Thunder Bay

New report details forest sector losses

A new report shows just how far Ontario's forest industry fell when it landed on hard times but natural resources minister Michael Gravelle says many of the jobs lost in the downturn should return this year.

Forest industry shed 60,000 workers in recent years, but analyst says expect an 'upswing'

A new report shows just how far Ontario's forest industry fell when it landed on hard times, but natural resources minister Michael Gravelle says many of the jobs lost in the downturn should return this year.

In a report called the State of the Forests, the Ministry of Natural Resources said the industry was hit the hardest in a three-year period starting in 2005.

About 200,000 people were employed in the sector at that time.

In 2006, 424 communities were considered forest dependent, and took up 7.1 per cent of Ontario's jobs.

But by 2008, roughly 60,000 workers had lost their jobs.

Investment in mills and machines plummeted and the amount of wood harvested dropped by almost half.

The report blamed a high dollar, high energy costs, the softwood lumber agreement, as well as a slump in the housing market and a low demand for pulp and newsprint.

Gravelle called the numbers depressing — but said 2013 should be a better year.

"The re-opening of a number of sawmills ... is something we actually do very much expect," he said.

"[We’ve had] some good discussions with a number of people about those opportunities."

Terrace Bay in norwestern Ontario will see an expexted influx of workers as the community's mill restarts this year. (Supplied)

Gravelle noted the re-opening of the Terrace Bay mill shows forestry has a future.

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Analyst and BMO economist Alex Koustas said he agrees.

"It has been a difficult few years, but [it] definitely looks like things are picking up," he said.

"Prices are firming up and demand should be firming up as well."

Koustas added home construction in the US and demand from overseas will create more markets for wood.

"It does appear as if things are starting to turn around," he said. "Now, a return to those levels might be a bit too optimistic, but, it definitely looks like the industry has started to stabilize and that it's on the upswing, as opposed to things heading downwards."