What’s good for the North is good for the South
He plants trees to benefit another generation.
– Caecillius Statius, Synephebi (220 BC-168 BC)

As I travel with the Finance Committee in Timmins, Thunder Bay, Sault Ste. Marie, a message is reinforced – the forest sector impacts all of Ontario, not just northern Ontario.

Many mills exist in Southern Ontario, and the mills, both northern and southern, purchase hundreds of millions of dollars of goods and services from suppliers across the province. In 2004, over 500 manufacturers of forest products, ranging from small logging operations to large pulp and paper operated in the province. Further, 332 businesses in southern Ontario directly provide equipment and services to the pulp and paper sector alone.

For the past 200 years, the forestry sector has demonstrated a tremendous ability to create jobs and therefore prosperity throughout Ontario.

Second only to the auto industry in terms of balance of trade, Ontario’s forest industry employs 80,000 people directly, and 150,000 people indirectly – but, 50,000 people have lost their jobs since 2002.

Forestry is a green industry, and like farming, all areas harvested are regenerated. Over five years, forest companies across the province have planted half a billion trees. Many of them starting out as seed and seedlings at St. Williams Forest Care plantation – one reason Norfolk is this year’s Forest Capital of Canada.

But Ontario’s forest industry is being devastated. Key competitiveness issues threaten the sector’s viability and business certainty is required to attract much-needed investment.

On January 18th, the U.S. government filed a second request for arbitration proceedings under the 2006 Softwood Lumber Agreement, claiming that the Ontario government has implemented three programs that circumvent the Agreement. It is vital that government understand that the never-ending legal high jinks of the U.S. government create useless business uncertainty for the Ontario forest sector.

While some challenges, such as parity of the Canadian dollar and the crash of the U.S. housing market, are beyond the extent of the provincial government, others are not.

Regrettably, one policy comes to mind.

On September 4, 2007, the Ministry of Government Services announced its intention to “adopt the Forest Stewardship Council (FSC) standard for at least 30 per cent of all virgin paper purchased for its offices.” This proposed provincial government paper procurement policy indicates an official bias toward a single forest management standard and creates a very real trade barrier for Ontario-made forest products.

During Finance Committee hearings we were also presented with another problem. In comparison with jurisdictions across North America, Ontario’s electricity rates are second highest. We were told the Province of Ontario should seize the opportunity to establish competitive electricity prices as an economical development tool – and don’t close the Atikokan and Thunder Bay coal plants.

Without doubt, the forest industry has a bright future both domestically and globally, but it remains to be seen in which jurisdictions forest sector manufacturers, and therefore future jobs and prosperity, will be located.

Northern Ontario has a unique economy prone to boom and bust cycles – an economy largely dependent on renewable and non-renewable resources. Northerners often feel alienated and left out of the decision-making process. Many presenters over the past four years have reminded the Finance Committee that what is good for the north is also good for the south.