QUEEN’S PARK – As most people recognize, the impact of the forest industry also has a significant impact on the economies of areas beyond the jurisdictions of just northern Ontario.
I think I can probably assume, even though I have not heard much of the debate earlier, that there are at least some common denominators from, I would suspect, all three parties when it comes to issues related to forestry. That is that what we have seen over the course of the last 10 years, I would say—and this transformation began long before we formed government. But I am sure, whether it’s a Conservative, an NDP or a Liberal speaking, that most people would likely agree that what has occurred in this industry is probably fair to be characterized as having been a very fundamental change.
The forest industry in northern Ontario was not unused to seeing cyclical changes in the industry from decade to decade. That was normal. It’s not like it happened every couple of years, but it wasn’t unusual every 10 years or so to see changes in the fortunes of the forest industry. The people somewhat got used to that. Some mills would prosper and others wouldn’t do so well, but it was almost to be expected. I think that was part of the problem: that we’d always come out of these cycles and that things would be as they were before and that they would continue on in the way they had in the past.
I’ve lived in Thunder Bay almost my entire life, and I can tell you that that has pretty much been the history. I think, to some degree, all of us—and this predates our government. The NDP were in power from 1990 to 1995 and the Conservatives from 1995 to 2003. We’ve now had the pleasure for the last seven years. You could say that we’ve all had some responsibility for managing or mismanaging the industry. I think we all somehow felt that, no matter what, the industry would always come back, that it would always stay the same. We’d cycle through another evolution of cyclical economic factors, many of them beyond our control, and at the end of it, we’d come out and there would still be this many small sawmills scattered all across northern Ontario and there would always be a certain number of pulp and paper mills scattered across northern Ontario.
We’ve learned this time that that’s not the case. What occurred this time was not cyclical change; it was extremely fundamental in terms of the change that has occurred in the forest industry. While I’m not a historian on the forest industry, I might argue that it’s probably the first time that change of this magnitude has occurred in this industry. What is it that we’re going to do about that?
For seven years, I’ve listened primarily, I will say, to the New Democratic Party blame the Liberal government. For every sawmill closure and every pulp and paper mill closure in northern Ontario, it was the fault of the Liberal government. That’s what the NDP have said for seven years. I’ve said to some of the other northern members that we didn’t do a good enough job of speaking out against the ridiculousness of that argument. We let them repeat the same thing over and over again, and I think there were a significant number of people in northern Ontario who bought in and believed it. They tied it primarily to the cost of power. They would suggest to everybody who had a job in a sawmill or a pulp and paper mill that closed—sometimes permanently—that the reason that happened was because the Liberal government in the province of Ontario wasn’t doing a good enough job when it came to controlling power rates. That’s what the NDP did. In fact, I need to give the Conservatives some credit because they didn’t buy into that line of ridiculousness at the beginning. But I would say—
Mr. John O’Toole: On a point of order, Madam Speaker: I ask the member to repeat that statement.
The Acting Speaker (Ms. Cheri DiNovo): It’s not a point of order.
The member from Thunder Bay–Atikokan.
Mr. Bill Mauro: He might not want me to repeat when I finish the comment. But I would say that lately the Conservatives seem to be, as the election date nears, starting to trot out that old familiar NDP line a little bit more.
I wanted to talk just a bit about the electricity piece of this. You have to divide the forest industry into at least two pieces: the pulp and paper side and the sawmilling side. The suggestion by, again, primarily the NDP that somehow electricity rates had anything to do with the demise of the sawmilling half of the forestry industry is incredible.
Electricity is not a significant input cost when it comes to sawmills in northern Ontario or, without knowing for sure, I could probably say, almost any other jurisdiction in Canada. It just is not. So out of tens of thousands of jobs that the NDP like to talk about being lost in the forest industry, a lot of those jobs were in the sawmilling industry. I can tell you unequivocally that the connection between electricity pricing and sawmill jobs is simply misplaced; it’s absurd; it’s unfair.
I’ve said in this Legislature before that when NDP members would stand in their place and tell people back in Thunder Bay, Atikokan and all across northern Ontarian that, “If we just fix those energy prices, don’t worry, you’ll get your job back,” people were making life decisions: Do I need to move? Do I need to go back to school? Do I need to get retrained? They were really doing a disservice to all of those people, because what had occurred in this industry was a fundamental shift that could not be fixed by simply lowering the cost of energy by one megawatt or whatever the price may be. It was an absurd argument to make, but they continued to make it, and people bought into it. They might have decided, “I’m going to stay in my home,” or “I’m not going to try to get a job in the oil patch,” or “I’m not going to go back to school and get retrained in the Second Career program” put forward by our government.
It was a terrible thing to do. You did a disservice to people who were caught up in this economic storm, this perfect storm that affected the forest industry, as it was described. You were doing those people a disservice, because they needed to make life choices. They had a very hard decision to make.
Many of those people are my friends that I went through school with. I know the demographic very well. Many of them had a grade 10, a grade 12 education. They were 25-, 30-year employees of these particular industries and mills. They had a tough choice to make, and the suggestion was made, “Don’t worry; all we have to do is lower the cost of electricity.” It was a nonsensical argument to make, but some people believed it.
You know what? There’s no market for the products that sawmills produce. There are still some sawmills operating, and I think, in my personal opinion, when we come out of it, there are always going to be sawmills; there are always going to be pulp and paper mills. There are still some sawmills operating but they are going to be bigger. From this point forward, they’re going to have to be bigger in order to compete. That’s my belief.
The fact of the matter is, when it comes to the products that they produce, the market was greatly diminished, almost to the point of being wiped out. The Buchanan sawmills in my neck of the woods that employed thousands of people for a very long time, for decades: 90% to 95% of his product was exported into the American market—90% to 95% of it. Guess what’s gone on in the American market for the last seven to 10 years? There’s this thing called the greatest recession since the Great Depression. There is this thing called the sub-prime mortgage problem, where this incredible glut of houses appeared on the American market and you could go down there and buy a $400,000 house for $50,000. And so, guess what that meant to the housing market? Nobody’s building houses. Ipso facto, Buchanan sawmills, 95% of his product that went into the US, doesn’t have a customer anymore.
But the NDP would tell those workers, “Don’t go back to school; don’t get retrained; don’t go get a job in another jurisdiction, because we’re just going to fix this with the cost of electricity.” What a bunch of nonsense, and we had to listen to it.
It wasn’t just the recession or the sub-prime mortgage crisis; there’s a thing called the debt crisis going on, right?
AbitibiBowater, in my community, joined—they used to be just Bowater, the pulp and paper mill. They joined with Abitibi. At the time, it probably sounded like a good idea: “We’re going to join. We’re into the newsprint market. We’re in the pulp market. We’re going to join. We want to take some commodity out of the market and try to get the price up.”
It sounded like a good idea at the time. Well, a year later, the credit crisis hits. What did Abitibi have on their books? They had $6.2 billion of debt after they joined forces, and now we’ve got a credit crisis in the US. What happens?
It is amazing. I always appreciate very much—I’ve said it before. Sometimes I’m envious of the positions of the Conservatives or the positions of the NDP. Sometimes, I must say, I’m envious of the simplicity of your arguments. You just throw out energy pricing. You trot out, as it was described here a little while ago, this one-trick-pony argument and you repeat it and repeat it. You beat it into people’s brains until they don’t think there’s anything else going on. But you know what? This is fundamental change, and it doesn’t work that way.
This industry requires a different approach today. If you’re truly interested in helping those people who have lost their jobs in this industry, you might want to think a bit broader and you might want to try and change the message because lowering the cost of electricity by one cent a kilowatt hour or whatever it is your goal would be—and I never did hear what it was—is not going to bring one job back in the sawmilling industry because there is no market for what they produce. That market has been severely diminished. There are still sawmills operating. There’s some market.
If you want to do something, why don’t you go and ask the federal guys to try and do some work on the softwood lumber agreement? Get us a bigger market share. Try and find a way to address that tribunal. Every time we try and export into that market, we get shut down. It’s unbelievable, the simplicity of their argument. I must say I’m envious.
The reality of it is, we’ve helped tremendously when it comes to this industry. There are more mills that may have been gone, that may have disappeared if not for the different types of support that we brought forward, I would say, over the last five years, even more significantly, the last two or three years.
In the last two years, for AbiBo operating in the city of Thunder Bay, employing 450 people and another 300 or 400 in the woodlands, we’ve announced two programs that, combined, are saving them $25 million a year, and we think as a result of that we’re going the see further investments come from that particular facility.
But when it comes to AbiBo, I should make the point, because again it’s primarily the NDP who want to make it sound look we shut down an industry, that there were three paper machines operating at the AbiBo mill in 2003. Today, there is one. One of those machines closed in 2003. Here’s a point that I want to stress, and I hope that people following this debate on TV will really remember this point. In 2003, they closed that machine. I think there were about 150 men and women associated with the work on that machine.
But here’s the difference. When they closed that machine in 2003, before we formed government, they didn’t just close the machine, they transferred the capacity of that machine—that is, what it produced, what it made, what it sold—to another jurisdiction. Okay? So they made a decision before we were in government, “You 150 people, you’re out of work.” The AbiBo mill in Thunder Bay has nothing to do with energy prices. This is 2003. Nothing to do with it. “We’re shifting the capacity of that machine to a different jurisdiction.”
I would love to hear an NDPer stand up and tell me why that happened, because you know what the point is? All of those closures that have occurred now that the NDP want to tell you are because of energy pricing—show me, if that’s the case, where the capacity of those closures has been transferred to another jurisdiction. If it’s only about energy prices, show me where the capacity of those sawmills and those pulp and paper mills got transferred to a lower-cost energy jurisdiction. Prove your argument instead of just standing up and being demagogues on a regular basis. Because you know what? It didn’t happen.
Quebec is a lower-cost energy-producing jurisdiction than Ontario, and it always has been. BC is a lower-cost energy jurisdiction than Ontario, and it always has been. So if the case is simply about energy, how come they didn’t just close? AbiBo operates mills in Quebec. Why didn’t they just close the mill in Thunder Bay and transfer the capacity into Quebec? Because there’s no market. Right? Because the commodity price was too low. Because the Canadian dollar used to be 73 cents and it topped out at $1.10. Because there’s a shrinking market for newsprint. Because there’s global competition. I wonder if there’s a little bit more at play here, when it comes to forestry and the fundamental change that has occurred in this industry. As I say, I continue to be envious of the simplicity of the arguments that the NDP and, unfortunately, lately, my Conservative friends get to put out there.
So, what are we going to do about it? I can tell you that where I come from, people have been clamouring for change, in terms of the management of the forest industry. We’ve been hearing this for three or four years. There are quieter voices out there who understand the fundamental change that has occurred in this industry, and they know that we need a different approach to try to create jobs.
About one or two months ago, I had the opportunity to be in Atikokan—my riding is Thunder Bay–Atikokan—for a wonderful announcement. We had a competitive wood supply allocation announcement. We gave a company called Atikokan Renewable Fuels, through a competitive process—we didn’t just give it to them; they had to bid. And there was significant aboriginal involvement in their bid. We allocated to them—I’m forgetting the number—about 180,000 cubic metres. They already had 100,000. They’re going to go into a different type of market, which is where we need to be if we want to create jobs. They’re going to take an old sawmill—again, another example of an old sawmill that was closed in Atikokan when I was first elected—called Proboard. It was closed already. We didn’t create this problem. This company has bought that facility. They’re going to bring about 95 people back to work—40 or 60 of them in the facility and the balance in the woodlands—producing wood pellets, because we gave them wood. It’s a new approach in this situation to getting wood to new players who have new products; who want to create employment with significant First Nations involvement—which is one of the reasons they won the bid. This company is now going to have an opportunity to bid on being the supplier of a biomass fuel source to the Atikokan generating station.
All three parties and all three political leaders—Howard Hampton, when he was the leader of the NDP; Ernie Eves, when he was the leader of the Conservatives; and us—when we were running in 2003, committed to closing coal, but nobody committed to converting them. Well, we’ve done that. Atikokan generating station is going to be converted to biomass. This particular company that just got this wood through a new process—we’re talking about change, to address the fundamental change that has occurred in this industry. This new company now has wood. They’re going to produce a biomass product that could potentially, through a competitive process, have them become the supplier of their product to that facility. How many more jobs will that create is the point that I’m getting to. That’s Atikokan Renewable Fuels.
I’ve talked about AbitibiBowater in Thunder Bay on the sawmilling side. On the pulp and paper side, if you have thermo-mechanical pulping, it is an energy-intensive process. Not all pulp and paper mills have the same process. If you have what is called TMP, it can be a significant contributor to their operating costs. We addressed this. Anybody who still stands in this place, looks into the cameras on a regular basis and tells all of those thousands of laid-off forestry workers, “You know what? Your job is gone because this Liberal government just dropped the ball when it came to the policy”—it’s staggering to me. I’ve got to tell you, the nerve is absolutely staggering. My old friend Johnny Holbik, the Kashabowie Kid, used to say, “Billy, they’ve got more nerve than a bad tooth.” I don’t know how people do it. They say it on a regular basis. They repeat it. I guess it’s the old advertising axiom, right? Just keep saying it—10 times before it penetrates into the consciousness of your market. I suppose that’s what’s going on here. It’s not something I could do.
This bill, Bill 151, is about change. People in northern Ontario have been asking for this for a very long time and we’re delivering it.