The Red Rock mill was closed by Cascades Inc. in November 2006. It was purchased by North American Logistics in September 2007. (Ian Johnson/CBC)Mayor Gary Nelson pins his hopes for the survival of Red Rock, Ont., on one thing — a plywood mill that was originally scheduled to open seven months ago.

"It's the only thing we've got going for us," he said. "Something has to happen there."

A linerboard mill owned by Norampac employed most of the town until it was shut down in 2006. North American Logistic Services Inc. bought the mill in September 2007 with plans to start a plywood mill producing flooring material. But company president Robert van Patten says he can't reopen it until the Ontario government approves his application to build a biofuel cogeneration plant that would make the facility more economically viable.

Van Patten wants to build a facility under the province's feed-in tariff program that would allow him to convert wood waste from the mill into bioenergy. He could then sell the energy to the Ontario power grid to help offset the cost of doing business.

Ontario has had a feed-in tariff program for years that international experts have looked to as a model. The program encourages entrepreneurs such as van Patten by buying the renewable energy their businesses produce at higher-than-market prices.

The problem for Red Rock is that the Ontario government has suspended the current feed-in tariff program and added a modified version to the Liberal government's proposed green energy act.

The new act has passed two readings in the legislature, but isn't expected to get its third reading until June. And no one is sure how long it will take van Patten's application to be assessed if it becomes law.

Ontario Power Authority spokesman Jim Taylor said even though the program achieved its 10-year goals in its first year, there was room for improvement. The modified program packaged with the green energy act tweaks the prices the government pays for different types of energy and takes the size of the plant into account.

"If you're going to change the rules, you have to have a point at which the old rules don't apply," he said. "You can't just manufacture a program out of thin air."

The revamped program would also simplify and standardize the procedures that small energy generators have to follow, Taylor said. "The whole idea is to, in effect, simplify it so everyone is playing by exactly the same rules."

Running out of time

While the legislation works its way towards law, Red Rock residents desperate for jobs say they can't wait much longer.

Soon after the pulp and paper mill closed, the situation became even worse when a fire destroyed the mill in nearby Nipigon, the region's other main employer. People who had worked in mills all their lives were suddenly out of work, with no employment prospects in the area. Many had no high school education and no experience in any other industry.

If the Red Rock mill plan goes ahead, it would be the only flooring plant in North America. (Courtesy Mike Shusterman)When the recession added to the town's problems, Red Rock's ability to support basic infrastructure faltered.

The community centre, curling rink and hockey rink shut down. Declining enrolment meant teachers at the local public school had to teach three grades at a time this year. Taxes went up to make up for lost revenue from the pulp and paper mill, and the value of real estate went way, way down.

Van Patten said he's confident the government will approve his application. The mill would be the only flooring plant in North America and boost the economy by reducing Canada's reliance on exports, he said.

But he also said if he doesn't get certified, he can't afford to open the mill.

"I don't think I would be able to get it financed," he said, adding that energy sales would help make the plant economically viable.

"With housing off 50 per cent and people not spending money on anything, it would be virtually impossible to convince people that we could sell the output of this mill."

In the meantime, Red Rock's already desperate situation is getting worse.

'Most people, if they're lucky enough to get jobs, they're just seasonal.'— Shelley Boudreau, co-ordinator of Red Rock Job Action Centre

To make ends meet after losing the two mills, some Red Rock families who opted to keep living in the town had to make some tough decisions. Some residents took jobs in other communities, requiring them to commute many hours a day. Others sent one breadwinner to work in the Alberta oilfields for six weeks at a time, then return home for two.

But since the recession, workers are getting laid off from those jobs as well.

Lisa Cates said her husband Bart was working at a pulp mill two hours away, but he was laid off last February. Since then, the family has been getting by on her salary as the town's postmaster and her husband's employment insurance.

Shelley Boudreau, co-ordinator of the Red Rock Job Action Centre, says the number of visits to the agency have almost doubled in the past three months as people lose their out-of-town jobs.

"Most people, if they're lucky enough to get jobs, they're just seasonal," she said.

The town, nestled on the shores of a spectacular stretch of Lake Superior's North shore, has tried to boost its seasonal tourism industry with initiatives such as a summer music festival and a revitalized marina, but it hasn't proved easy.

"If we were on the main highway, it would help out a lot. We're not. So we're not getting the tourists," Nelson said.

"A lot of our workers are doing snow plowing in the winter and maybe a little bit of construction in the summer," adds Boudreau.

Cautious optimism

The new plywood mill wouldn't solve all of Red Rock's problems, but it would be a big help. Van Patten expects it would employ about 120 people and create between 200 and 250 logging jobs in the area.

A view from the Red Rock lookout. The town is located on a spectacular stretch of the North shore of Lake Superior. (Courtesy Ginger Randle)Bart Cates is looking for other work, but Lisa said he's hoping for a job at the plywood mill if it opens — he's been taking courses to upgrade his engineering qualifications, hoping it will improve his chance of getting hired.

Lisa Cates says the family wants to stay in the town and she remains cautiously optimistic about Red Rock's future: "I'm just unsure, very unsure.… But I'm hopeful."

Leslee Fredericks, Red Rock's community development officer, said an entrepreneurial training program has led to some other business startups. A few people who have taken the workshops have started consulting businesses, and one woman recently bought property she plans to turn into a takeout restaurant, she said.

There is another source of optimism for Red Rock — a few retirees and some young families have recently moved into town, attracted by the low housing prices.

Their children have enrolled in local schools, fuelling the hope the institutions will be able to stay open, Nelson said.

But Red Rock can't rely solely on the smattering of small business startups and its ability to attract tourists and new residents. It needs to offer a source of steady employment for the wider community, mayor Nelson said. The town needs something to replace the pulp and paper mill as its economic engine.

"Not every town can be a retirement centre," he said.