• Douglas W. Judson

Council to hear deputation alleging forest license non-compliance

On Monday, June 28, 2021 David Kircher, a member of the public, will be making a deputation to Council outlining his concerns about events that have unfolded surrounding the province’s oversight and management of the licenses for harvesting wood from the Fort Frances-area forest region. Here’s my take on the information that Mr. Kircher will review.

As many citizens will know from Council’s past advocacy in the “Our Forest, Our Future” campaign, the management of Ontario’s forests are governed by the Crown Forest Sustainability Act (CFSA).

Under section 26(1) of the CFSA, the Minister of Natural Resources and Forestry previously issued sustainable forest licenses (or SFLs), which were granted for forest regions to the owner of a processing facility. That was the case when Resolute Forest Products held the SFL for the Crossroute Forest. The license that was explicitly issued was tied to Resolute’s mill in Fort Frances.

The CFSA now provides for the creation of enhanced sustainable forest licenses (or ESFLs). These licenses are granted to corporations which are created for the purpose of forest management, such as the Boundary Waters Forest Management Corporation (BWFMC), which is responsible for the now-merged Crossroute and Sapawe forest regions. Local communities in our region are represented in the structure of this corporation.

Under the licensing framework, section 26(3) of the CFSA requires the Minister to conduct a review every 5 years to ensure that the licensee has complied with the terms and conditions of the license. Section 26(4) states that in order for the license to be extended, the audit must satisfy the Minister that the licensee has complied with the license.

Section 59(1) also sets out the circumstances in which the Minister may suspend or cancel a forest license. This list of circumstances includes where the licensee fails to comply with the license and where the suspension or cancellation is authorized by regulations. The regulation in question is O. Reg. 167/95. Section 11[4] of this regulation states that the license may be cancelled where the license for a region is being transitioned from an SFL to an ESFL, provided the holder of the cancelled license is offered an opportunity to participate. That is the case in this situation, as Resolute participates in the BWFMC.

Renewals of SFLs (and now ESFLs) are authorized by the provincial Cabinet's Orders in Council (OICs), and this is where things get interesting. OIC No. 2326/2017 was made on December 12, 2017 to renew Resolute’s license for the Crossroute SFL to March 31, 2032 on the basis of the 5-year audit reports for the periods of April 1, 2002 to March 31, 2007 and April 1, 2007 to March 31, 2012. These reports are listed in the recitals of the OIC.

But what about the report for April 1, 2012 to March 31, 2017?

That report was not cited in the OIC that was adopted by Cabinet, suggesting it was not considered. If the 2012-2017 report had been considered, the Minister would not have been able “to ensure that the licensee has complied with the terms and conditions of the license” (per section 26(3) of the CFSA), because the license required that “forest resources harvested pursuant to this license are to provide a supply of forest resources to the existing forest resource processing facility of [Resolute] located at Fort Frances[.]” The 2012-2017 report would, presumably, have indicated that Resolute was unable to meet this term of its license because Resolute permanently closed the Fort Frances mill in 2014. They were non-compliant at the time of this license extension.

The 2012-2017 audit report does exist, and is dated October 2017, which means it was available in December 2017. It also explicitly refers to the closure of the Fort Frances mill. According to Mr. Kircher, it was never published, other than in the Legislature’s archives. The non-compliance evident in this report should have raised flags about the extension of Resolute’s SFL. So, who made the decision not to bring it to Cabinet's attention?

Mr. Kircher’s deputation calls for the municipality to seek an injunction from a court to prevent any further demolition activities on the mill site. At this stage, I am not convinced that there is any useful relief which can be sought by the municipality in court, perhaps other than a judicial declaration that an improper process was followed by the Ministry. I also do not see any ability for a court to make orders impacting privately-owned real estate and buildings of the mill property over what is now a historical licensing question. I note that section 34(1) of the CFSA also confers upon the Minister a broad power to amend a forest license, which would suggest that the Minister could have unilaterally changed the license at any time to bring the licensee into compliance. (The Minister declined to use this section to support Fort Frances in 2019.)

This isn’t to say that there have not been several injustices against the people of Fort Frances and the Rainy River District. As I have written before, Resolute’s naked attacks against the economic interests of Fort Frances and its efforts to assert control over a public forest have been nothing short of diabolical.

Those who have followed this saga since 2019 will recall that Resolute refused to negotiate with a buyer for its closed mill unless they signed an NDA preventing them from speaking to the province. Later, Resolute sold the property for scrap and put restrictive covenants on title which prevented a new owner from seeking access to a wood supply. We also learned that Resolute successfully lobbied the province – after closing its mill – to forgive a $23 million loan for the construction of its biomass boiler in 2007. Resolute has faced no evident accountability from the current government for any of these abuses.

For Fort Frances, the reality is that there may simply be no useful legal solution available to us. Our remedy must be political, and we must work within the ESFL structure to bring new opportunities to our region. Fortunately, that work is underway.

I look forward to Mr. Kircher’s presentation. I will also continue to seek answers from Ministry officials on this sequence of events. Our community deserves this accountability.

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