By James Neeley
Everyone agrees change is needed in the forest industry.
But just what that change should be, everyone seems to be on a slightly different page.
At the April Ontario Professional Forestry Association 2009 conference and annual general meeting change was the hot topic: It was right there in the title, Whose Forest is it Anyway? The Role of Tenure, Pricing and Ownership in the Future of Ontario's Forests.
"Change is occurring as we speak but there will be guiding principles under which those changes will occur," said Ontario Minister of Natural Resources Donna Cansfield.
"What we can deal with internally will be based upon sound business principles — not a free for all. And it will be based on some given goals within the government: The land, the trees, the resource belongs to the people of Ontario. That's not changing."
The ideas on changes to tenure — the broader system that handles timber, pricing, licensing, agreements — varied at the conference.
"I want change," said Dr. Shashi Kant, professor in the faculty of forestry at Toronto University.
And considering all the circumstances, his first suggestion is separation between the policy and management.
"You create a separate entity in the government that does only business," he said, explaining it's the "corporatization" of the industry.
But from Alberta came a more laissez-faire approach.
Industry on public land works, said Dr. Marty Luckert, professor at the department of rural economy at the University of Alberta.
"They are entrepreneurial savvy and they have efficiency benefits,," he said. "But we take all that and then we put them in in a box.
"We need to figure out where we can loosen up in that box," he said.
In privatization, people tend to think of government selling the land, but often what is done are long-term leases, said Dr. Harry Nelson, assistant professor in the forest resource management department at the University of British Columbia.
The government is not in the business of selling timber, he said, but corporatization of the system could create separation of government operations and "the distance helps put business functionality into the system."
Ontario already has a corporate entity managing a forest, Cansfield said.
"We have the Algonquin Authority, which manages the Algonquin forest. I don't know what the future will bring. We need to have those discussions and at this point we are only at that conversation," she said, explaining a review is in the works.
Driving change in the forest industry is a change in economics, Nelson said.
"The prices for lumber are lower than they have ever been. Market pulp was good, but it's falling off ... and the new production regions, Brazil, Uruguay, we can't compete with.
"And newsprint, well we all know where newsprint is going," he said.
The other factor is, Nelson said, decades of harvesting has diminished quality and raised costs.
Both Kant and Luckert agree the current economics can't support privatization.
"But the government can use the land as a public service, not only timber, even if there is a loss overall.," Kant said.
Luckert, on the other hand, isn't sold on the crown-corporation-as-a-solution idea.
"There's lots of different ways to do it," he said. "You recognize there are two sets of values, and try to have one corporation look after both of them or have them separate within a mechanism that allows them to interact."
One area all parties agreed on was the future of the industry is in new products.
"Invest in the future, not failing industries," Kant said.
Bio-products may be the answer, he said. "But the government needs to support research and the creation of the industry."
Ontario has just begun to scratch the surface of biomass possibilities, Cansfield said, pointing out Wabigoon Lake and Pikangikum First Nations, which have attracted investors from Finland.
"Who knows what the future will bring as long as we make it attractive for people to come, ensure the regulatory red tap isn't such a barrier and they have a wood supply they can rely on. Those are some of the guiding principles."
The Ministry of Natural Resources will be sitting down with experts to look at what it should be as we move forward, Cansfield said.
"It's a whole new exciting world."
www.opfa.ca
www.mnr.gov.on.ca
