The billion dollar growth industry.

With more than half a billion dollars in new investment in the past 18 months, Saskatchewan's forestry sector is emerging as one of the province's bright lights. But it could get much brighter in the next year or two.

Economic and Co-operative Development Minister Eldon Lautermilch finds little to smile about in monthly job figures that show the painful and persistent decline of the grain economy. But bring up forestry and you get a different expression. This one has him beaming.

The past year and a half has brought the announcement of an OSB (oriented strand board) plant at Hudson Bay and another one in the Meadow Lake district. Each is worth $200 million. Weyerhaeuser has built the biggest and most modern sawmill in Western Canada at Big River. Smaller mills and plants have also been popping up. While he's not announcing anything at this point, Lautermilch adds, "to suggest we could see a billion dollars in investment in the short haul is not a stretch."

Expansion of the forestry industry flows from an analysis showing the province was utilizing only half of the northern forest's potential, says Lautermilch. With that research in hand, the government began formulating policy aimed at two things: fostering industry expansion but also incorporating Saskatchewan's demographic reality into the mix.

With the Aboriginal population projected to grow by 25 per cent over the next 10 years while the rest of the population ages, ensuring Aboriginal people participate in economic development is paramount.

"If we're going to strengthen this economy, it's clear we're going to have to include First Nations and Metis people," Lautermilch notes.

The result was a policy that encouraged First Nation or Metis participation in new forestry projects.

The new rules opened the door on a new era of partnerships, giving the province's Aboriginal people the opportunity to secure an equity stake in the industry as well as jobs. It also makes forestry one of the cornerstones of Saskatchewan's long-term economic strategy, a plan that includes a target of 30,000 new jobs and increased investment.

Over the past 20 years, the industry has gone from a primary producer of basic products to one that is deeper into the so-called value chain that includes paper production and more specialized products. The prospects for continued development remain positive, despite the latest trade irritant over softwood lumber exports, as industry and regulators alike identify new opportunities throughout the north and east portions of the province.

The new guidelines also produced an array of new companies. Wapawekka is a joint venture involving Weyerhaeuser in Prince Albert and area First Nations producing dimensional lumber products. On the west side of the province, the Meadow Lake Tribal Council, long a leader in forestry development, has a stake in a new $200-million OSB plant planned by Tolko of Vancouver as does the Metis of the northwest.

Ray Ahenakew, chair of NorSask Forest Products, and chief executive officer of the Meadow Lake Tribal Council welcomes the new arrangements, viewing it as an opening that will give Aboriginal people a chance to own a piece of Saskatchewan's wealth-generating capacity.

"The words are the right thing," he says. "Time will tell how it's going to work. At this point it looks like it's going to work."

Both he and Weyerhaeuser Saskatchewan vice-president Steve Smith see two challenges. One is the amount of fibre, or wood product, that is available. Both Ahenakew and Smith agree the forest was under-utilized but whether or not it was at 50 per cent of capacity is debatable.

The second is the Aboriginal community's ability to secure the equity capital needed to become bona fide participants in the industry's growth.

Weyerhaeuser heard First Nations and Aboriginal leaders' desire to participate in the development of resources in their region. After watching the success of the Lac La Ronge First Nation's Kitsaki group, Smith says the company decided to partner with local First Nations in Wapawekka. Kitsaki represented both a financial success story but proof of the potential for partnerships between the Aboriginal and non-Aboriginal communities.

"That gave us the confidence to go into uncharted ground for a big private company," Smith explains. "We thought it was the right thing to do. We heard the First Nations leadership wanting to participate and to be true business partners."

Being a 'true' partner means bringing your own capital to the play. That, say both Smith and Ahenakew, poses challenges for First Nations who historically have built up little or no reserves of investment capital.

Smith says the $22 million needed to fund the Wapawekka project is a relatively small investment for a company the size of Weyerhaeuser, but for individual First Nations looking to finance their half of the deal "it was huge and created challenges for them."

"For the First Nations, it's a good first step for inclusion but it has to go beyond that to funding structures. If someone didn't have capital, you'd be on the outside looking in. It could put the Aboriginal people in the position of relying on your partners to get you over the hump," Ahenakew said.

Nonetheless, the policy of including First Nations and Metis in future development gave MLTG the opportunity to begin shopping for opportunities and potential partners. Ahenakew says they danced with several players before joining up with Tolko.

"There is no question, without government recognition of the importance of the Aboriginal connection to the land, we never would have been at the table."

To that extent, the new initiative is working. It's put the Aboriginal population -- the segment of the population posting the fastest growth -- on the corporate playing field.

For MLTC and NorSask, a major player in Saskatchewan's forestry sector, however, this is only the beginning.

MLTC and two partners purchased the Meadow Lake saw mill from the provincial government nearly 15 years ago and transformed it from a perennial money loser into one of the most efficient mills on the continent. Over the years, MLTC has also acquired sole ownership of the plant, providing a source of dividend income for the nine First Nations in the Council.

Despite this success, says Ahenakew, "we're infants in the industry. Two generations from now we might be major players at the table." And that, he adds, is important given the number of First Nations young people that will be seeking jobs and opportunity in the years ahead.

Since the formation of Wapawekka north of Prince Albert, market conditions have been challenging but, Smith says, the worst is behind them and while financial success is still down the road, there are other parts of the partnership that have already yielded results.

As Weyerhaeuser looks ahead, a large percentage of its current work force is aging.

"They're beginning to retire. We're not well equipped to replace them," says Smith in noting that the Wapawekka partnership has introduced an entirely new and younger workforce to the industry and the company -- people who have skills applicable to any aspect of Weyerhaeuser's operations from lumber to pulp and paper and OSB operations.

Ahenakew adds the one hidden benefit of including First Nations in the partnership is resource stewardship.

MLTC holds a 50 per cent stake in Mistik Management which oversees forest management work in the northwest. Ahenakew says First Nations involvement in this aspect of the business has brought renewed emphasis to the word 'sustainability.'

"We are connected to the land," he asserts. "It's good that we can cut trees -- it's a lot better when we can put them back."

He adds that Mistik is still catching up reforestation efforts that fell behind before MLTG acquired the NorSask mill.

"When we started, we took one (tree) and put four back. We're caretakers of the land. It's been a good fit for everyone involved. It's probably been overlooked (First Nations ownership in the industry) that it's a built-in safeguard."