By NICK STEWART
Although the “heart of gold” beating in the City of Timmins is shining much brighter than the prospects of the local forestry industry, representatives from both shared concerns at the recent bi-annual Timmins Regional Economic Outlook conference.
Held in late May at the Porcupine campus of Northern College, the local chamber of commerce-led conference served to highlight business successes and suggestions, starting with the ailing forestry industry.
Dan Dedo, manager of Canadian woodlands for Grant Forest Products told the crowd that the U.S. housing market, a prime target of Ontario’s oriented strand board (OSB), has taken a staggering dive in recent years. Having reached a high of nearly 1.8 million housing permits in late 2005, the U.S. market slipped to 600,000 permits in March 2008, according to the U.S. Census Bureau.
This represents just one-third of the permits issued just three years ago. What’s more, 100 per cent of Ontario’s OSB mills saw curtailments in 2007, as compared to the 30 per cent of United States OSB mills which saw curtailments in that same period.
John Kapel Jr. of Little John Enterprises, who has long argued against the lack of local participation in provincial wood allocation, said the Ontario government needs to take a stronger role in supporting forestry. In particular, he says the province needs to actively support and promote secondary and value-added forestry industries in order to help them weather the economic storm.
These concerns over lack of government support were echoed by Rob Tomchick, woodlands manager for AbitibiBowater’s Iroquois Falls operations. With forest products playing an instrumental role in the economies of the North, the industry needs the provincial government to champion them much in the same way as it champions the automotive and wine industries in southern Ontario, Tomchick argues.
This matches up with many of the other measures the provincial government should pursue to try and reduce the many challenges the industry continues to face, he says. These include bureaucratic red tape and high energy prices which continue to hobble the viability of many forestry operations.
All is not doom and gloom. Dedo says the future outlook for OSB is a positive one, with global demand for wood projected to grow significantly in the coming decades. In the next 20 years, the global gross domestic product is slated to double, with per capita incomes in developing countries due to triple in that same period.
The need for wood in new housing developments and other construction efforts will not be satisfied by tree plantations in tropical countries, which is currently acting as an impediment to the North American forestry industry.
The year-round warm weather allows for rapid regeneration of trees, though the crises escalating in the global food and biofuels markets is expected to contribute to a severe land shortage in these areas. This translates to opportunities for well-managed Boreal areas, Dedo says.
Mining attendees also shared their views on the future, with the sky-high mineral prices failing to completely temper some concerns.
Rampant growth in developing nations bodes well for Timmins, with China slated to consume one-third of the world’s copper production from 2008 through 2010.
Thompson Hickey, general manager with Xstrata Copper, says this is a definite positive. The ore body at Xstrata Copper’s Kidd Creek mine remains open at depth, he says, and there remains 750-square kilometres around the property that can see further exploration.
Nevertheless, he says issues such as the high Canadian dollar continue to pose some problems; the current strength of the national currency translates to a loss of $80 million per year, he says.
The ever-popular issue of staffing problems also continues to be a hot-button problem among mining and supply firms alike. The lack of proper staffing levels throughout the entire industry is adding up to two years to procurement and engineering lead times for various projects, a process that previously took less than a year.
Chris Cormier, the general mine manager for Goldcorp Inc. agrees that the widely publicized staff shortage will continue to be a growing issue as the needs of the global mining industry swell alongside demand.
In fact, 35 per cent of the industry’s population is due to retire in the next decade, leaving a shortage of 80,000 to 100,000 by that time, Cormier says.
Further exacerbating the problem is the fact that other mining centres in the North are acting as competition for Timmins-area companies, and Sudbury in particular is a strong magnet for skilled workers.
“Sudbury drains people like Timmins’ technical people at a drastic pace, so we have to bill Timmins as the number one destination in Ontario for people to to come and live and raise their families,” says Cormier.
Terry DiTullio, owner of NorFab Metal and Machine, said the staffing problem is a particularly thorny one for suppliers, given the shared need for the same types of workers.
“Our best customers are our biggest competitors for skilled labour,” he says.
Still, the endless success seen by the mining industry is helping to drive national awareness of Timmins as a positive place to do business, attendees were also told.
J.P. Legault, owner of Panels and Pipes, provided the crowd with a personal anecdote to give an idea of the national investment community’s awareness of Timmins’ rampant growth. As he recently sat on a plane from Alberta to Toronto, he struck up a conversation with a fellow passenger, a Bay Street investment banker, and asked him about the best places to invest in Canada. The man’s response? Fort McMurray, Alberta, and Timmins, Ontario.
“We’re on the map,” Legault says. “People around Canada know about the great things we’re doing here.”
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www.truenorthnews.com/lje
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www.xstrata.com
www.norfabmetal.ca
www.panelsandpipes.com
