Ontario Report

Tenure Reform

Following requests for comments and a series of forums across the province, the Ontario government has modified its original plans for tenure reform. In its original proposal, government had outlined a new governance model known as Local Forest Management Corporations (LFMC); government agencies that would replace current licensees in the management of all Crown forests, and oversee the competitive sale of the timber in a given area. In addition, the proposal sought to rationalize the number of management units from the current total of 43 to somewhere between 5 and 15.

The notion of a new governance model being imposed in the midst of the successful implementation of Co-operative forest management agencies was not well received. Clearly, it is too early to abandon the Co-op model which is showing increasing signs of viability, as well as the potential for innovation as locally focused forest practitioners group together to create efficiencies, both operationally and in terms of market opportunity, for the diversity of products and values to be managed on the landscape. Similarly, the rationalization of the number of management units was deemed excessive, though many agree that some level of rationalization is necessary in order to provide for viable management units. Government is now proposing the following;

• recognition and support for a move to enhance Co-operative Sustainable Forest Licenses over the next 5-7 years as a viable and appropriate tenure reform

• commitment to limited implementation of two Local Forest Management Corporations (LFMCs), which will be evaluated against predefined criteria prior to potentially broader application

• maintain wood supply commitments to companies that have consistently utilized their allocated fibre.

One of the least understood aspects of the government's original proposal was the financial model. In that model, all of the revenues generated in the management unit would stay within the unit in order to provide for effective funding of all of the timber and non-timber management priorities, for which there is currently no funding beyond what can be squeezed from a 2”x4"or tonne of pulp. Revenues to government would be recouped from any surpluses generated, but primarily would be realized via the tax base created through the employment and industry associated with the land base. This aspect of the original proposal still deserves careful consideration by government if it hopes to achieve all of the objectives it has on the landscape, including enhancing the health of the forests. The original proposal only envisioned this financial model as possible within the context of government led agencies, the LFMCs. It is time the government put more faith in the capacity and integrity of the Co-operative tenure management model, and provide management units with all of the tools required to responsibly steward the public's resources now and for the future. From the perspective of Ontario's silviculture practitioners, the most pressing issue facing forest management in Ontario is the lack of a viable funding model to ensure that the province's forests are healthy and able to sustain the wealth of timber and non-timber values that the public expects from its forest patrimony. A financial model that recognizes the importance of re-investing in the forest is an opportunity that should not be missed.

“... it is too early to abandon the Co-op model which is showing increasing signs of viability...”

Wood Supply Competition

In an effort to provide access to unused and under-utilized fibre, the Ontario government launched a wood supply competition and recently announced the first successful applicants (www.news. ontario.ca/mndmf/en/2011/02/creating-jobs-in-ontarios-forestry- industry.html). From electricity generation, wood pellet and briquette production, to traditional lumber and niche market products for the mining sector, the successful proponents will share over three quarters of a million m3, and create and sustain more than 500 jobs.

The Ontario forest industry has come through a difficult time and there are still new casualties, particularly in the northwest with the further decline of the once mighty Buchanan empire. At first glance, the small initial list of successful applicants will not create a host of new manufacturing facilities in the province. When will there be more announcements regarding the rest of the 11 million m3 that are available? As numerous market analysts agree, the ever cyclical lumber supply dynamics are shifting back towards a constrained supply in the coming years. With a re-invigorated model of forest management via Co-operative tenure holders, new opportunities for market synergies with bioenergy, and a government commitment to move forward in the allocation of unused and under-utilized timber supplies, Ontario needs to ensure it is ready to benefit by effectively encouraging the resurgence of the wood manufacturing sector.