Rethinking Northern Ontario! Northern Ontario Forestry: without radical change we shall destroy our birthright.

• Position: NEWS

In this our third edition of "Rethinking Northern Ontario" we zero in on Forestry. We have so many riches and yet we are trapped in a commodity infrastructure that leaves us vulnerable and exposed to currency fluctuations, and price pressures that are rapidly making us uncompetitive. Our primary response is to artificially cap energy prices, which is only one of the inputs. This might be a reasonable short-term strategy, but it is not sustainable over the long haul. We need to rethink what we do.

Despite the ongoing travails of the forestry crisis, there is one unavoidable fact about the future of Northern Ontario: it will continue to feature wood. A large fraction of the income flowing into Northern Ontario will be a result of the wood and wood products we send out.

How much we get for that wood will increasingly depend on how much we add value to it. It is no longer enough to be "hewers of wood". The number of people that live in Northern Ontario will ultimately depend on how much value we add to the wood we grow.

Moreover, the concept of value-added must be extended to everything we do in the North. How do we become a "value-added society," not only with respect to forestry, but also health, education, services, mining and retail.

The Mystery of Value-added

Understand value-added properly and you have the key to economic development. Value-added is really just human labour. A tree in the forest has no value. It may have monetary value, for example, someone may be willing to pay for it. It may have social value in that it provides oxygen to a choking planet, but it has no value added in economic terms unless you have been fertilizing it, pruning it, or building roads to reach it.

Strange as it seems, if you cut down that tree, you add value. From the point of view of the trucker that carries it away, that tree is worth more lying on the ground limbless and ready to be transported than standing majestically in the sun. Move it to a mill and you have added more value. Saw it into two-by-fours or chip it and you have added value yet again.

The absolute minimum value we can add to a tree is to cut it down and ship it to Quebec or the United States.

When America imposed the Dingley tariff on lumber in 1887, Ontario responded with a "manufacturing condition" that required logs to be milled in Ontario. That was the last really effective legislative initiative that Ontario has promulagated to demand higher value from our forests. We were settled as a resource extraction colony and continue to be mired in its aftermath.

Most of the northern Ontario forest industry is still producing commodities that come close to the minimum feasible value-added. Pulp paper and...