The Red Rock mill was closed by Cascades Inc. in November 2006. It was purchased by North American Logistics in September 2007, but no immediate plan was announced in terms of when the plant might reopen. (Ian Johnson/CBC)

Prime Minister Stephen Harper announced Jan. 10 that the federal government would provide provinces with $1 billion to help one-industry towns bounce back from volatile economic markets.

The forestry industry has suffered several hard blows in recent years: an estimated 22,000 jobs lost at mills across the country according to the Canadian Forest Service. The high Canadian dollar, the lagging U.S. economy and the prevalence of the destructive pine beetle are among the culprits cited.

The new community development trust fund would see provinces get at least $10 million each year over three years and $3 million in the Territories. The money will be used to fund worker training and skill development programs for communities in transition, Harper said.

CBCNews.ca has been following the stories of three towns in the midst of industry transition: Red Rock, Ont., Stephenville, N.L., and Quesnel, B.C., which are communities struggling to stay afloat after saw mills and pulp and paper mills have all but disappeared in their communities.

Red Rock, Ont.

Snuggled between Paju Mountain and Lake Superior, Red Rock is stuck between a rock and hard place. The town of 1,063 is still recovering from the paper mill closure that put 450 employees out work in November 2006.

Since then, the community has committed itself to rebuilding and generating new opportunities, but a lack of funding may be holding them back.

The trust fund may deliver a substantial amount of money to Red Rock — and if it does, Red Rock's mayor is ready and waiting.

"If training is made available for new jobs, then there are individuals here that would take advantage of that," said Sam Sobush, mayor of Red Rock and a former mill worker.

But the idea of waiting around for Parliament to pass a federal budget that officially allocates the money leaves Sobush skeptical. Some families that can't wait have already left town in order to find work elsewhere.

"Something is better than nothing," the mayor added, "but unfortunately the feds didn't come forward soon enough."

Those who have stayed, vow to bring new industries to Red Rock. This picturesque community could very well see the tourism sector grow. A waterfront park and marina were built in 1992 to attract Canadian and American boaters travelling along Lake Superior.

"The only thing we don't have is a visitor's building for tourist information, locker rooms and food services," said Doug Mowat, former mayor of Red Rock and a former plant worker. Money is needed to bring water or sewage services to the marina.

Mowat also boasts of the walking trail that circles Paju Mountain and connects with neighbouring Nipigon. The trail's hilltop view of the lake could potentially attract passing tourists, explained Mowat. But the town needs money to finish it, he adds, because "the guys who were building the trail also worked at the mill, and now they're all gone."

Stephenville, N.L.

Many residents of Stephenville, N.L., are confident that their community can bounce back from devastating job losses when Abitibi-Consolidated Inc. closed its pulp and paper mill in 2005. The mill has since been demolished. But the area's 6,600 residents have proven resilient, and with the prospect of funding from the federal government, they are more hopeful than before.

"Some people dwell on the mill being closed. But the value of homes hasn't gone down. I just don't see all the doom and gloom people are talking about," said resident Cathy Whalen, a local nurse whose husband is a former employee at the mill.

Whalen's husband, like so many others in Stephenville, now works in Fort McMurray where the oilsands refinery has created unprecedented job growth.

Truman Greenham, principal at Stephenville Middle School, suspects that new jobs in faraway Alberta are supporting Stephenville's local economy. He explained that many residents work three weeks in Alberta, then return home to spend one week with their families before returning west.

"The money is coming from over there, but it stays here," said Greenham.

Greenham believes that a surge in government funding could re-invigorate stalled projects, creating a local and self-sustaining economy. In late 2007, plans were announced to start an oil rig refurbishing plant and a facility to refine peat for biofuels.

"Hopefully new money will get these and other projects in motion," said Greenham.

The mayor's optimism is echoed by Whalen, "When you kill a community it comes back twice as strong."

Quesnel, B.C.

Quesnel, B.C., is a forestry town in crisis. The pine beetle may completely wipe out the surrounding pine forests and result in massive jobs losses for the town's primary industry.

"This is the largest national forest disaster in Canadian history, and we need reinvestment," said Annie Gallent, a reporter with the Quesnel Cariboo Observer.

Gallent said that Harper's multimillion-dollar fund to help communities like Quesnel is a watered-down version of what they were hoping to see.

Quesnel is banking on the emerging timber salvage industry to help them build an economic future. Salvaging industries use wood chips and fibre dust from dead wood to make products such as medium density fibreboard (MDF), commonly used in furniture, cabinet making and some kinds of flooring.

Logging crews are working 24 hours a day, seven days a week to save the forest from further decay due to the beetle infestation.

"If we are lucky, there will be only eight more years of harvest before the timber is past usability," explained Gallent.

The mayor of Quesnel, Nate Bello, says the city has a strategy to develop new agricultural, tourism, manufacturing and biofuel refinery industries. He expects the city will need upwards of $200 million to see the new industry plans through to completion.

"I hope this announcement means there is money coming our way," said Bello. "We’ve helped Canada by putting millions into the economy and now it's time for Canada to re-invest in us."

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