Abitibi's foreign fibre sale worries local leaders.

Near Thunder Bay -- The sale of large tracts of private forest land to a United States forest management company has unions, mayors and community leaders worried about the economic and environmental well-being of Canadian forests and their regions.

Abitibi Consolidated's decision to sell off 196,000 hectares of its privately-owned timberlands near Thunder Bay for $55 million to North Star Forest Ltd., a subsidiary of Wagner Forest Management Ltd., may be a sign of a growing trend, according to an industry official. The Communications, Energy and Paperworkers Union wants the fibre to stay in Canada so it can help to create and sustain jobs.

Kenora Mayor David Canfield wants whatever fibre is collected from Abitibi's private and Crown land to be allocated to the Kenora Forest Product mill for their expansion, should their mill become idle. In other words, he wants the region's supply to stay in the region.

Tembec Inc. and Domtar Inc. will be selling land in the Spruce Falls area, which is in the middle of the Gorden forests. Alain Guindon, president of the Gorden Cosens Survival Committee, wants the fibre to be processed in the area as well.

Natural Resources Minister David Ramsay confirms multi-national lumber companies are increasingly buying up private land in Ontario.

Eighty-seven per cent of the province's land is Crown-owned, according to Ramsay, who adds the percentage of Northern Ontario land owned by the Crown is higher still.

"There are some privately held forest companies purchasing land, but there is not much of it out there," he says.

Canadian fibre being bought up by multi-nationals with no vested interest in providing jobs or long-term growth for the province, must be a regional concern, officials say.

"It concerns me too," Ramsay says.

That was the reason the ministry entered into a bidding process for Abitibi's private timberlands outside Thunder Bay.

"We were in the game," Ramsay says. "I didn't let this go, we tried to purchase it."

The National Bank of Canada put in a higher bid than what was accepted. The terms and conditions, including environmental assessment considerations, attached to the sale prevented the province from becoming the successful bidder, he says. Abitibi needed the transaction completed by the end of their fiscal year, which coincides with the calendar year. Time ran out.

Ramsay says he will be assessing the private lands in northeastern Ontario to determine the market value and whether bidding is necessary.

The first sales of Crown land to private interests took place with the construction of this country's railways. Today, companies usually acquire the property today by purchasing existing plant operations.

www.mnr.gov.on.ca

www.abitibiconsolidated.com

By KELLY LOUISEIZE

Northern Ontario Business