Hauling Ontario wood to Quebec competitors: wood being sold to Quebec threatens Ontario manufacturers.

Two northeastern, value-added forest companies are taking issue with the provincial government's action to sell their wood supply to Quebec competitors. Grant Forest Products in Timmins consumes more than one million-board feet of poplar a year for their oriented strand board plant. However, since a labour dispute closed the mill in early September, up to 100,000-cubic metres of wood has been sold to companies in Quebec upon approval of the Ontario government, says Bob Fleet, vice president of woodland operations and environment for Grant.

[ILLUSTRATION OMITTED]

"The wood we see as being critical to ever opening the mill again is being sold to our competitors, so we don't understand why the government of Ontario would let this happen," Fleet says.

Even if the company was to resolve their labour differences, there is no guarantee the mill would open again because the wood being harvested is the company's closest feed source. Mobilizing logging crews for areas farther away means the company's operating costs double and this makes "opening the mill almost impossible."

"Frankly, this wood should have never been cut," Fleet says.

Binding contracts were signed under the forest license agreements and their license holders, in this case, Domtar. The current situation conflicts with at least one of those contracts, Fleet says. Gaetan Malette, Domtar's vice president of Ontario sawmills, did not want to comment on the matter.

Grant has control over one week's supply of wood. The remainig 51 weeks of the year Fleet's inventory comes from larger competitors operating in the same area.

Down the road in Timmins on Hwy. 101 Little John Enterprise is experiencing some challenges of its own. Owner John Kapel, Sr. told the Ministry of Natural Resources he would not harvest his respected conifer lots this winter because of a surplus, but would in the new year. He has discovered that the ministry approved Quebec based-Scierie Landrienne, would purchase the fibre from their Timmins Forest Product operations where they own a 51 per cent share.

"That wood has to stay until next year because we don't know what is going to happen next year," Kapel says.

Gerald Cregheur, a logging technician with Landrienne says the company had to undergo an extensive approval process where six other Ontario mills had the first right of refusal before they could pick it up. That does not satisfy Kapel.

"I signed a letter with the Governor General over that wood. It is mine for life," Kapel says. "Every year it is renewed for five years. I have another year to go and it is not supposed to be cut because it belongs to me."

Kapel says Quebec legislation dictates no private or public wood leaves their province in a round form. In Ontario however," there are places where the wood is barreling out of the district to Quebec (in raw form)," he says.

Ontario's historic flows indicate no more than two per cent of Ontario's Crown wood goes to Quebec, Minister of Natural Resources David Ramsay says. In fact, the province is a net importer of raw wood receiving material from New York, Minnesota and Manitoba. It does not receive Quebec fibre. The circumstances around the two mills have left Ramsay defending his position on wood harvesting. Not approving the transfer of Ontario wood to Quebec means "I would have to put all the bush workers out (of work), so tough, that is the way we do business."

Kapel says most of the workers going into the lots are from Quebec.Loggers fuel up in Quebec, drive trucks into Crown lands and haul out hundreds of conifer loads back to their province. Up to 90 loads have been taken off Kapel's licensed area alone.

As for the inventory closest to the Grant operation, Ramsay says, "if Grant is producing material then it is their wood, if not, we have to keep the work going. They are the guys out of work and I am not going to put the people out of work because the buyer has a temporary labour dispute. That is not fair to families in Northern Ontario."

In spite of many northern mills closing from a lagging American housing market, Ramsay says the province has "gotten off relatively scot-free," in comparison to the Quebec neighbours where more than half the mills are shut down. This comment found in the Canadian Press came on the heals of Tembec's closure in Smooth Rock Falls, Timmins and Red Rock and announcements of major restructuring is impending for Thunder Bay's Bowater plant.

In fairness, the David Ramsay-Dalton McGuinty government has done more for the forestry sector than previous governments, yet Fleet cannot "understand why provincially they are doing the right thing and yet locally they are getting it so wrong by allowing our wood to go to our competitors in another province."

Ramsay says there is a market for fibre in Quebec and if companies continue to stockpile it in Ontario no revenue is coming in and "you can't keep working without payment."

BY KELLY LOUISEIZE

Northern Ontario Business