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OPINION: Three wishes for the North: number one

We need something to increase the value-added from the forestry sector across the whole North.
David Robinson is an economist with Laurentian University in Sudbury and the director of the Institute for Northern Ontario Research and Development.

What would happen if Premier Doug Ford were to give Northern Ontario three wishes? If the North could actually speak with a common voice, what would it say?

One wish would have to deal with the forestry sector. Forestry is the second largest revenue generator for the region. It affects the largest area and the largest number of communities by far.

We need something to increase value-added manufacturing from the forestry sector across the whole North. The increase in tax revenue would make it attractive for the province.

But how do we increase value-added in Ontario’s wood sector? Right now Canada is the world’s largest producer of low value-added forest products. We lead the world in newsprint exports (for a rapidly shrinking market), bleached softwood kraft pulp, and softwood lumber (for the risky U.S. market). Wood product manufacturing uses a tiny fraction of the wood supply and still generates 5.4 times as many jobs in Ontario as logging. Shifting even 10 per cent of the wood base up the value chain would be a huge win.

Organizations like Woodworks Canada, FPInnovations, and the new Mass Timber Institute are suggesting a shift to engineered wood products and cross-laminated timber (CLT). Heavy timber construction is now allowed and promoted around the globe and is potentially a major new export market that the province should target.

Mass timber construction produces tall buildings that are actually cheaper to put up than steel or concrete buildings, equally fireproof, and nicer to live in. 

Unlike steel and concrete, which require very large CO2 emissions to produce, heavy timber construction stores carbon. Producing and building with cross-laminated timber and its sister products is the biggest single economic opportunity Northern Ontario has.

Toronto is one of the hottest building markets in North America, with 40 per cent of Canada’s industrial and commercial construction. Replacing most of the concrete and steel used in tall buildings over the next half-century with heavy timber in Toronto alone has huge economics and environmental benefits. Even 15 per cent market penetration would be worth billions.

But which comes first, the chicken or the egg? We have the wood, but not the factories and the markets, which are just beginning to develop. For the North to benefit, the province has to actively encourage both the supply and demand sides.

We need the building code amended to actively promote climate-friendly, value-added mass-timber construction. 

We need colleges to start training construction workers and building inspectors for the new technologies. We need a commitment to ensure that CLT plants will have a guaranteed supply of wood, and a policy that promotes CLT.

Unfortunately, it is not enough to just know what to wish for. Industrial policy at this level takes a coordinated effort from the province. The provincial government actually has no real incentive to promote value-added production in Northern Ontario over value-added production in southern Ontario. 

The government gets the same number of jobs from a wood manufacturing plant in the south as in the North. It gets the same tax revenue. To get Queen’s Park to promote CLT in the North will take serious pressure from Northern politicians. Time to organize.

There are things that Northern leaders can do at home as well. To help develop a local market for our CLT, councils across Northern Ontario could immediately adopt a policy of supporting wood timber construction for all public buildings. 

This would kickstart the local market and create opportunities for our own architects and builders to gain experience in the new technologies. When we don’t see public buildings in the North using cross-laminated timber, it shows the local council does not understand regional economic development, letting our biggest opportunity slip away.

Councils could also encourage firms to start producing CLT locally. According to FPInnovations, a single plant could bring an investment of $40 to $50 million. The market will develop quickly and the North could easily support 10 to 20 plants.