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The Government of Ontario has implemented some first steps toward improving the competitiveness of Ontario as a jurisdiction in which the forestry sector can successfully compete on a global stage.

For a variety of reasons the forestry sector has been rationalizing operations in Canadian jurisdictions, but, despite state-of-the-art, efficient mill operations, it is Ontario that has the unfortunate distinction of leading in the number mill closures and lay-offs. Steps must be taken to ensure the industry remains positioned for investment and growth in this province.

Investment is key to any manufacturing sector, and, because of Ontario's uncompetitive operating climate, investment is moving out of the province to more competitive jurisdictions. Changes must be made to improve Ontario's competitiveness.

Much more needs to be done to ensure that forestry remains a provincially significant generator of jobs and prosperity in Ontario including:

ROADS:
The Government of Ontario must fully implement recommendation # 3 of the Minister's Council Report on Forest Sector Competitiveness that recommends government reassume 100 percent of the construction and maintenance costs of primary forest roads and 50 percent of costs associated with secondary roads. To achieve parity with actual road costs, an additional $60 million must be added to the $28 million announced September 29, 2005 by the Minister of Natural Resources .

RED TAPE:
The Minister's Council Report also identified a number of “red tape” issues which can be addressed by four encompassing principles:

The MNR, in consultation with the forest industry, must:

• Streamline or remove processes (approvals, amendments etc.) which result in “high costs” to the forest industry but which provide little to no benefit to forest management or sustainability

• Introduce accountability into the MNR commitment and approvals systems to ensure that Crown commitments are met and approvals are provided in a timely manner, e.g. development of timelines, delegation of authority in case of absence, repercussions for individuals failing to meet tasks/deadlines. ( This is consistent with the October 12 Throne Speech in which the government has promised “money back guarantees” for some services such as providing birth certificates within 15 days, or paid fees are returned.)

• Develop an independent dispute resolution process to address, in a timely manner, planning and operational issues that cannot be resolved through district or regional channels

• Undertake an assessment of the socio-economic impacts associated with the development, review or revision of any forest management direction (e.g. guide/guideline development or review)

Furthermore, while efforts to reduce red tape should be ongoing, there are several priority items that need to be addressed immediately through:

• Review of the Crown Land Bridge Management Report (i.e. review provincial bridge construction standards and approvals);

• Streamlining the aggregate approval and extraction process;

• MNR providing up to date value information necessary for forest management planning (e.g. stream values, fulfilling obligations under FIM);

• Developing a process for the timely approval of new and modified stream water crossings;

• Developing a process to ensure that EA bump-up requests are dealt with in a timely and effective manner by both MNR and MOE.

• Reduce unnecessary costs and streamline the requirements/process associated with the Forest Management Guide for Cultural Heritage Values.

ENERGY:
Ontario must have an affordable, competitive and reliable energy supply. At present, our electricity supply is none of the above. High prices have forced forest product companies to curtail production, shut down mills, and lay off people. Ontario's electricity prices now rank near the top of the list of competing jurisdictions and there's no end in sight to price increases. Supply shortages and brownouts are threatening companies with unscheduled interruptions.

The Ontario government in the near term must:

• Extend price protection for electricity consumers by renewing the revenue cap on the output from Ontario Power Generation non-prescribed assets for an additional three years, to April 30, 2009

• Not commit to any further long term supply contracts until the Ontario Power Authority has published its Integrated Power System Plan and its Procurement Process and the Plan and the Process has been reviewed and approved by the Ontario Energy Board.

• Provide OPG with a clear mandate to take necessary actions to maintain its generating facilities—including the coal-fired generating stations at Lambton, Nanticoke, Atikokan and Thunder Bay—in good working order to ensure these assets can be relied upon for a minimum period of five years or longer as necessary until new, low-cost base load generation comes into service.

NO INCREASES:
Furthermore, until the forestry sector competitive issues have been addressed there should be:

• no increase in harvesting fees such as stumpage,

• no regulatory changes resulting in additional costs to the forestry sector

• no decrease in fibre supply due to legislative, regulatory or policy change

Until April 30, 2006, when it is set to expire, a Ministerial directive caps OPG's revenues on 85 percent of the output of its unregulated assets (the hydroelectric, coal and gas-fired stations that are not prescribed in O. Reg. 269/05), at an upper limit of $47 per megawatt hour. Ontario Power Generation will pay a rebate on revenues over this amount. The output from these assets represents approximately 33 per cent of all generation in Ontario.

Pursuant to O. Reg. 425/04.

Pursuant to O. Reg. 426/04.