Many dollars not doled out from provincial forestry fund

Although applications ended more than two years ago, less than one-third of the money committed by the province to the forestry sector has been spent.

The $150 million Forestry Sector Prosperity Fund was first announced in 2005. The province would help fund up to 20 per cent of forestry industry capital projects. But since applications ended in Oct. 2008 only $45 million from the fund has been announced, with $127 million committed to 39 companies.

Northern Development, Mines and Forestry Minister Michael Gravelle said everything from bankruptcy to the US housing market crash made it difficult for companies to build capital projects. Despite the challenges, those companies are still interested in the program and even though less than one-third of the fund has been spent, $127 million is committed.

"There’s no doubt that the challenges in the forestry sector have made it more difficult for some of the forest sector company to move ahead with their capital plans," Gravelle said.

"The challenges the forestry sector have faced have made it more difficult for the companies to access the prosperity fund, but they’ve been very interested in it and that’s why we continue to work on it."

Gravelle said a recent $9.6 million announcement for AbitibiBowater, funded by the FSPF, is a good example of a company forced to overcome financial troubles before resuming capital projects.

MPP Howard Hampton (NDP, Kenora-Rainy River) said the Liberals could have spent the money sooner on initiatives that companies needed, such as lowering energy rates. Hampton said during the FSPF’s timeline, 17 paper and 13 sawmills closed between Sault Ste. Marie and the Manitoba border.

"That’s the tragedy of this,” he said.  “The money was there. If the government had used that money differently and set to work addressing hydro rates, I’m not saying every paper machine would still be running, but I think many of them would still be running.

“That would have also helped many of the sawmills survive.”

Gravelle said even though only $45 million has been spent through the prosperity fund, the province has spent an unprecedented $780 million on Ontario’s forestry sector, and committed $1 billion.

Both MPPs agree though that they see a light at the end of the tunnel when it comes to the province’s forestry sector.

Hampton said with the pine beetle infestation in British Columbia and drier climates in the US, Northwestern Ontario’s wood fibre will be in demand again over the next few years.

"I think you’re going to see renewed interest in Northwestern Ontario forests and the kind of jobs those forests can produce," said Hampton.