Mill owners fear North's wood, jobs on route to Quebec.

Logging trucks from out of province come into northeastern Ontario to pick up a load of wood harvested from private or Crown lots, then haul it back to their province for processing.

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Mayors, forestry operators and workers see an entourage of cross-border workers passing through their town weekly, and this practice has some people downright concerned, if not outraged.

Fed up with watching Iroquois Falls wither slowly into a ghost town, Gary Crotteau, forestry worker and town councillor, along with other northeastern community members, formed the Ontario Forestry Opportunity Coalition (OFOC). Their goal was to stop the shipment of round wood crossing the borders, and the hemorrhage of jobs leaving the province.

In the 1970s the Town of Iroquois Falls boasted approximately 1,600 workers directly and indirectly related to the forestry industry, almost four times as many as the current workforce today, which is estimated at 420. Close to one-third of the houses in the town are up for sale, and the remaining residents are in retirement mode. Large companies in the area appear to be unmotivated by value-added opportunities, in spite of incentives from the province, so the matter is left to the communities, Crotteau says.

He remembers compiling information for the OFOC and noticing northeastern forestry-dependent towns located close to the Quebec border have experienced a decline in population. He also noted most of Quebec's sawmills are strategically placed 30 kilometres from the Ontario border.

"If you add two and two, you know the reason why they are there," Crotteau says.

"We all saw contractors from out of the province come into Ontario harvesting the wood and bringing it back to their province. They are harvesting from private and Crown land. It's rampant. It's happening all over (the North)."

In fact, Crotteau has witnessed head-hunters searching for private land in his region.

A sawmill owner who chooses to remain anonymous says he is frustrated with watching his livelihood drive past his door.

"(Sawmills) in Quebec are just out to massacre everybody in Northern Ontario," the Ontario sawmill owner says.

"Every little load that (Quebec forestry workers extract from here) represents, I don't know how many hours of labour, and at the end of the year that makes up for a lot of people."

"I started this business from scratch and ma'am I have been through hell and back and I am still going through it. To see what is going on now, that is unbelievable ... unbelievable."

Quebec has re-regulated its trucking and trailoring legislation laws. Ontario tractor trailer operators carrying logs can no longer haul into Quebec since the dimensions do not conform to Quebec standards, Crotteau explains.

"I could not understand why forests governed by the Ministry of Natural Resources with Ontario tax dollars would more or less have a free for all for people out of the province that don't contribute to the (Ontario economic) system."

There is no level playing field, Crotteau says. Tax dollars are being eroded by allowing work to be taken out of the province.

There are fewer positions available to young people specializing in the industry, and Iroquois Falls Mayor Kenneth Graham is concerned.

"We are losing our jobs," Graham remarks, and losing young skilled workers from the North.

"It's our wood; we should be able to work our wood."

However, companies and private bush owners who subcontract to out-of-province workers are looking at the dollar value. In a time when softwood lumber tariffs imposed by the U.S. have been upheld by the World Trade Organization, most companies are looking for ways to stay afloat. Bowater Inc., Domtar and Abitibi Consolidated have reported net losses in 2003, however, that is of no consequence to Graham.

"I know there has to be some drastic changes in how large forestry companies operate, but as far as I am concerned, too bad. This (subcontracting to out-of-province workers) has gone on long enough," Graham concludes.

Northeastern Ontario is unique in such that it is an exporter of wood to Quebec, unlike other locations that follow the Ontario-Quebec border that are net importers. If the government remedies the problem in one area it will affect a market in another, Bill Enouy, mayor of Kirkland Lake says.

"So what do we do, take from Peter to pay Paul?" Enouy questions.

He says the problem does not lie so much in private wood being taken by out-of-province workers, but suggests the crisis stems from the control of public wood. Under the Timiskaming Forestry Alliance, companies hand business plans in to the Ontario government that detail future harvesting plans. The government then allocates allotments of wood taken from designated regions to the various companies.

"Lately what has been happening is because Timmins and Cochrane are running short of logs, some wood that is traditionally directed to the mills in our area has been allocated to go north out of the area," Enouy says.

"That to me would be a bigger problem than the Quebec problem because you are taking away from small mills that are barely surviving and putting into super mills."

While that may be accommodating for large companies, it certainly is not beneficial for workers who are directly or indirectly affected by the forest industry, Enouy explains.

"Local wood has to stay local. It cannot be going into other areas. If independent sawmills can get the wood, they can add on a second shift," Enouy suggests.

In addition, he says that 90 per cent of wood produced in Northern Ontario is transported to southern Ontario for value-added products, and that is hurting the northeastern economy. Not long ago investors came in to Kirkland Lake to look at the potential of a value-added facility. The problem was not so much in generating the money, but in obtaining wood supply in spite of having capital behind them.

"Everyone has the wood tied up," Enouy explains.

To remedy the situation he suggested to David Ramsay, minister of natural resources, that a portion of the public wood should be made available to private enterprises for people wanting to start up a value-added facility.

Although no comment was made with respect to wood allocation, Ramsay says value-added opportunities will not come from communities wanting to initiate a secondary industry, it will come from companies, and he will give priority to value-added projects.

Gone are the days of little sawmills operating in every town. Instead, Ramsey says companies can produce products out of wood waste and underutilized tree species, perhaps even identify shrubs and plants that can contribute to the biomedical or bio-energy sectors.

Ramsey adds the northeast can certainly make room for plants like the Weyerhaeuser Business Trus Joist, the largest TimberStrand plant in the world, that is hailed as a value-added success in the northwest.

"There are hundreds of thousands of cubic metres of wood underutilized that can be converted into value-added products and the technology is there," Ramsay insists.

As for the OFOC's mandate to stop out-of-province workers from harvesting northeastern Ontario's private and Crown timber, the minister has yet to respond, but the organization would like government intervention, Crotteau says. Only then can the region have the wood necessary to build value-added facilities into second industries. The organization has gathered 7,500 signatures on a petition and forwarded it to the minister.

Ramsay says in reference to out-of-province workers harvesting on private land, "What would you want me to do? It's a free country."

"If you want a business climate, how much interference do you want from government?" he asks rhetorically.

www.weyerhaeuser.com

www.domtar.com

www.abitibiconsolidated.com

www.tembec.com

By KELLY LOUISEIZE

Northern Ontario Business