Residents of Red Rock, Ont., are facing an uncertain future with the possible closure of the town's job action centre, tempered by "cautious optimism" over the reopening of its largest employer, the local mill.

The job centre continues to help about 165 workers laid off when the town's linerboard mill, owned by Norampac, closed in 2006 and threw nearly 400 people out of work. The town, on the north shore of Lake Superior about 100 kilometres east of Thunder Bay, has a population of about 1,000.

The job centre is one of a group of three in the area providing services to workers laid off from wood and paper mills within a 100-m radius of Thunder Bay, where other two centres are in located.

Gary Bragnalo, co-chair of the group of job centres, said the Ministry of Training, Colleges and Universities recently told the group that while funding would continue for at least another year, there would be less money than last year.

While Bragnalo declined to say how much money had been cut, he said it should become clearer in the next couple weeks exactly how it would affect the three centres.

"The government has always said it's [the funding] going to come to an end some day," said Bragnalo. "But they caught us by surprise. You know it's going to happen and then, bang, it happens."

Services in demand

Earlier in the week, Red Rock job centre co-ordinator Shelley Boudreau and colleagues appealed to town council to help them in their efforts to keep the centre open.

Its services — helping laid off workers land job interviews — are still very much in demand, they say.

The town's employment prospects were grim after the mill closed in 2006 due to high electricity bills, a soaring Canadian dollar and slumping U.S. demand. The situation worsened soon after when a fire destroyed the mill in nearby Nipigon, the region's other main employer.

Yet the town is not without hope.

'It's not as bleak as it was eight or nine months ago.'—Beth Wills, GM, Red Rock mill

Illinois-based North American Logistic Services Inc. bought the shuttered linerboard mill in September 2007 and has plans to start a plywood mill producing flooring material.

The mill was originally scheduled to reopen in late 2008, but company president Robert Van Patten says he must wait until Ontario approves his application to build a biofuel cogeneration plant that would make the facility economically viable.

Van Patten wants to build the plant with the help of the province's recently announced Green Energy Act feed-in tariff program. The program pays a premium for energy produced from renewable resources such as solar, wind and biomass.

Government approval would allow North American Logistic Services Inc. to convert into bioenergy wood waste from the mill and "unharvestable wood" from area forests. The bioenergy plant could then sell excess energy not used by the mill to the Ontario power grid, helping to offset the cost of doing business.

"We're in the process of meeting with a potential equity partner that would assume control of the project — develop and operate the co-generation plant," said Van Patten.

He said he is aiming to have a proposal ready for the government's feed-in tariff program when it begins accepting applications on Nov. 30.

Construction hopefully in spring

If approved, Van Patten said, construction of the co-generation plant could start in the spring. It could be running within 12 to 14 months, employing about 40 people on-site, with an additional 200 harvesting wood in the region as fuel stock, he said.

He estimated the mill could open about three months later, employing roughly 100 people.

Beth Wills, general manager of the Red Rock mill, said she is "cautiously optimistic that we can do something.

"Like everybody else in the industry, it's tough. It's getting better though. It's not as bleak as it was eight or nine months ago," she said.