The forestry industry’s national economic footprint:

BACKGROUND:

• Total sales of $81 billion in 2004

• Source of 916,200 jobs – 361,100 direct jobs

• Over 300 forestry dependent communities (2001)

• Largest private sector source of employment for Canada's Aboriginal peoples

• Highly skilled labour force – history of innovation (modernization)

• Represents over 60% of Canada's trade surplus

• A leading exporter to both established and emerging markets

• Global leadership on sustainability and forest certification issues

CHALLENGES:

• Entry of new low cost competitors into the global market

• Rapid appreciation of the C$

• High and rising wood and energy prices in eastern Canada

• Fibre shortages in the east, Mountain Pine Beetle in the West

• Structural changes in major end-use markets for pulp and paper sector

• Softwood lumber dispute

• Continued profitability of segments of the wood industry dependent on continuation of the unprecedented North American housing boom

• The industry is vulnerable to any further shock

FEDERAL POLICY RESPONSE:

• The federal interest lies in three areas:
  Exports: Ensuring that this sector, which is a large part of Canada's export success, and is well positioned for longer-term success, is able to achieve its full potential.
  Land-Based Economy: Ensuring that the many communities across Canada that depend on the economic success of this industry do not become casualties of this “perfect storm” of near-term risk factors.
  Innovation: The industry is a significant participant in and catalyst for the market for Canadian research and development. But a more intensive and focused effort is needed to catch up with global leaders.

• There is a unique opportunity for the federal government to provide leadership in strengthening the competitive position of the sector in both the immediate and longer terms.

• Building on previously announced initiatives, the government can provide immediate support for vulnerable communities while helping lay the groundwork for sectoral success in the longer term.

OBJECTIVE:

Ask the Federal Government to match the Ontario Provincial Government's Prosperity Fund of $150 Million over 3 years.
The Federal government's regionally specific program would compliment the efforts of the Ontario government's Prosperity Fund by providing funds that would be used to support and stimulate the following initiatives.

1. Federal Government Loan Guarantee Program:

• Provide softwood lumber producing companies with loan guarantees to offset the cost of illegally imposed US duties and tariffs

2. Energy:

• “green” energy alternatives, including co-generation, energy efficiencies and conservation projects

3. Wood Promotion:

• Projects to support expanding markets for wood products through the development of demand in non-residential and other non-traditional uses. (Woodworks)
  
• Branding Ontario/Canadian forest products in domestic and global markets as being of the highest quality, from a value, performance and environmental standpoint.
  
• Support initiatives in North American markets to promote a “wood culture” and increase per capita consumption of Canadian forest products.

4. Value-added and Transformation projects:

• Provide incentives for value-added and transformation projects to prevent loss of employment, stabilize employment and/or create new employment in northern Ontario communities threatened by mill closures.

5. First Nations capacity building

6. Worker Training:

• Retraining and transitional

• Federal Government Loan Guarantee Program:

• Provide softwood lumber producing companies with loan guarantees to offset the cost of illegally imposed US duties and tariffs