ONTARIO REPORT
by William F. Murphy, RPF General Manager

Forest managers in Ontario are saying that there will be less furnish cut for their mills and less saw logs cut for dimensional lumber. Other products that normally use wood fibre will also be down. This is the sign of the times. The dollar is still high and costs do not seem to be dropping. To produce a profitable product, companies are renegotiating for additional union support, or even going as far as amalgamating with other companies to combat the influence of new opportunities coming into the marketplace.

A workshop was held on the topic of co-op sustainable forest licences: “Are They the Future Forest Management of Ontario?” Speakers discussed this “new” direction that the Ontario Ministry of Natural Resources (OMNR) is working towards, but there were probably more questions raised than answers given. The OMNR recognizes that there are too many existing forest management areas (SFLs), and they are looking to reduce these again to a number that is less costly to them and hopefully easier to manage. There are existing co-op SFLs in Ontario, and overall they seem to be doing well, with managers overseeing the day-to-day operations. They appear to be successful in separating management from the operations. 

Some companies are involved with both types of SFLs, and they have experienced hidden costs that arise when developing a co-op. They feel that the method of managing a new co-op is essentially the same as managing a single SFL, except there are more players at the table. Overseeing the SFLs becomes the responsibility of a management group where each company is represented. 

The First Nations, on the other hand, feel that once again they are not being consulted in the formation of either of the SFL types. The OMNR is putting the responsibility onto the companies to deal with their issues. They do not see things changing in this regard.

The SFL is not a moneymaker, but just the opposite. It’s expensive to start one and to maintain its integrity. Companies coming into one of the newly formed co-op SFLs are investing their years of work, roads, regeneration, and successes into the hands of another management group. 

What happens if a co-op fails? One forester believes it would create a real mess, as it would necessitate litigation to see who gets what, from the old inputs to the new successes. If the boundaries had changed, do the old boundaries come back into effect? Who becomes the new manager? Is it the original SFL holder or will a new scenario come to head?

There are commitment holders who definitely see the benefits of co-op SFLs as they now become a player in the direction of wood flow and planning development strategies.

Questions arose regarding co-op participation - is it strictly limited to the companies presently managing the single SFLs? This inquiry came from some of the companies that supply regeneration services to the present SFL holders. Since business decisions are made by a number of players at the table instead of one entity, suppliers feel that they should be part of the team as regeneration is a high priority to the Crown, SFL holders and suppliers alike. It seems that if a business has the funds and is willing to put them into the system, (and funds can be calculated on a per meter basis) the company should be allowed to become part of the team.