The Town of Fort Frances is calling on the province to revoke Resolute Forest Product's Sustainable Forest License for the Crossroute Forest after discovering a document that prevents the local mill's restart.
“With multiple serious parties having expressed interest in reopening this mill and creating jobs for our community, we demand that the province consider all options at its disposal to support that outcome,” said Mayor June Caul at a press conference held in Council Chambers yesterday.
Despite appearing interested in offers from companies looking to restart the facility, the mill's new owner—Riversedge Developments—signed a restrictive covenant agreement that prevents the mill from producing any type of paper product.
“After years of representing that it was seeking a buyer for the Fort Frances mill, we are very disappointed that Resolute would now use the sale of this mill to try to debilitate this asset and hurt a community that has given so much to its bottom line,” Mayor Caul remarked.
“What these restrictive covenants reveal is that neither Resolute nor Riversedge had any intention of allowing this mill to operate-and we know there is interest in doing so.”
The restrictive covenants also prohibit a new owner of the property from engaging the province to request access to wood supply.
Town council was not aware of the restrictive covenant agreement until last week, and was misled by Riversedge to believe the transition of the mill to an operating pulp entity was possible.
“Riversedge even met with a tissue manufacturer and told us no restrictions were placed on the sale that would prohibit their ability to purchase," Mayor Caul recalled. "Today, we understand that that was not true.”
She said local MPP minister Rickford is equally disappointed with the revelations as he too was led to believe the mill's restart was possible.
Although Rickford said in a statement that “as the former owner of the pulp mill, decisions regarding the sale of the facility are Resolute's to make,” he added that he will continue to work alongside the Fort Frances community to ensure that the mill property benefits the local economy.
Mayor Caul said Resolute's actions directly contradict the provinces vision of creating a community forest through the development of an enhanced sustainable forest license.
“Frankly, it appears Resolute thinks they own our forests. They are wrong," she stressed. "The forests of our districts belong to the people of Ontario . . . not a Quebec-based multinational corporation.”
Mayor Caul says the arrogance in the creation of these covenants shows how little respect Resolute has for the government and people of Ontario.
“This is corporate conduct that should be condemned and penalized by the highest levels of government,” she charged.
“It's even more alarming given the $23 million taxpayers shelled out in corporate welfare in the form of a grant that was forgiven even after they had closed the Fort Frances mill.”
What's even more concerning is after they kept the money, Resolute prohibited the future operation of the facility, while designating key pieces of equipment for scrap.
Mayor Caul said the town is anxious about the mortgage of $3.5 million that has been registered on title from the scrap metal company, Combined Metal Industries, on the mill property.
“We've been provided no information whatsoever about this relationship at all,” economic development officer Tannis Drysdale noted.
She said there appears to be a pattern of Riversedge taking out liens on properties for redevelopment in the past.
“The pattern seems to be: set up a new numbered company, (then) make some suggestions of activities that you're going to do as part of your revitalization . . . and then typically . . . those things don't so much work out,” Drysdale remarked.
She said properties in northern Ontario communities—Iroquois Falls and Red Rock—had similar liens taken out on them and haven't seen much success in terms of redevelopment.
The numbered company which recently purchased the mill for one dollar, 2670568 Ontario Limited, is a subsidiary of Riversedge. The numbered company was first created in December after Repap Resources expressed interest in restarting the facility.
Resolute's efforts to have the mill redeveloped instead of sold to an operator has always been about maintaining their monopoly over wood supply, according to Mayor Caul.
“It would appear to us that Resolute intends to destroy the mill, sink the public investment, and remove the economic engine of our district,” she charged.
Meanwhile, Coun. Douglas Judson told the Times he believes Resolute's actions are a concerted effort to use corporate tools to exert control over the publicly-owned forest.
“We saw that back in February when we tabled a resolution at this council setting out a number of facts about the behaviour of the corporate parties [Resolute],” he recalled.
“We were slapped down, slapped strategic litigation against public participation with a libel notice that never turned into anything.”
“A few months later Repap began engaging with Resolute, they were encountered with a non-disclosure agreement that would prevent them from communicating with the province,” Coun. Judson added.
“We all know you can't buy a paper mill if you can't negotiate for access to wood, and now we're faced with restrictive covenants that essentially render the asset not usable for its historic purpose.”
Riversedge is offering public tours of the facility but Mayor Caul says council will wait until they have an engineer who is well-educated on assessing the state of the mill before re-entering it.
“It's easy to take a person through the mill on a tour, but are you taking them on a tour to actually prove from what we believe to be a viable asset still? Or is it somebody taking people on a tour to try to convince the public that the mill is no longer operational,” she quipped.
“I feel [it's] the latter.”
The town is in discussion with legal council and exploring its options to protect the shuttered mill and local economy.