A provincial plan to open up Ontario’s Crown forests to new and more diversified industry players should help John Hockenhull cut down on his freight bills.
The co-founder of Precision Wood Design has been trucking in birch from as far away as Pennsylvania to make base boards, moldings and flooring products at his small two-employee custom woodworking shop, west of Thunder Bay.
Though he is within the Lakehead Crown forest management unit, it’s always been off-limits to him.
“I’ve never been able to buy off of Crown land – never had that opportunity,” said Hockenhull, who imports wood from private lots in the U.S. and the Sault Ste. Marie area.
Outfitted with an infrequently-used sawmill and kiln, Hockenhull said having access to a couple hundred cubic metres a year of locally harvested logs would mean hiring four to six people to grade, cut and dry wood to launch new products and sell lumber to other companies.
“We’d be pulling all the value out of each piece of lumber to get the most dollars out of it.”
He plans on submitting a proposal to the Ministry of Northern Development, Mines and Forestry to access local birch and aspen logs as part of the province’s new Wood Supply Competitive Process announced in November.
To Hockenhull, Northern Ontario has the world’s best birch, prized by furniture makers for its bright colour and tight growth rings.
“Hopefully this (process) allows me access to start doing that,” said Hockenhull. “Getting logs has been very inconsistent for this sawmill. We have all the infrastructure set up to increase jobs right away.”
With the forest industry continuing to flounder, Minister of Northern Development, Mines and Forestry Michael Gravelle took a bold step with a “stimulus” package of his own, one he hopes will generate new investment, create value-added jobs and get maximum use out of Ontario’s Crown forests.
For the Thunder Bay-Superior North MPP, it’s all about “putting Ontario’s wood to work.”
Less than half of Ontario’s 26-million-cubic metres of available Crown wood is being harvested. Gravelle’s ministry decided to put the idle 11-million-cubic metres up for grabs.
The move is an expansion of last January’s general call for expressions of interest to find uses for piles of discarded forest slash, launched by Natural Resources Minister Donna Cansfield.
That invitation attracted 131 applicants from companies and community groups.
With the business side of forestry now shifted over to Gravelle, the second stage request for proposals has been broadened to include not just branches and treetops, but roundwood.
The wood will come from 41 management units, mostly in Northern Ontario. About 7.7-million-cubic metres is roundwood, with remaining 3.3-cubic metres being unmerchantable tops, branches and undersized wood.
Hockenhull says he is wholeheartedly in favour of Gravelle taking a stand.
“It takes courage to make any type of changes. It’s not easy because you’re going to have a backlash."
Gravelle expects some resistance, “but we think it’s the right move to make to open up the industry.”
Gravelle said he couldn’t wait for the completion of a lengthy review of Ontario’s forest tenure and price system. The move is intended to speed up the emerging transformation in value-added and green-tech forestry.
With many forestry mills shut down, Gravelle said this new process will diversify the industry and find new uses for fibre that was not being used.
His ministry promises to protect the allocation attached to individual mill operations based on a company’s "five best years" of production.The ministry identified companies frequently not using their full allocation, said Gravelle.
“We’re inviting them to tell us how they can use it."
The impression is that the government is taking away their wood source, but it’s not the case, said Gravelle.
"We encourage you to put forward a proposal ... and we’ll work with you if you can tell us how you’re going to re-open your facility."
The deadline for submissions is March 4, 2010. Gravelle said the successful applicants will be notified within six months. "If we can move more quickly I would be very pleased."
Gravelle said some weight will be given to proposals that involve First Nation partnerships.
John Valley, Tembec’s executive vice president of business development, said putting wood to work that’s unutilized, underutilized species or where there’s been chronic under-cutting "based on true underuse, is a good thing."
Where there are facilities that are permanently closed due to "structural factors" such as the newsprint sector, reallocating that fibre “is an acceptable outcome.”
However, when operations are only temporarily shuttered, such as their Timmins sawmill, due to unprecedented economic conditions in the last two years, “then that (corporate) investment should be respected and the related fibre supply should remain intact."
Valley said before reallocating wood to new users, the government needs to take into account Tembec’s future biomass needs and the company’s massive capital investment in forestry and manufacturing infrastructure.
“When lumber markets recover we will need the full volume that’s allocated to us."
Lakehead University forestry professor Mat Leitch said opening up untapped volumes of wood may be the kick-start the industry needs to reinvigorate itself.
He works with a handful of small Thunder Bay-area value-added enterprises with product research using underutilized tree species.
Leitch said it’s tough for small companies to pass a business plan with a bank or investor with no certainty of wood availability.
“Anybody who was looking to do business up here would have been turned away before because they knew there was no way they could get into a wood basket.”
The policy can only lead to growth by taking away wood from the big forest companies with shuttered mills who show no signs of production, he said.
“We should have been doing this a long time ago. If you’re not employing people up here why should we let you take our wood and let you ship it somewhere else?”
But making millions of cubic metres of roundwood available will be for naught, he said, if these new players propose grinding the forest into wood pellets.
“I will oppose that to the end. I’d like to see more (small) manufacturers or primary producers with the intent of custom-sawing for secondary producers.”
One of the companies Leitch works with is Precision Wood Design, part of a growing cluster of value-added producers taking root in a rural light-industrial park in Murillo. Hockenhull would love to see more complimentary business spring up around him.
www.mndmf.gov.on.ca/forestry/crownwood
www.ontario.ca/forestry-news
www.mnr.gov.on.ca/en/Business/Forests
