Quebec pumps $733M into flagging forestry sector

Quebec's plan to deal with its forestry crisis is being welcomed by labour leaders, despite Premier Jean Charest's warning that more layoffs may be imminent.

The $733-millionplan, unveiledin Trois-Rivires Friday morning, includes broad measures to assist unemployed workers, mill towns and companies struggling to adjust to what Charest has called the worst crisis in the forestry sector's history.

Quebec's biggest pulp and paper companies have shut down 35 sawmills permanently, and 80 more temporarily, since April 2005, eliminating 2,985 jobs and jeopardizing 5,759 more.

The assistance plan offers $300 million in new money for aid programs and recasts $433 million already promised in the last budget.

The plan extends over four years and includes:

• $55 million to help older employees, aged 55-59, bridge their retirement or retire early and provide retraining for younger workers.
• $45 million for regional communities to diversify their economies.
• $433 million for pulp and paper companies to rationalize and modernize operations and extend credit.
• $197 million for forest management in Quebec, including measures that will see the government take over certain infrastructure costs, such as road maintenance and firefighting.

The four-pronged approach will help all players focus their efforts in the short and long-term, Charest said at the announcement.

"We all have a responsibility to work together, to pass through this storm, and emerge stronger."

The final goal is to enable the sector to regain its footing in the forest products market, Charest added. But the market could get worse before it improves and that means there may be more layoffs in the future.

Charest said he is "completely convinced" that the possibility of more mill closures and layoffs is still present.

But no one can say how many, he told journalists.

"Why? Because it depends on the companies. I can't make decisions for the companies. But I can try to make sure they make the best decisions," Charest said.

Labour leaders satisfied

Henri Mass, the president of the Quebec Labour Federation, the province's largest labour federation, said he's satisfied with the province's package because it recognizes that many laid-off workers won't be able to find jobs in the sector once it emerges from the current slump.

Mass said he would like to see greater investment in technology, which he believes could solve productivity issues.

"In forestry, [technology] is uneven. Some of the mills are on the cutting edge, and some of them are in the Stone Age, with technology from the 1930s. We need to renew that," he said during a news conference in Montreal.

But he had harsh words for the federal government, which contributed about $18 million in total to the package, an amount he called "peanuts."

"The federal government has lost a chance to gain favour in the polls here. If [Ottawa] is not able to understand [the needs] of ordinary people when we are in a big crisis like that, I think they will pay a political price," Mass said.

The aid plan does not include any subsidies for wood fibre, the raw material most mills use to produce products such as paper. The province's forestry council had lobbied hard for some kind of government-supported reduction in fibre costs.

But Raymond Bachand, Quebec's minister of economic development, said that would send the wrong message to the international community.

"It's in our interest to respect the spirit and the letter of the agreements we have with the United States," Bachand said.

PQ concerned about the future

Parti Qubcois Leader Andr Boisclair said he welcomed the Liberal government's plan because it helps older workers, but isn't satisfied it will help the sector weather the crisis.

"It's only a start," Boisclair told Radio-Canada. "And what will hurt the most is that the government ignored one of the key recommendations of the Coulombe commission, which was diversification [for community economies]."

Boisclair added he wasn't impressed with the federal government's reaction to the crisis. "The federal contribution is ridiculous. Stephen Harper's government is offering peanuts, and they could be doing more."

In situations of crisis, Ottawa should consider exceptional measures and has the power to do so, he added. But the Conservative government's handling of the situation has proven the government's incompetence to Quebecers, Boisclair said.