Blindsided

Industry representatives say the Ontario government’s idea to introduce a new plan to manage the forestry sector seems to have come out of nowhere.

The Ontario Forest Industry Association and other forestry representatives held a news conference about the new proposed framework Wednesday. Under the proposed Framework to Modernize Ontario’s Forest Tenure and Pricing System, government appointed local forest management corporations would be set up in regions across the province.

These corporations would market and sell the region’s access to wood, called sustainable forest licenses, to companies. The corporations would consist of board members chosen by the Ontario government and not include those in the forestry sector. This, the province says, would lessen the risk of bias decision making.

This decision follows a provincial initiative to place 11 million cubic metres of unused forest up for competitive bidding; including bidding from other countries, which received mostly positive response from forestry sector representatives.

However, Rick Groves, forestry manager of AbitibiBowater, said he’s disappointed with the government’s lack of creativity on the proposed framework.

"We’re losing the entrepreneurial spirit," Groves said. "It’s difficult because they have multiple agendas and they aren’t focused. From our perspective, this one really isn’t a good time to be focusing on it and going down this path just takes us away from completing the other two initiatives."

Groves said what bothers him the most is the lack of transparency on the part of the province. Most of the frustrations come from not knowing what the plan is for the sector.

"We have the shell but no one will tell us what’s on the inside," he said. "Obviously they have a game plan but those details haven’t been shown."

Scott Jackson, manager of forest policy for Ontario Forest Industry Association, said the proposed framework would hurt small- and medium-sized companies and would crate confusion with new bureaucracy.

He said the government wants to return the forestry sector to a model used 30 years ago where the government controlled forestry management. The government allocated 26 million cubic metres of forest as sustainable for companies to use.

"The small- and medium-sized operators say that what the government proposed will kill them," Jackson said. "Without a secure fibre supply they aren’t going to be able to go to the financial institutions and not be able to secure the capital loans that they need to invest in their mills to remain competitive. Without a wood supply no one is going to invest in your sawmill."
Forestry Minister Michael Gravelle said he believes it is the right direction to help revitalize the ailing industry.

Gravelle spoke to more than 100 people Tuesday night at a public consultation session presenting the plan.

The minister called the new model a "bold departure" and said the Local Forest Management Corporations would be responsible for managing and selling Crown timbre so companies would be free to innovate and market their products.

Although there have been concerns about LFMCs allowing wood harvested in Ontario to be manufactured elsewhere, Gravelle said the corporations would have a board of directors made up of local and regional people with those interests at heart.

"The goal is to make sure the Ontario wood is harvested in as profitable and positive way as possible," Gravelle said. "With the formation of local forest management corporations that decisions are made on a regional or local basis."

Lim said the corporations would have a more regional approach and could potentially lead to OFIA members being outbid for SFLs by out-of province or even out-of-country interests.

"Even though they’re called local they’re not really going to be local, there’s only 5 to 15 of them across Ontario," Lim said. " These aren’t really going to be little local corporations these are going to be regional."

The public has until June 29 to respond to the proposed plan.


With files from Jamie Smith