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Video producers, airlines object to ONTC expansions.

Two business decisions made recently by the North Bay-based Ontario Northland Transportation Commission (ONTC) have touched off a debate concerning the role of the government agency in Northern Ontario's economy.

Last month the province announced that norOntair, the airline arm of the commission, will be initiating twice-daily Dash-8 service between Thunder Bay and Kenora in the new year.

Earlier this fall, the commission unveiled Ontario Northland (ON) Productions - its new video production house.

"They're two symptoms of the same problem," says Doug Reynolds, president of Corona Communications, a Sudbury video production house. "We have a provincial government that is strapped for cash and suddenly willing to follow the entrepreneurial bent of people within Ontario Northland."

However, ONTC board chairman M.D. Sinclair of Sudbury insists that both activities are consistent with the mandate of the commission.

The commission's stated mandate is "the efficient operation of passenger, freight and telecommunications services in Northern Ontario." Its diverse operational divisions include rail, air travel, bus charters, truck transport, marine, telecommunications, tourism, consulting and land development.


To date Canadian Partner and Bearskin Airlines of Sioux Look-out have given the ONTC its most vocal opposition.

Canadian Partner spokesman Peter Grobaeur claims that up to 50 of the airline's employees, including 25 pilots, will lose their jobs as a result of norOntair's decision to fly the 37-seat Dash-8s into Kenora.

"It (the move) has serious implications for us. It's going to be devastating," Grobaeur predicts.

However, Sinclair charges that Canadian Partner is using the norOntair expansion as a scapegoat for layoffs it had already announced.

Harvey Friesen, president of Sioux Lookout-based Bearskin Airlines, estimates that between 20 and 25 of his employees will lose their jobs because of the increased competition.

However, during Question Period in the provincial Legislature on Nov. 20, Northern Development Minister Shelley Martel said Bearskin had failed to meet her challenge to prove the claim.

Martel, whose ministry is responsible for Ontario Northland, said the addition of Dash-8 service was requested by the residents of Kenora.

The minister was challenged by Progressive Conservative leader Mike Harris to explain why the government would use tax dollars to compete with other airlines while some communities such as Parry Sound and Nakina have no regularly scheduled air service.

"Their (norOntair's) original mandate was to serve areas that the private sector was not willing or was not ready to serve," Friesen says. "Obviously they have a new mandate. I'm just not aware of what it is."

"norOntair is getting beyond their mandate," adds Grobaeur.

However, John Wallace, ONTC's vice-president responsible for norOntair, argues that the provincial airline only stepped in after the private sector failed to meet the public's demand for improved air service.

"It's a competitive situation. We're not saying that they have to leave the marketplace. They're just afraid of competition," Wallace says.

Friesen argues that Dash-8 service is not economically viable in Kenora, pointing out that his airline only handles 21 passengers per day out of that centre.

However, in the Legislature Martel claimed that the service will break even in the first year and make a profit in the second.

Martel was unavailable for an interview, as was Peter Dyment, president and chief executive officer of Ontario Northland.


Three privately owned Northern Ontario video production companies - Corona Communications, First Generation Video Production of North Bay and Commercial Video Productions of Thunder Bay - have written Martel objecting to Ontario Northland's entry into their industry.

They have complained that ON Productions is competing in a saturated market with the financial resources that enable it to utilize superior technology, thus threatening existing businesses.

"The market is shrinking, and with the government getting involved it's going to shrink more," predicts Peggy Gerriok, director of Commercial Video Productions.

Sinclair defends the creation of ON Productions by explaining that the operation is producing several promotional videos ONTC plans to use to advertise tourism opportunities in Northern Ontario.

In addition, the chairman says the videos will be made available to communities in Northern Ontario for their promotional efforts.

However, it was ON Productions' involvement with the 1991 Northern Ontario Business Awards which sparked the protest.

"In the short time Ontario Northland Productions has been in operation, we have seen lavish and expensive advertising and pricing practices that can only be described as predatory," stated the submission to Martel. "The most obvious example concerns the recent productions for the Northern Ontario Business Excellence Awards."

Michael Atkins, a spokesman for the awards and publisher of Northern Ontario Business, responds by stating that the ONTC sponsored the production of the video.

Atkins explains that the awards committee annually seeks out corporate sponsors for the awards, the video and the awards banquet. This year's sponsors also included Canadian Partner, Peat Marwick Thorne and Centra Gas.

"And we were pleased to accept it (ONTC's sponsorship)," adds Atkins. "That's the sum total of our involvement with them."

However, this explanation has failed to satisfy the objectors, who point out that ONTC's donation was paid for with taxpayers' dollars.
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Title Annotation:Ontario Northland Transportation Commission
Publication:Northern Ontario Business
Date:Dec 1, 1991
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