QUEEN’S PARK – I am truly honoured to be here today to begin debate on third reading of Bill 151, legislation that would enable us to modernize the system that governs how public forest resources are made available to private companies and who manages our crown forests; in other words, our forest tenure system.
This bill is crucial to the economic health of so many northern and rural communities across the province. A modernized forest tenure system would create more flexibility, it would allow us to respond to our fast-changing economic environment, and it would enable us to put our wood and the people of Ontario to work. This legislation would indeed enable us to achieve those goals.
The proposed legislation and commitment to modernization is an extremely strong sign of this government’s confidence in the future of forestry in Ontario. The value of our forests to the province and Ontarians is absolutely undeniable. With 85 billion trees, our forests represent 2% of the world’s total. And 80% of the 71 million hectares of forested land in Ontario is publicly owned. The government of Ontario oversees the management of all these crown forest lands.
Forestry is a key economic driver in the province, supporting almost 260 Ontario communities, and many of those communities are highly dependent on forestry jobs for their survival. And while the importance of the sector remains vital, there is also no denying the setbacks that we have seen in recent years. Mills have been closed or idled, and certainly jobs have been lost. Despite that, our commitment to the forestry sector remains extremely firm. Since 2005, we have made available more than $1.1 billion to support the forestry sector through programs like the forest sector prosperity fund and the loan guarantee program, also the wood promotion program, the northern pulp and paper electricity transition program and, of course, its successor, the northern industrial electricity rate program and many more.
We want the forest sector to be able to adapt to change. We want it to thrive in the face of the challenges that they have. With that as our desire, the current tenure system, which prescribes how companies obtain crown wood in this province, also needs to change.
Although our current forest tenure system has changed over the years, one of its basic tenets—that, in exchange for a long-term wood supply, primary wood-using mills owned by private companies have responsibility for and strong influence over the management of Ontario’s public forest control—has not been revised for many decades. In good times, when the mills were profitable, the old system worked well enough, I believe. But the economic recession has had a significant impact on Ontario’s forestry sector and on northern Ontario’s economy.
In a letter to me, and copied to the standing committee, one forestry company said recently that, “The current model of embedded business interests and competitors is costly, disruptive, combative and unsustainable,” from a business perspective. When mills were idled or closed, it meant that no one was using the wood, with limited opportunities for new entrants. You can be sure there were new entrants who were asking for wood and who were keenly interested in investing in northern Ontario. The fact is, the current system just doesn’t meet our needs any longer.
By modernizing the system that makes crown forest resources available to the industry, our goal is to protect and create jobs, attract new investment and make Ontario more competitive, while ensuring that Ontario’s forests continue to be managed sustainably. Bill 151 enables us to do this. It is a chance to make the allocation of Ontario’s wood more responsive to market demands, to move toward a more competitive market system and to certainly create new opportunities for entrepreneurs.
Bill 151 would allow the province to move forward with two new governance models developed in collaboration with industry, stakeholders and aboriginal communities. One of them is called local forest management corporations, and the second governance model we’re calling the enhanced shareholder sustainable forest licences. Both models would make it easier for new entrants to participate and for aboriginal and local communities to be involved in and benefit from the sector. Certainly that was a message we heard consistently from our extensive consultations. While there clearly continue to be debates over the mechanics of the change, I think I feel comfortable saying that there is a strong consensus on the need for responsible and measured change.
We’ve had years of dialogue across the north. By the way, we’ve made substantial modifications to our original plan based on the discussions and consultations we’ve had, and we’ve worked closely with industry to accommodate its concerns.
For example, to address concerns about the benefits of the local forest management corporations, we’ve amended the bill to limit it to two pilot LFMCs for the first five years and to require that there is a review of those first two LFMCs and other tenure arrangements before establishing more. It’s a very important amendment we brought forward on the basis of concerns expressed by industry in particular.
To address concerns—and there were concerns expressed—that the government’s commitment to move toward the enhanced shareholder sustainable forest licence model was not visible in Bill 151, we have put forward amendments to the bill to allow for the cancellation of various wood supply instruments for the purpose of establishing an enhanced shareholder SFL. In direct response to concerns raised by the forest industry and various communities, we have made other amendments on the timber licence cancellation provisions to provide greater certainly around its application and use. Again, we are keen to work closely with industry to help us move forward together.
In terms of that particular measure, and to be quite specific, we’ve deleted a provision that would have allowed the government to develop further grounds for timber licence cancellation through a regulation. We’ve also improved the wording for cancellation in circumstances of wood hoarding, following input from a forest industry working group and others. Again, one of our goals is to see that wood hoarding is not a reality in the future. May I say, we’ve also added a very important right: One of our amendments is a right of representation in that provision.
I think I need to say at this point—perhaps it’s a bit harsh, but I think it’s true: It probably wouldn’t matter to some how we amended the bill. A significant number, I think, probably felt they wanted to stay with the status quo. It was a system that worked well for them and left them in a position to control that wood. It’s also fair to say that it’s not surprising, and perhaps it’s even understandable, that some do fear change. Some are seeking more delay, and some are certainly very aggressive in arguing further interests. That’s fair game, but we feel strongly that this was a measure that we needed to move forward on.
I guess it’s also worth saying that our government could have sat back; we could have done nothing while the forest sector continued its decline. Instead, we made the determination that the status quo was not an option, as we felt that the forest sector was simply not going to improve on its own under the present system. So our government stood up and we took the bold step to modernize Ontario’s forest tenure system—again, very careful to do it in a balanced and measured way, with an extraordinary level of consultation with industry, with communities and with their aboriginal leadership. From my perspective, to not support this legislation is to not support the people of northern Ontario. To not support this legislation is to stifle growth in the forestry sector.
The reality is, we committed to proceeding with this transformation a couple of years ago, and we are fulfilling that commitment. We have a very strong responsibility to the people of Ontario. This is a crown resource. It is the people’s resource.
Despite what you may have heard, I can assure you that there is indeed significant industry support for this bill. It was made clear that by putting in the needed amendments, many industry leaders can and do indeed support this legislation. We have heard from both individuals and companies that recognize that change is necessary. They agree with the need for that change and they do support this legislation.
Certainly, there is a lot of work left to do to further develop the details and the implementation plans before a new tenure system could be put in place. We recognize that. This is a significant change, and it will take time. It’s important for me to say that it is very much our intention and our plan to work with industry, to continue to work with industry, to continue to work with municipalities and other stakeholders and our aboriginal communities to ensure that this happens.
Working together, this new tenure modernization bill and, may I say, the provincial wood supply competitive process would support new investment in the forestry sector while creating and sustaining jobs across the province. In fact, the wood supply competition was created in the interim, in the short term, to put wood and people back to work. We have seen that, during our very tough economic times, in essence about half of our wood supply was not being used. Through the wood supply competition to date, we have been able to announce that more than 3.4 million cubic metres of wood per year will be put to use.
Businesses are creating and protecting good jobs. As a result of the announcement, so far we are creating and retaining more than 1,500 of them. They are expanding their existing operations. Others are establishing new enterprises.
We don’t have time to go through all the announcements related to that, but there are some really good ones. They’re all great, but there are some particularly telling ones. How about a family-owned sawmill like Garden Lake Timber near Thunder Bay? It has been in business for just over 30 years and never had a confirmed wood supply. Now they do, and they’re able to create some more jobs at that important company.
Whitesand First Nation, north of Thunder Bay, has plans to build a sawmill, a three-megawatt cogeneration facility and a plant to manufacture clean-burning wood pellets. We were able to provide them with a wood allocation that was crucial to them moving forward.
In our announcement a couple of weeks ago—actually, maybe 10 or 12 days ago—a leading-edge clean energy solutions company called Rentech is going to build a plant in White River to produce biodegradable, low-carbon synthetic jet fuel—the first commercial plant of its kind. That almost defines the innovative proposals that I think we were looking for and hoping to see.
Those are just a few examples. I can certainly give many others, as can my colleagues from northern Ontario. But that gives us a good sense of the good things that can happen when we make unused wood available.
There’s no question that the wood supply competition process was long, it was complicated, it was challenging, and it continues to be. But what we look at now in terms of our legislation today is to imagine the benefits for Ontarians if we’re able to get approval for Bill 151 and a modernized tenure system that would see unused wood more quickly and consistently made available to support new and existing businesses. We believe strongly that it’s time to act. We need this change now to create jobs and opportunities in Ontario’s forest sector. It’s time to support this bill.
Michael Gravelle MPP
Minister of Northern Development, Mines and Forestry