Tenure reform or bailouts?(ECONOMICALLY SPEAKING)(many business depends on Forestry)

The Americans aren't going to bail out the forestry industry. American housing starts reached a 17-year low in August last year. Then they fell more. For the first half of 2009, Americans will start about half their normal number of new homes. They won't need much Ontario lumber for a couple years.

If this is true, forest jobs will continue to disappear, and forest companies will continue to fade.

So what should we do while we wait?

The Northern Ontario Sustainable Communities Partnership (NOSCP) sees the current crisis as an opportunity. Instead of campaigning for cash transfusions for the industry, NOSCP wants us to look at alternative forest-tenure systems.

Tenure is about rights to the forest. In Ontario, virtually all rights are vested in the provincial government, which hands them over to forestry companies. If the last 30 years tell us anything, the system broke down long ago.

It isn't just NOSCP that thinks the system is broken. The business press wants to fix the problem by handing more rights over to the companies. They argue that a system with stronger tenure rights for business would encourage investment. Why plant if you are not sure that you'll get to harvest the trees? They have a good case.

The alternative is stronger tenure rights for northerners. Why not hand control over to the people who depend on the forest? Go for small government instead of big government instead of big government. Democracy instead of corporate management. Diversity and sustainability instead of monocultures. That is the NOSCP suggestion.

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NOSCP is proposing a system of community forests. Communities that make the decisions about their own environment and their own economy. About 11 per cent of the world's forestry system is under community forestry already. Community forests are expanding in British Columbia and Quebec. It is the Ontario system that is losing ground around the world.

The idea that the government in the south should control all the resources in Northern Ontario goes back to the time when no one lived in Northern Ontario. Whoa, you say! The North was never empty! There have been people here since the ice age. That's true, but it's legally irrelevant.

When Northerners signed the Robinson Treaties in 1850, they accepted the legal fiction that Northern Ontario was empty (except for the reserves). The people who moved in later got reserves called municipalities. The province kept the resources. It still keeps the resource revenues.

But forests don't generate much revenue for the province anymore. Forests have become a big headache. Companies are failing and there is almost no secondary industry based on the forests. Secondary industries can't even get started in most cases because of the forest tenure system. Environmentalists are making new demands. Climate change is a growing threat.

The northern forests are Ontario's Afghanistan. The Province of Ontario needs an exit strategy.

So hand the forest over to Northerners. Spend some money developing a really democratic local forest governance system. Then get out. Why run the North as a resource colony when you can let Northerners do the work and just sit back and collect income taxes?

The only way for the province to make money on northern forests is to get more people involved in managing the forests and in creating forest products. Value added is a human effort. The current system sheds labour to survive. To generate wealth, put the forest in the hands of the people who want to create jobs.

But how can the province hand the forest over to Northerners? It could just give every Northerner 1,000 hectares of forest harvest rights. Let them trade. Let the market sort it out. This would be like the tradable fishing rights that seem to be working with some fishing communities. The federal Conservatives like the idea of tradable rights - they want to give away tradable pollution rights!

But NOSCP probably has a better way. Hand tenure over to communities. Let the communities sell harvest rights if they want to. Let the communities work out how to maximize the jobs in their regions. Let them deal with the relationship between tourism and timber harvests.

The NOSCP has a conference planned for March to develop a new vision for the northern forest. We sure need one.

Dave Robinson is an economist with the Institute for Northern Ontario Research at Laurentian University.

drobinson@laurentian.ca

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