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Wood supply shortfall predicted for years (07/04)

Northern Ontario’s declining wood supply should come as no surprise to forest companies that assist the province in writing forest management plans.

Northern Ontario’s declining wood supply should come as no surprise to forest companies that assist the province in writing forest management plans.

What has been unforeseen for the industry is the combination of a strengthened Canadian dollar affecting exports, the impact of the Canada-U.S. softwood lumber trade dispute and an inability to find truckers over the winter months due to skyrocketing fuel and insurance rates, says the Ministry of Natural Resources’ Bill Thornton, a director in the industry relations branch.

Thornton says for legitimate business reasons, many northern companies did not get as much wood to their mill over the winter months.

“That was driven more by economics than by the absolute supply side.”

A wet spring did not help matters, causing extended conditions of half-loads being moved and wood not being moved as efficiently as it normally would.

In assessing the wood supply shortfall, Thornton says there may be huge allotments of timber available for harvest, but it is not economical for some companies’ thresholds to pay for a cubic metre of wood.

Thornton says the problem reached its peak last fall, where many money-losing companies chose not to build roads and bridges. As a result, over the winter months they were not able to move as much wood to their mill for inventory as they normally would. In Ontario, most wood is cut during the winter months.

“They’re seeing it at its worst moment right now with labour stoppages. Those operational woodland decisions made in the fall bear fruit in the spring.

“If you’re not moving (wood) in December, January, February, March, if you don’t have a lot of wood coming in, chances are you’re not going to make it through May and June without some difficulties.”

In the long term, the Ministry of Natural Resources has predicted a wood supply shortfall for years.

MNR reports indicate wood supply for the major species group is expected to fall below the current level of industrial demand in the near future.

Current forecasts predict SPF (Spruce-pine-fir) supply will fall below demand in about 15 years and not recover fully for 80 years. For poplar, the forecast is for supply to fall below demand in about 10 years, with recovery also expected to take about 80 years.

Some mills are using less desirable species like white birch and are installing technologies to take advantage of small-diameter logs.

Thornton says Ontario has developed a reputation for using technology to saw small logs as a response to the supply available.

From a capital investment point of view, many sawmills have adjusted their equipment to make use of smaller-diameter wood, and the MNR gave away tops that previously were left in the bush.

Another big adaptation is with pulp mills that previously wanted only conifer chips and now, increasingly, they are adjusting their mill mix to take more hardwood or species they would otherwise ignore.

“We still have, in this province, a surplus of low-grade tolerant hardwood,” particularly low-grade pulp-wood quality maples and oaks along Lake Huron’s North Shore to Algonquin Park.

“But we can’t get anyone to use it. We’ve put Request for Proposals out and had very little success in finding anyone who can make use of that volume.”

Thornton agrees with industry officials that conservation guidelines governing the writing of forest management plans must be reviewed.

A ministry review is underway, involving many technical experts and stakeholders, to look for redundancies, in an effort to logically group them to protect wildlife habitat and recreational areas. But solutions are not easily arrived at and the process will likely take a couple of years.