There has been good news when it comes to the forest sector in northwestern Ontario in the wake of nearly a decade of doom and gloom. Softwood lumber prices have rebounded and there is expanded production underway at sawmills in Ear Falls and Kenora with the two plants now providing about 250 jobs. In White River, the previously closed sawmill has now been operating for about five years. Resolute Forest Products just announced its third quarter profits were up and it would pay a special dividend and its optimism for the future recently translated into an announcement that it would invest $53.5 million on its northwestern mill operations.
According to the MNR, in 2006, there were 40 large active sawmills in Ontario (mills that processed more than 50,000 cubic metres annually) of which 34 were in northern Ontario. There were 58 medium size mills (processing 5,000 to 50,000 cubic metres annually) in Ontario of which 14 were in northern Ontario. There were nearly 60 small sawmills in Ontario (less than 5,000 cubic metres in production annually) of which 19 were in northern Ontario. The sawmill industry was distributed throughout the province, but large employment intensive mills were concentrated in the north. By 2012, Ontario was down to about 97 mills – a 40 percent reduction from 158 to 97 sawmills.
As for the pulp and paper mills, Canada as a whole saw a decline from 50 to 30 pulp mills between 2000 and 2014 – a reduction again of 40 percent. Approximately over the same period, total employment in logging, paper and wood products in Canada fell from 308,664 to 190,651 – a loss of 118,000 jobs or a drop of about 38 percent. As for northern Ontario, in 2003 there were 12 large pulp and paper mills in northern Ontario while by 2012 the number had gone down to 7 – a drop of 42 percent. Since then, the mill in Iroquois Falls has also shut down and while there were plans for redevelopment it has since suffered an unfortunate fire.
The forest sector crisis in northern Ontario saw the loss of over 20,000 jobs in the northwest part of the province alone. It was not just a downturn but in many respects the end of an entire way of life. Well-paying industrial jobs in many small communities that supported a small-town friends and family oriented lifestyle vanished. After the destruction of the forest sector crisis that saw pulp and sawmills shuttered and significant employment losses, we are now seeing new investment and some employment recovery. However, despite this recovery in investment and employment, it is unlikely that the size of the industry well ever again return to its former glory.
The following figures present an overview of the evolution of employment in northwestern Ontario’s resource sector. Figure 1 plots the number of resource occupations defined by Statistics Canada as production, supervisors, technical, laborers and harvesting in natural resource, agriculture and related activities. Note that these numbers include all resource activities and not just forest sector ones. Still, the good news is that the number employed in resource occupations bottomed out in 2012 and has since been on an upward trend with the last few months of 2018 showing a distinct surge. In 2012, monthly resource employment in NW Ontario averaged 5600 whereas in 2018 to date it has been 7270 – an increase of almost 30 percent. Much of this has been due to the mining sector but forestry has also played a role.
Figure 2 shows a similar trend, but it is annual resource employment by industry rather than occupation with resource industries defined as forestry, fishing, mining, quarrying, oil and gas. Needless to say, for northwestern Ontario this would mainly be forestry and mining. Here, the rebound seems to date from 2014 with annual employment going from 3000 in 2014 to 5100 in 2017 – an increase of 70 percent. However, from 2002 to 2009 total employment plummeted from 9000 to just under 3000 - a drop of about 67 percent.
So resource employment is on the rebound, but we are nowhere near the peaks reached in the period from 2000 to 2003 just before the forest sector crisis took hold. The remaining firms are more efficient and capital and technology intensive and therefore will not employ as many people for similar levels of output as produced a decade ago. Still, the sector has survived and in some respects is even thriving which is good news.