Missed opportunities may become a thing of the past if funding is approved to create a platform, which will allow Ontario’s wood products industry access to a slice of the $35-million federal forestry funding pie for value-added development and off-shore marketing.
British Columbia has one, Quebec has one, so why does Ontario not have an association representing all sectors of the forestry market?
“To the extent that other associations have had successes, we may have missed out on some forest opportunities,” says Steven Banducci, forest business analyst of the Ministry of Natural Resources (MNR).
“If we had a group similar to the B.C Wood Specialties Group, that would be a good thing for Ontario.”
But Ontario does not have an association that has primary and value-added manufacturing under one umbrella, he points out.
Primary industry refers to lumber material like standard two-by-four pieces, while value-added or secondary products are wood materials that have been altered to suite a niche market. For example, some lumber companies are making wood fence kits that are ready for assembly.
The B.C. association promotes British Columbia forestry products around the world at events, constructs seminars, trains workers and explores and funds research and development areas.
To belong to the group, members have to pay a fee, however, it is not the committee’s main funding resource, Banducci says. Most of the funding comes from Forest Renewal B.C.
“That is the agency that collects stumpage fees in British Columbia. They give large grants to the Wood Specialties Group.”
As well, as noted in the Forest Renewal BC project profiles, Weyerhaeuser in British Columbia obtained a grant from Forest Renewal B.C.’s research program to invest in a $2.4-million project over five-years “toward researching forest retention along small headwater streams.”
University of Victoria also received a $50,000 grant to organize a forestry forum last March.
Quebec, much like B.C., is another province with a good track record in the forestry industry, says Bill Love, vice- president of technical development for the forest product group at Tembec.
In Love’s view, Quebec established a sector strategy and therefore was able to develop a strong primary and secondary industry with a large supplier base. Interest is also taken in the research and development of the sector.
So has Ontario missed some viable opportunities? Love thinks so.
“Ontario doesn’t have the same focus in terms of providing support to primary wood products industry (as does B.C. or Quebec),” he says.
“It is not important in the sector strategy. They like automobiles and real estate.”
However, other prominent industries are not the only obstacles blocking the lumbering sector road, Love says. Some of the forest challenges lie at the provincial-ministry level. For example, it is unclear which ministry to approach when it comes to lumber and manufacturing.
“If it is trees (one is interested in) then it is the Ministry of Natural Resources (MNR). When it falls under manufacturing a product well, we’re not sure where it goes.”
In contrast, Quebec’s manufacturing of wood, be it secondary or primary, falls under the province’s MNR, Love says.
Aside from accountability issues, Love has a fundamental statement for the lumber leaders.
“If the government is not pro-active then I would think that some of the key industries like Domtar, Tembec and Buchanan would have to go to the government and say ‘ What are you going to do for us. We realize we have a role to play and money to spend, but you guys have to belly up to the bar,’ or do we want to have a sector strategy that says we are going to grow with jobs and wealth generated by this forest sector and measurable targets.”
Perhaps a hint of where the future of the forestry industry is heading is currently taking place. A proposal put forth to the Canada Wood Export Program by the Ontario Lumber Manufacturers Association (OLMA) asks for funding assistance to market Ontario lumber in Mexico and in Europe.
Specifically, the group is asking for a portion of the cost-shared $35-million pie, Banducci says.
“If we get the funding, the projects will be implemented in 2003 and hopefully the industry would be reaping the benefits by 2004.”
The proposal is timely since lumber negotiations with the United States have been strained due to high duties levied on imported Canadian softwood lumber.
“When trade actions happen and put us in a bind, it would be advantageous for companies to look off-shore for marketing potential,” he says.
Companies should also look to establish a stronger value-added product market.
“The exchange rate is not as critical (with value-added products) as it would be with (primary)commodity market, and the (secondary) products are outside those items that attract a duty,” he says.
For instance, some companies are now making pre-built walls containing insulation that can pass through the US borders without duty tariffs.
The OLMA expects to hear, by the end of April, if they have been approved for funding.
