an aid package that makes the province's beleaguered forest industry happy.

Premier Dalton McGuinty said yesterday that the government will provide $220-million over the next three years to offset the industry's cost of building and maintaining forest roads and to retroactively reduce the stumpages fees for harvesting wood on Crown land.

The forestry industry, which is the bedrock of the Northern Ontario economy, has been hemorrhaging jobs in recent years as it struggled with the higher-valued Canadian dollar, skyrocketing costs for electricity and stiff competition from low-cost offshore jurisdictions. The cost of delivering wood to mills in Ontario is about $55 a cubic metre, compared with a worldwide average of $35.

In the past year, mill closings put about 4,000 people out of work.

Mr. McGuinty said he hopes the aid package will make the industry more competitive with jurisdictions that have lower costs for energy and raw timber.

"We can't make a guarantee that there will be no more job losses," he said at Queen's Park. "But what we do believe is we have put in place now the necessary supports to ensure we can turn the industry around and put it on a more sustainable footing."

There are three parts to yesterday's announcement.

The government will contribute an additional $47-million annually for construction and maintenance of roads into forests. This is in addition to an earlier pledge for $28-million of support, for a total of $75-million annually.

Government support for forest roads was slashed in the late 1980s. In 1987, the province spent $41-million on roads but only about $5-million last year.

A $70-million refund in stumpage fees will be remitted to the industry next month.

Stumpage fees for poplar veneer and white birch will be reduced by $3-million a year for the next three years.

The government did not directly address the issue of high energy costs, but the Premier said that the recent extension of a price cap on Ontario Power Generation production will give the industry some certainty about its future costs.

Jamie Lim, president of the Ontario Forest Industries Association, praised the government for recognizing the forest sector needed to become more competitive. "This is absolutely a home run," she said.

Like Mr. McGuinty, she said she could not guarantee there would not be more layoffs or mill closings. "But what I can tell you is that [yesterday's] announcement definitely addressed key issues that were crippling us, so we're hopeful."

The Premier said the government recognized that earlier aid efforts had not been enough and that it had to enrich its aid package.

Last spring, in response to a task force report that said the forestry industry was in crisis, the government offered $350-million in loan guarantees.

In September, it offered help on forest roads and established a $150-million fund to leverage investments for plant modernization. (*)

Manitoba to annex northwestern Ontario?

Some Ontarians would like you to consider it
Tessa Vanderhart Staff

Since the boundaries between Manitoba and Ontario were drawn, there have been concerns that northwestern Ontario — including the communities of Kenora, Dryden, Fort Frances and Thunder Bay — are more West than East.

These days, the region is economically troubled: jobs are being lost in the pulp and paper industry, the already small population continues to diminish, and politicians of all stripes are expressing discontent with the way the region is represented in government.

To that end, Tannis Drysden, a city councillor for Fort Frances, Ontario, has conceived the Central Canadian Public Policy Trust. The trust will fund research in universities to make decisions about the region’s future by examining the possibility of different regional structures, including joining the province of Manitoba.

Still, Drysden said that the biggest benefit she sees is “a more thoughtful recognition of rural and northern communities,” among other shared interests with her neighbour to the West.

“We’ve seen new territories formed in my lifetime, in Canada. If there’s thoughtful, good data to prove that, I can’t see why it wouldn’t happen,” said Drysden.

Livio Di Matteo, an economics professor at Lakehead University in Thunder Bay, explained that with 60 per cent of the land mass of Ontario but only 230,000 people, the region does not fit well within the province.

This has manifested itself for a number of years in letters to local papers, but as the difference between northwestern Ontario and Toronto continues to grow, so does the desire for a restructuring.

This desire is particularly strong with regard to forestry and energy policies. The provincial capital at Queen’s Park manages the region’s industry by controlling the crown lands that are logged, and higher energy costs have been hard on the pulp and paper industry.

Di Matteo explained that with the new City of Toronto Act attempting to give more power to the GTA, it is important to keep the rebalance of powers symmetrical.

He noted that regional government is the most realistic approach, as there is no reason to think the region could not survive economically on its own.

“In actual fact, it would be as self-supporting as Manitoba or Saskatchewan, or any of the Atlantic provinces, for that matter,” he said.

Herb Emery, an economics professor at the University of Calgary, co-authored the study with Di Matteo, looking at economies of scale in provincial boundaries.

“All of these things have roots in history, where it was originally suggested that northwestern Ontario should be a part of Manitoba,” said Emery.

The idea of changing the borders of central Canada is hardly new. In 1912, northwestern Ontario was officially awarded to Ontario, after being promised to Manitoba by Sir John A. Macdonald.

David Canfield, Mayor of Kenora, has two daughters currently living in Winnipeg. His is the second municipality, along with Rainy River, to have signed on to the idea — and he will sit on the board of the Central Canadian Public Policy Trust.

Canfield said that, while the border is hurting the region economically, “the perception that we’re not important in Queen’s Park” hurts more.

He noted another upside: “when all you Winnipeggers come down here in the summertime, you wouldn’t have to go out of province.”

Howard Hampton, MPP for Rainy River, rural affairs critic and leader of the Ontario NDP, expressed concern with the way Ontario’s Liberal government has treated the region, leading to protests from the rural population. He said that more and more people are expressing the same concerns: the loss of tens of thousands of jobs, high energy rates in a region where industry is king, even lower tuition fees and auto insurance rates in Manitoba.

“I’m quite convinced the majority of them would say ‘I wish I was part of Manitoba,’” he said.

Michael Gravelle, the MPP for Thunder Bay- Superior North, is not convinced.

“I’m a good friend of Drysdale, but I honestly do not think the solution is to become part of the province of Manitoba,” said Gravelle. “It’s still, I think, advantageous for us to stay a part of the province of Ontario.”

He said that he believes it makes more sense to press the provincial government for help than to attempt to amend the Constitution.

“I suppose someone should ask the province of Manitoba what they think about it, now,” Gravelle said.