Since its inception in the late 1920’s the Community of Hearst has grown around the forest industry. All other elements of the local economy, such as secondary industry, transportation, the retail and service trades, etc. are reliant on consumer dollars and business that are generated by the forest industry. Hearst has always faced the challenges of surviving the “boom and bust cycles” that is typical of a natural resource-based economy. This is no longer the case however as the global market situation changes. The Forest Industry in North America is perceived as a mature declining market that requires significant restructuring. Nordic Europe is also seen as mature and declining, but unlike North America restructuring has begun years ago. In addition, the Scandinavians are world leaders in technology development which eases the negative effects of a world economic downturn.
Since the 1960’s, Hearst has experienced the net loss of four (4) major mills. Two of the 3 remaining operations are now owned by larger North American consortiums, so local control is no longer a factor in their destiny. The three remaining wood manufacturers in the immediate Hearst area (Columbia Forest Products, Tembec Industries Inc. and Lecours Lumber) directly employed 765 people in 2006 and 171 in secondary industries and services, involving 43% of the local labour force overall. In 2006, Les Industries Tri-Cept (Hearst) Inc. permanently closed its planning mill with a loss of 40 jobs. In November 2007, Columbia Forest Products terminated their particle board plant and 83 more jobs were lost. In July 2003 Columbia Forest Products had 453 employees at their facility in Hearst, today they employ 198, a net loss of 56% of the work force. The lingering troubles of the forest industry have had a negative impact on an estimated 451 job opportunities on the plant floors, in wood operations and support industries during the past 2 years, through permanent job reductions, delayed harvesting or non-renewal of contracts. All indications are that this trend will continue through to 2011. A recent announcement by Tembec to schedule a 13 week shutdown of its saw mill in Hearst starting November 2009 supports this trend. The recent collapse of Buchanan Forest Products has affected many local workers who contracted equipment and labour to this company. Last winter, when harvesting activities are normally at their peak, Lecours Lumber and Tembec had combined lay-offs of 275 employees. Today, Forestry workers have not returned to work. Columbia Forest Products has recently removed its melamine laminating equipment from its plant, resulting in a further loss of 8 job positions. The remaining jobs at Columbia are far from secure, as the company is operating on a week to week basis, and is in need of a rapid economic turnaround. The forest industry is Hearst’s livelihood and the driving force behind our whole economy. As the forest sector suffers, its symptoms spread throughout the community. Countless families are affected, not because they work in the industry, but because they supply goods and services to the forestry sector and its employees. The effects of the forest sector downturn are evident from the closure of 5 businesses in the downtown core since July 2008, including the Downtown’s anchor “Northern Store”. Smaller retail outlets have since closed due to lack of patronage. Over 80 houses are now listed on the market and countless number of commercial, industrial spaces are listed as vacant and for sale.
Despite these challenges, the community is posed on the brink of a new economy and is actively pursuing prospects in bio-fuels, renewable energy, value-added wood products, wood pellets as alternate heating sources, a potential phosphate mine and numerous other avenues. The integration of economic networks/clusters that will contribute to closing the loop in the current life cycle of a resource based economy is also a catalyst to the future success of the above projects. Promising sectors such as biotechnologies and nanotechnologies also need to be developed further to become part of the restructuring process.
Despite these very promising sectors Northern Ontario communities need overcome important hurdles in order to facilitate economic development. Current government policies and governance mechanisms for access to land and forest resources often discourage new investment, including a lack of participation in decisions surrounding Crown land. Natural resources tenure models need to take in consideration communities as far as revenue sharing and management control. This will help communities become self sufficient and increase revenues from within the community and provide capital investment capacity for new ventures.
In the short term, stimulus projects are necessary to maintain and boost community confidence and to provide local employment to labourers and equipment operators until a new economy is developed and functional. Projects such as municipal infrastructure development, enhanced forest sylviculture and inventory, alternative crop development for food and biomass need to be actively pursued without delay. These projects will not only send back to work unemployed forestry workers, they will help prepare the ground for a new bio economy.
