The forest sector in Northern Ontario is in the midst of dramatic change. The current economic crisis is resulting in the rationalization of mills and companies with the associated negative impacts on communities. The forest products landscape will be significantly different when economic conditions improve.
Successful mills in Ontario will have a diverse product mix, with the largest profits coming from a higher value products including bio-products, bio-chemicals and building systems.
Mills in the future will be smaller, drawing fibre over shorter haul distances. They will work with downstream consumers to ensure products meet the specific, changing needs. This will lead to new businesses and products, with a "green" label since the product comes from sustainably managed forests.
A prospering forest industry in Northern Ontario comes with a number of challenges. Companies in Northern Ontario do not have the financial capacity to fund the needed transformation. The existing players are important because they have the technical expertise and own the infrastructure that is needed to convert trees into the novel products. This is a critical asset if we are to transform the forest sector to create new products and processes. The concern here is that this prolonged economic downturn will result in the loss of critical infrastructure.
Fortunately, the federal and provincial governments have recognized the need to stimulate the transformation of the forest industry and are providing a number of programs that either support the industry at large or specific companies. It remains very difficult for companies to commit the investment needed for transformative technology when the very financial viability of the company is uncertain.
Governments must develop policies and programs that support the transformation of the northern forest economy. They must facilitate cooperative arrangements between existing industry and new entrepreneurs; take a longer view of importance of the sector to the provincial economy and resist becoming too preoccupied with quick fix solutions. Without some of the policy changes that have been suggested by the industry that will lead to a reduction of costs, even the production of high value novel products will be at risk.
Fortunately, Ontario is blessed with abundant supplies of high quality fibre. Infrastructure is in place that would be very expensive and difficult to replace. We have billions of dollars worth of milling capacity and a world class forest management system. The forest management system will provide the advantage of a "green" label in the production of bio-products and bio-chemicals from sustainably managed forests.
The Centre for Research and Innovation in the Bio-Economy (CRIBE) is positioned to exploit a unique advantage for the evolving forest industry in Ontario. A close working relationship with the auto parts manufacturers in southern Ontario and the chemical industry in southwestern Ontario, who are very interested in moving to bio-based products, providing an opportunity unique to Ontario and ensure new, higher value products are developed by the forest sector. Working together will strengthen all three sectors.
CRIBE will enter into funding partnerships leading to bio-mass, bio-energy products. The future will see fewer, stronger mills, focusing on value and products rather than increased output. Existing companies will transform to become profitable or disappear.
M. L. Willick is the Interim chief executive officer of CRIBE