Power, politics and the flammable forest.

Generally, I don't mind the smell of fish if it is on a plate nestled next to a baked potato slumbering under a little sour cream. Fish, as a metaphor for failed trusteeship of a natural resource and decline of an industry, is another matter.

Northern Ontario, like Newfoundland, Nova Scotia, New Brunswick and Prince Edward Island have certain advantages and responsibilities when it comes to our stunning natural resources. We have an obligation to harvest responsibly and not to destroy future income value with shortsighted policies. We are already paying for bad decisions in forest management and both the government and the forestry industry companies are responsible.

If you want some reality therapy talk to Frank Dottori, president of Tembec.

What we are doing is not sustainable economically or ecologically and we are going to pay a price in Northern Ontario.

There will be consolidation in the forestry sector in Northern Ontario and it will could run up to 20 per cent of capacity and employment.

The industry says it is up to government to help communities that will be affected as they are preparing us for the downsizing. It is not on top of what is going on already. Remember the billions paid out when they closed down the cod fishery?

In a few short years we will be running out of fibre. What we have planted will not be mature in time to replace what has been harvested. The government and the industry can't even agree on what fibre is available or how serious the problem is.

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We get here for familiar reasons.

Companies exist to make money. Politicians exist to get reelected. It is a flammable combination. There is no incentive for either party to plan for the long term. One measures profit quarterly, the other gets elected every three or four years. That's about as far ahead as they can see. Historically, if companies wanted to sit on a fibre quota for a rainy day the government said use it or lose it. We'll give the quota to someone else who will create jobs with it.

For their part, the industry is fixated on volume, not value. The more wood through the system, the more profit. We are running out of volume so the business model has to change. So does the governance model.

Dottori thinks the idea of what amounts to an auditor general for the forests in Ontario makes sense. It takes the data out of two self interested parties and puts it in the hands of an independent office that should be able to cut through the self-serving bias that arises when people want to make money or get elected. The forestry auditor would report directly to the legislature. Frank thinks David Ramsay, the Minister of Natural Resources, is looking favourably on such a move and he is optimistic.

Our disease is that we have too much natural wealth. We have not learned how to create it.

That is about to change.

Even with enough fibre from the places we could get it economically, we can't forget the softwood lumber war, the added cost (about 20 per cent) of the strengthening Canadian dollar and--very importantly--the cost of energy.

The most actionable item is the cost of energy.

Frank believes the British Columbia "powersmart" initiative which promotes the creation of biomass energy, which has lots of potential with saw mills and wood processors, is the right way to go. It means the province would buy energy from these projects at a price that would have the effect of reducing the price of energy to forestry companies. Frank says better that than subsidizing wind farms.

Dottori makes a lot of sense. The problem for us and for Frank is that if he doesn't start making money soon at Tembec, he may be the consolidatee instead of the consolidator and Northern Ontario will have lost a visionary and supporter and Frank his job.

The stakes are high for all of us.

Michael Atkins is the president of Northern Ontario Business. He can be reached at [e-mail].