Thank you.
Good afternoon, ladies and gentlemen.
The forestry industry has been active in the Red Lake area since the late 1920s, when gold was found in Red Lake and timber was required for the gold mining industry. Because there were no roads into there, they developed sawmills to build houses and mines and so on. In later times, the Red Lake area has been one of the primary sources of fibre for the pulp and paper mills in Kenora and Dryden and a sawmill in Ear Falls.
Like so many other towns, we have suffered, based on our population, large job losses. In Red Lake, out of a population of 4,500, we have lost 120 jobs in the forest business, which is almost every one of them. Our lone sawmill has been decommissioned for quite some time now.
In the last two years there has been considerable interest in constructing a value-added wood processing facility in Red Lake. This is a case where we're trying to leverage our geographic location, being at the very base of arguably the largest boreal forest left in North America. Negotiations and discussions have been held with the area's first nations, established communities, and with foreign forestry interests, mostly from Finland. This is now known as the Two Feathers project.
Throughout its history, Red Lake's economic base has been primarily driven by gold mining, which we all know is subject to world commodity pricing. Red Lake has experienced many boom and bust cycles from 1926 to date, when we are enjoying a boom gold cycle. To truly stabilize its economy, Red Lake needs to focus on industrial and commercial diversification, reducing its reliance on mining.
It should also be known that we enjoy a seasonal tourist component in our economy, but that too has been compromised by several factors. As was mentioned by my friend here, the American economy severely impacts Red Lake's tourism. To that end, in the last two years we've had trade missions go to Germany to attract a new type of tourist, and it has met with some success immediately.
Let me get back to the Two Feathers project. It is a value-added production facility that will contribute significantly to regional industrial and commercial diversification and the general well-being of the area's economy. This is leading-edge technology, and it would be the first facility of its type in North America.
The Two Feathers project has been the work of many partners: the Wabigoon Lake Ojibway Nation, Eagle Lake First Nation, Pikangikum First Nation, the City of Dryden, the Municipality of Red Lake, Wood Tech Group from Finland, and many government agencies. There is the possibility for further inclusion of other partners.
The planned business activities will benefit each of these partners. The project will benefit the entire northwestern Ontario region by establishing markets not reliant on the volatile U.S. commodity market. Integral components of the Two Feathers forest products business plan are foreign direct investment and sales to establish foreign markets, namely Europe, Japan, and Scandinavia. The manufacturing plant will produce value-added wood products that do not fit into the traditional wood commodities products markets.
A very ambitious HRSDC-funded trading initiative is in the planning stages and will train over 100 Pikangikum youth in its first year to ready them for jobs at the Two Feathers operations. A total of over 500 Pikangikum youth are slated to be trained by the program over seven years. With a 90% unemployment rate, Pikangikums consider this a very key component in their economic recovery plan. This training will occur at Pikangikum First Nation, in the municipality of Red Lake, and in the city of Dryden, resulting in positive impacts in those communities. There will be many other training requirements as this project unfolds, and to that end, the municipality of Red Lake is in discussion with Confederation College and Northern College of Applied Arts and Technology to provide a bricks and mortar site for training.
This type of discussion has now included the medical and service industry training requirements. As a result, we're seeing immediate benefit as a result of the Two Feathers project. We expect 500 direct and indirect jobs to be generated by the Two Feathers project. This is a big number for us.
Throughout Red Lake's history, projects of this magnitude are extremely rare. We must take advantage of this opportunity. This project is critical to job creation, with positive regional economic recovery ramifications. Red Lake will be well positioned to attract future businesses that will support and serve the Two Feathers forest products plan. There will also be opportunity for social, cultural, medical, and educational employment.
To begin the process, the Municipality of Red Lake, Two Feathers Corporation, and Goldcorp, a local mining company, forged a partnership for the procurement of 142 hectares of land necessary for this project. This was groundbreaking in itself, as throughout history it was unheard of for mining companies to divest property, particularly in Red Lake. They have been very protective of all mining lands due to their mineral interest properties, and for that we are thankful to Goldcorp.
The economic benefits resulting from this project are significant. Without going through the numbers, one can only imagine the impact of a project of this size. The project's total investment in the region will be approximately $160 million, including the biomass cogeneration site. This is nearly the equivalent of constructing a new gold mine. This does not include any investment associated with the adjacent 40-hectare industrial park. The Two Feathers project industrial park will generate considerable tax revenue for the municipality. This is a very important component of the municipality's involvement in this program. It is imperative that the municipality increase its assessment base now, because we simply cannot afford to keep raising local taxes.
I'll explain how we've become gold poor. Red Lake, as most of you know, is arguably the hotbed of gold mining in North America right now. The more gold is found, the bigger the mines become, and the bigger the mines become, the more their operations go underground. That, according to the Ontario Mining Act, excuses them from paying local taxes. These are mega-mines. They move their garages, fire stations, shops, lunch rooms, and engineering offices underground and pay no local taxes on them. So the more gold we find, the less tax we generate. It's not a good combination, especially with gold right now at about $1,000 an ounce.
Canadian and international businesses or industries will have considerable opportunity to invest in startup businesses, relocate businesses to or expand businesses in Red Lake. This leading-edge technology located in Red Lake may be a template for similar projects elsewhere. We envision Red Lake becoming the centre of excellence in value-added wood projects with this modern technology. This is an opportunity to utilize the pillars of sustainability that result in the best use and highest value from our natural resources. It is our desire to position ourselves so that all potential investors view us in a positive and favourable manner.
This is where the story changes a bit. What do we need to make this happen? The Government of Canada, through departments such as INAC, Industry Canada, and FedNor, are invited to participate in this joint venture. The participation can come in various forms, such as capital investment, commitment, and coordination efforts to keep the project on track. The Municipality of Red Lake will require assistance to upgrade infrastructure and service delivery to the project.
The project will require a well-trained, skilled, adaptable workforce that can stay ahead of global requirements. The project will require additional capital as we include new technologies to stay ahead. The project will include a biomass component with all of its benefits, including reduced reliance on hydro and the burning of fossil fuels. The project will need new marketing strategies that include offshore markets. This is a very market-driven project and needs immediate site development in order to begin construction immediately. Yes, we ask you to help and be a partner with us.
The Municipality of Red Lake is proud to be a partner in this project. We feel this is an opportunity for the federal, provincial, and municipal governments, first nations, private industry, and foreign investment to help get Canadian forestry back into the mainstream. We do not want to miss this opportunity that may create further opportunities down the road. We ask that you be the partner with us in this exciting endeavour that is a first for Canada.
In closing, on behalf of all the partners and the residents of Red Lake, I'd like to thank you for this very unique opportunity.