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Council's mill resolution being forwarded on

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Mayor and council unanimously passed an amended version of a resolution at its regular meeting Monday night and now has issued it to Resolute Forest Products, Premier Doug Ford, Kenora-Rainy River MPP Greg Rickford, provincial Opposition leaders and critics of natural resources, and all Rainy River District municipal and First Nations councils and representative bodies.

Coun. Douglas Judson, who drafted the first version of the resolution, told the Times yesterday that a major reason it wasn't voted on last week at the special public meeting was that the situation had evolved since the original tabling on Feb. 11 and some of the text references needed updates (such as certain dates).

“We had not had an opportunity to meet as a group to update it before the Feb. 19 meeting," he noted. "And as you will see in the version we passed, this document benefitted from the public input we received at that meeting.”

The resolution states the following:

The town was founded in 1903 and has been the site of a paper mill for over a century.

The mill, which is currently owned by Resolute Forest Products, is an irreplaceable key economic asset of Fort Frances that has been the recipient of significant public investment over its operational life, including as recently as 2009.

The mill's future has been jeopardized by what appear to be dealings motivated by a desire to maintain control of the local wood supply or to hinder new entrants to the forest industry.

The wood fibre from the Crossroute Forest is a publicly-owned resource that has been designated to supply the mill first and foremost, and this priority is clearly reflected in the Sustainable Forest License (SFL) that was issued by the Ontario government to Resolute.

The Ontario Minister of Natural Resources has the authority to vary, amend, or overlay the SFL so that another licensee is provided with access to wood fibre in the Crossroute, but the minister has not yet publicly committed a proximate supply of wood to a buyer who wishes to acquire and operationalize the mill.

Local forest resources should be sustainably managed to primarily support and create jobs and economic prosperity for their surrounding communities—a commitment reflected in the SFL policy regime and the successor Enhanced Sustainable Forest License (eSFL) regime;

There is enough wood supply in the Crossroute and surrounding forests to support multiple, operational facilities in the region—especially considering that up to a dozen mills in Northwestern Ontario have been closed over the past several years.

Resolute idled and permanently closed the mill in 2013 but continued to harvest wood from the Cross route for use at its other facilities, hundreds of kilometres from Fort Frances, including to Resolute's Thunder Bay mill—a clear inconsistency with the SFL.

Fort Frances understands that the reason previous attempts to purchase the mill from Resolute and operate it have failed has been due to difficulties securing access to a sustainable, equitable, and cost-effective supply of wood fibre.

The previous provincial government—including the then-Minister who was MPP for a riding benefiting from the redirected Crossroute wood fibre—declined to assist Fort Frances and its neighbouring communities to ensure that the Crossroute wood rights were prioritized for creating local jobs in the Fort Frances area.

A new potential buyer emerged in December 2018 with an interest in purchasing and operating the mill, with the potential to create over 700 jobs for the surrounding communities;

The buyer has engaged in discussions with Fort Frances and Rainy River District municipal and First Nations community leaders on its plans for the mill, including its intent to enter into arrangements which economically empower area First Nations and facilitates their participation in the buyer's business enterprise and related support services.

Fort Frances is concerned by any steps Resolute may take that create obstacles which prevent the buyer from engaging in substantive negotiations to purchase the mill or to secure access to wood in the Crossroute, particularly in light of the clear provisions in the SFL which favour an operating facility in Fort Frances.

Communicating with government officials is necessary to secure a wood supply and assess a number of regulatory matters related to the mill and its return to operation and no potential buyer of the mill should be prevented from doing so.

Resolute has recently informed Fort Frances that it now intends to open the future of the mill to a competitive bidding process, which closes in less than one month—on March 15, 2019.

Resolute has announced a March 15, 2019 deadline for interested parties to submit bids on the assets of the mill, but has not widely advertised this opportunity or indicated whether bids will be accepted for the mill as a whole, or simply its parts.

On Feb. 8, 2019, Resolute informed Fort Frances of its default intention to sell the mill to a “community redeveloper”—a company which would presumably dismantle the mill and Fort Frances' key economic asset.

Fort Frances believes that Resolute's bidding process is designed to allow Resolute to reach an outcome which will result in the demolition of the mill, followed by a permanent reallocation of rights to the Crossroute wood fibre to Resolute by default.

Fort Frances believes that the “community redeveloper” in question is the same firm which has purchased other shuttered industrial facilities in the province, and actually engages in demolition activities on the sites it acquires.

Fort Frances has concerns about this community redeveloper's record of successfully and fully rehabilitating and remediating former industrial properties.

Fort Frances is firmly committed to the principle that its local forests are linked to its economic future, and moreover:

  • Has lost confidence in Resolute to administer a fair process for the sale of the mill or to broker access to wood fibre in the Crossroute to a successful bidder, without the intervention of the provincial government or other regulatory bodies;
  • Is of the view that Resolute's strategy, lobbying, and engagement with the Buyer have not been aligned with the interests of Fort Frances or the public policy underlying the Crossroute SFL;
  • Believes that Resolute's representations of any intent to sell the mill to a new operator have been insincere;
  • Believes that Resolute wishes to see the mill demolished before Fort Frances and other impacted communities have a voice in the imminent eSFL management regime for the Crossroute; and
  • Believes that Resolute's actions and behaviour in respect of the SFL have been anti-competitive and are contrary to the intent of the SFL.

The resolution states the town should demand that Resolute:

  • allow all bidders on the mill the ability to engage in dialogue with government prior to submitting their bid so that they can reasonably prepare for a successful acquisition of the mill;
  • allow sufficient time for bids on the mill to be prepared and submitted;
  • inform the Town of Fort Frances, in confidence, of the identity of bidders so the town may engage in discussions with them and provide information that is responsive to the bidders' plans for the mill properties; and
  • comply with the terms of the SFL [Sustainable Forest Licence] and engage in a process to provide access to wood fibre in the Crossroute Forest, reflecting such intention in any bid or tender package issued in respect of the sale of the mill.

The resolution goes on to state the Town of Fort Frances calls on the premier of Ontario and the minister of natural resources and forestry to use all measures within their authority:

  • to ensure the mill is open for business;
  • to provide access to fibre in the Crossroute Forest to potential operators of the mill, in keeping with the text of the SFL; and
  • to support outcomes for the mill which create jobs and prosperity in Fort Frances and surrounding municipalities and First Nations.
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