The province is considering setting up a special fund to help the struggling forestry sector in northern Ontario, similar to a $500 million program that helps the auto industry attract new investment, Premier Dalton McGuinty said Wednesday.
"We are looking at some similar kind of support that would act not as a bail-out, but rather as an incentive for new investment that'll put our industry on a more competitive footing," McGuinty said.
"I think our specific responsibility is to help through this transitional period."
Ontario has spent less than $400 million so far from its auto fund, which McGuinty said was used to lever $4.5 billion in new investment from auto giants Ford, General Motors and Toyota.
He hopes to use the special competitiveness fund for the forestry sector in exactly the same way.
McGuinty and Natural Resources Minister David Ramsay met briefly Wednesday with mayors from northwestern Ontario to hear their concerns about the impact of soaring energy costs on mills and others in the forestry sector.
Ramsay agreed the industry is in crisis, and said he hoped to have the government's package to help the forestry sector ready by the end of September, although he refused to speculate on how much money the province might make available.
"We need to help the industry be more competitive with its neighbours," Ramsay said. "That's the thrust of the advice we have received from the industry."
In addition to the fund, northern mayors and mill owners want a 50 per cent fuel tax credit for hauling wood from the forest to the mills, and they want the province to resume paying for the construction and maintenance of logging roads.
They also want help with their soaring electricity bills, which Ramsay said isn't as unrealistic as it may sound.
"There's a lot of ways to address the high energy costs, and that is by helping them build co-generation facilities," he said.
"(Forestry) creates a lot of waste steam and that could be harnessed to produce electricity."
The opposition New Democrats, however, don't believe the government will do enough to help the forestry sector out of its current crisis, and said other northern industries also want provincial help.
"They're boxed in," said NDP critic Gilles Bisson. "If they offer a subsidy to just the forestry sector, the mining sector would be right behind them, along with others."
Conservative Leader John Tory welcomed McGuinty's promise of help for the forestry sector, but wondered why more hadn't been done after a government-appointed panel made a series of recommendations last June.
"What are you waiting for?" asked Tory. "I don't know what's holding them up."
He said there is "a complete disconnect" between the province's Liberal government and the people who work in the forests and municipal leaders in northern Ontario, and warned more mills could close before the government acts.
"There are decisions being made in boardrooms and on shop floors as we speak that are negative to the interests of northern Ontario and the forestry industry," Tory said.
"If they're (government) going to do something, they should do it soon before some of those decisions are made."
Ramsay said the province has already established a $350-million loan guarantee program to help northern mills, and added that he meets with individual companies on a daily basis.
"We're doing sort of one-off negotiations with companies as we work on the overall policy," Ramsay said. "We're not talking about subsidizing losers. We're talking about investing with winners and moving on to have a successful industry."Canadian Press
