Fundamental change needed to save Ontario’s forestry-dependent communities—report

June 29, 2006

OTTAWA—The Ontario government must implement far-reaching forestry and hydro reforms if it is truly serious about safeguarding Northern communities and thousands of woodworking jobs, says a new report from the Canadian Centre for Policy Alternatives.

“The Ontario forestry sector needs to undergo fundamental change—change that encourages higher-value manufacturing, change that empowers communities by giving them a direct stake in forest resources and revenues, and change that firmly addresses the gaping disparity in hydro costs in the province,” says CCPA resource policy analyst Ben Parfitt. “But so far, we’ve seen nothing but Band-Aid solutions from Queen’s Park.”

The report, Public Forests, Public Returns, lays out a roadmap for change that includes turning portions of public forests and stumpage revenues directly over to communities and First Nations.

It also calls on the McGuinty government to implement a new program whereby some forests are subject to auction before they are logged. Bidding would be restricted to partnerships between makers of commodities and higher-value wood products in order to encourage greater secondary manufacturing in the province.

“Right now we face a ludicrous situation where some forest companies in Ontario actually bring in wood from as far away as British Columbia in order to make higher-value products,” Parfitt said. “We need to encourage more partnerships between primary and secondary manufacturers, especially when there are real opportunities to make more forest products in Ontario for the domestic and U.S. housing markets.”

With hydro costs comprising a third of the operating costs in some pulp and paper mills, the report also concludes that it is long overdue for Queen’s Park to appoint a regional power authority for northwestern Ontario. The authority would have powers to set regional power rates and make decisions on transmission.

“Costs to produce hydro in the northwest are 2¢ a kilowatt hour,” Parfitt said. “Yet local forest companies pay more than three times that for their electricity. Those rates might be justified were power readily transmitted between the northwest and the power-hungry south. But it isn’t. Managing the two regions separately just makes sense.”

Public Forests, Public Returns recommends a number of other policy changes that would increase R&D efforts, promote better marketing of Ontario forest products and bring logging rates to a sustainable level, thus providing certainty to resource-dependent communities and conservationists alike.


Public Forests, Public Returns is available on the CCPA web site at

For more information contact Kerri-Anne Finn, CCPA Communications Officer, at 613-563-1341 x306.