I had occasion to take a phone call recently from Kelly Louisieze, who is the managing editor with the Northern Ontario Business publication. She got into my head the idea that I might have something to say about our current forestry woes and if there were any bright spots. It might be the Scots/Irish in us, or just that stubborn streak that refuses to quit, which is so much a part of Northerners, that filled out the time we talked.
What we talked about is what we always talk about - Americans and their shifty trade practices. Well if it wasn’t them, it would be someone else, like the English, who were doing us wrong. It is after all our choice to do business with them.
Yes we do subsidize our forestry operations. Our workers do by owning trucks and harvesting machinery used to cut and deliver the wood to mills, and the mill workers do by giving up wage concessions and our entrepreneurs do by borrowing to the hilt while waiting for the monies in the trade account to be returned.
All done, so that the products made can be sold to the U.S., at prices held low by the efforts of the Fair Lumber Pricing Coalition who are protecting their voting and harvesting pals, in Congress.
Well we must not forget that our trees provide a premium slow growth fibre, which is far superior to the fast growing plantations to the south. As well our system here is an entirely different system to that of the Pacific Northwest, whose products we are supposedly harming.
I can understand if British Columbia was the culprit, but it has a market based pricing regime in place and they ship out valuable Douglas Fir logs to the world market.
So why are we caught up in this high-end drama? Is it because we are a threat? No, it is because we have failed to define clearly enough that we are different. Plus we have not recognized that the owners of integrated paper mills providing newsprint and pulp mills providing tissue paper raw material, have transitioned to a more higher value revenue line of products. The resulting impact is to throw our round wood sawmills to the vagaries of the marketplace, without the benefit of any economy of scale.
If and when our money is freed up from the clutches of the U.S. trade lobby, it is possible to see some daylight, but it will not be an easy transition.
It is not unreasonable for our investors and entrepreneurs to be cautious when thinking about moving into the higher value wood or engineered products. Unless it is a transparent and open market the U.S. offers for these products, I find it hard to be critical of them.
They have to find about $ 250 per cubic metre, to put in place the means of production, and them provide the working capital. It is a huge challenge. Additionally new machinery investments have to be considered by the forestry service organizations, to meet the requirements of regulations.
We must do all we can to assist workers and forestry entrepreneurs to meet these challenges. It has been done in the past and it will be done again. However, it will require a concerted effort from all levels of government. Perhaps the creation and the means to have a National Forest Accord, which sets standards for labour and investment across all jurisdictions, will help, not only to enhance mobility, but to bring us into balance with others operating in the boreal forest in Europe.
I have the utmost confidence in our people and I will continue to do my part to stand up for them.
Harry Kelly is a stategic initiative economic development coordinator for Greenstone. He has been a former director of this division and holds a degree in product engineering from the UK. Since 1959 his specialties in Canada evolve around industrial engineering.
