One of Canada's last great company towns will not go down without a fight, said its sawmill general manager.
Dubreuil Forest Products (DFP) mill manager Dave Jennings said despite the government's rejection of his company's application for Crown fibre in the provincial wood supply competition, the dimensional lumber producer will find a way to carry on.
“We're going to fight on, we're not going to quit, we're not going to go away and we're going to do whatever it takes to ensure that the community and the mill survives.”
Jennings called the province's plan to put Crown wood back to work “anything but fair” and said the Ministry of Northern Development, Mines and Forestry's (MNDMF) decision to strip his mill of wood supply will “imperil the town” and affect future livelihoods.
Jennings is part of a campaign to save the franco-Ontarian town of 773. Established in the early 1960s by the Dubreuil brothers who built a sawmill just off the Trans-Canada Highway, north of Wawa, the idled mill had been limping along for most of the past decade.
The U.S. homebuilding slump and economic crash forced the shutdown of the sawmill and planer operation in June 2008, forcing the layoff of 225.
Jennings blasted the ministry in an April letter to Northern Development, Mines and Forestry Minister Michael Gravelle after the company's application to retain its annual softwood allocation of 196,000 cubic metres for the Magpie Forest was rejected. The company also asked for an additional 296,000 cubic metres of softwood from the Big Pic Forest in a plan to recall workers and operate the more modern side of the mill when North American lumber markets recovered.
The wood traditionally allocated to Dubreuil went to Terrace Bay Pulp, Haavaldsrud sawmill in Hornepayne and Lecours Lumber in Hearst.
The Terrace Bay wood (part of the troubled Buchanan Forest Products chain) was withdrawn from the competition as part of the refinancing negotiations with lender Callidus Capital to restart the mill last October.
Jennings takes issue with the ministry's selection criteria based on a points scoring system, in particular its evaluation of the social and economic benefits of the Dubreuil proposal, which scored three of 30.
Jennings said to suggest that a mill, woven into the town's social fabric, that has provided economic benefits to the region for 50 years, “doesn't contribute anything in terms of social or economic benefits is just ludicrous.”
A follow-up conference call with the ministry didn't offer any clarity and Jennings felt the whole process “was basically slanted against the solid wood industry.”
Besides producing lumber, Dubreuil also supplied chips, hog fuel and wood shavings for Terrace Bay Pulp, St. Marys Paper and Flakeboard in Sault Ste. Marie.
In a meeting with Gravelle, Jennings said the minister chose not intervene in the process.
“To select one (mill) over another and save 100 jobs (in Hornepayne) at the expense of 225 jobs when there is probably room for both just doesn't seem right.”
However, Bill Thornton, the ministry's assistant deputy minister for forestry, said Dubreuil was simply “out-competed” by more “solvent” neighbouring sawmills that are in much better financial shape to put wood to work.
In an emailed response, Thornton said Dubreuil has been closed for three years and is bankrupt.
“So while DFP officials may indicate they 'intend to reopen' the mill, their financial ability to do so is very much in question, relative to other sawmills that received wood in this competition.”
Thornton said DFP has a lengthy list of unsecured creditors “who will not be paid” and the company owes the province “millions of dollars” in unpaid stumpage fees. The largest secured creditor, Buchanan Forest Products, has six sawmills in receivership or bankruptcy.
Given the circumstances, Thornton said “one has to seriously question the ability of the organization to reopen this mill once it reverts to them following the bankruptcy process.”
Thornton said there have been talks with Buchanan officials on how the Dubreuil mill can be best utilized in moving toward value-added opportunities.
“It's very unfortunate for Dubreuilville, but it makes sense to allocate Crown timber to those mills that can realistically use it.”
Thornton said a third party fairness commissioner oversaw the entire evaluation process of 115 applications to “ensure our decision making was fair. That fairness commissioner has endorsed our approach to date and considers it to be a fair process.”
The ministry considers its scoring system used in all applications to be confidential information.
Jennings responded that in their conference call, the “consultant” used by MNDMF made it clear their job was to ensure that the ministry's “self imposed rules” were applied consistently. He questioned the logic in awarding wood supply to other closed privately-owned mills that are probably in the same financial shape as Dubreuil.
During the ministry debriefing, Jennings said the issue of bankruptcy was never raised as part of the decision, adding “MNDMF seems to have no qualms about awarding wood to companies such as AbitibiBowater,” which filed for bankruptcy protection last year.
Michael Gravelle defended his ministry's selection process to build “an industry of top performers.”
In a response to a June 13 statement by Dubreuilville Louise Perrier, who accused the McGuinty government of trying to destroy her town, Gravelle sympathized with the community, but said he will not dictate the results of the competition. The government's appointment of a fairness commissioner ensured there was independent “oversight” of the entire process, said Gravelle.
“In the end, the higher scoring proposals were successful and the lower scoring proposals were not.”
Jennnings said the minister has the “sole and absolute discretion” to intervene, but has chosen not to and is intent on allowing “the most forest dependent community to die.”
