Evidence of meeting #22 for Natural Resources in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cars.
A recording is available from Parliament.
Vice-President, Trade and Competitiveness, Forest Products Association of Canada
That's correct. Companies which produce grains have the same problem. A study was made public last week, and it estimated that these companies pay $175 million more than they should because of the lack of competition.
Conservative
The Chair Conservative Leon Benoit
Thank you.
Merci, Madame DeBellefeuille.
We'll go now to Mr. Comuzzi, for up to five minutes. Joe, go ahead.
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
Thank you.
I appreciate the gentlemen from Thunder Bay being present with us, as well as you, Marta.
I'm just going to do some historical background, if Hartley or whoever wants to answer this.
The Buchanan group of companies embraces all of the nine or ten sawmills, plus Terrace Bay, and a variety of other companies, but you're all under one common ownership. Yes or no?
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
I have to get quick answers, because we only have five minutes.
You wanted at one time to go for the quota system—although it was difficult to get you to understand that. Then when the quota system was over, you opted for free trade. You wanted to go for free trade, even though we had an opportunity to buy into the quota system for a few more years. Is that correct? You—your companies—wanted free trade, and we wanted to get rid of the quota system. The answer is yes?
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
During that process of trying to arrive at free trade, which took three and a half to four years—a very, very expensive litigious process, and very expensive to all the companies in Canada—you eventually decided that you needed to have some kind of government support. You supported the previous government very much, which I appreciated, making $1.4 billion available, with $800 million for the softwood lumber agreement, which you could tap into to keep your companies going. You supported that, but unfortunately the previous government didn't have the opportunity to get that through before the election.
Is that correct?
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
So we find ourselves today in a situation where we are facing a problem that is not uncommon, nor one that we haven't faced in this industry in northern Ontario from time immemorial.
Am I correct? Transportation has always been a major concern.
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
It's magnified today because of the other problems.
But you also know full well that before you took over the Terrace Bay operation, to make kraft, that its prior owner, Neenah Paper, and Kimberly-Clark before that, couldn't come to some agreement with Canadian Pacific Railway, and that in the last several years they had to use trucks to get their product from Terrace Bay into Thunder Bay—and then it was trans-shipped to other centres. Is that correct?
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
Yes. I only bring that out to compound the problem we're seeing. We're trying to find the solution to this problem. But you never, other than with your own barges and so on, utilize a full facility that we have available to us through marine transportation in northern Ontario.
I'm getting to the crux of what I want to say, which is that we haven't fully realized the potential for marine transportation. You can't expect two independent corporations, Canadian Pacific Railway, which is not owned by the government, and Canadian National Railway and the Buchanan company.... You can't expect the government to impose rules and restrictions on the railways. It has to come through compromise between you folks.
President, Buchanan Pulp Sales
Okay, sure. I'll clarify.
How do we address this situation? Every year we run a multitude of barges through the entire shipping season, as long as there's no ice, right from the day.... Our barges are getting ready right now because of all these rail issues. We had nine barges last year. You're talking about approximately 600 cars' worth that we are actually putting onto barges, just to take across the lake to put into a warehouse so we could actually take away our dependence on the rail lines.
So in terms of exploring marine, as of right now, as we sit here, starting three weeks ago, we have pulp shipping, in a multitude of ways, up to the Three Rivers area so we can get a ship to pick it up. That's a significantly incurred cost to us. We bought a warehouse here in Thunder Bay on the lakeshore, which is completely full right now. We actually are bringing in not only our big barges but all our mini-barges. We're looking at building a dock in Terrace Bay--
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
--to cut you off, but you are looking at the potential to increase your shipping capacity through marine transportation, yes or no.
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
Yes. Now that's where we can play a role as a government.
You realize, of course, that we have a port authority in Thunder Bay. What goes around comes around, fellas. You haven't been too responsive to this port authority and in being entirely fair in your dealings. You know, when you had that ship come in from Europe, you didn't use the longshoremen. They were very upset. You know, you're having some problems you shouldn't have. Can't we get these issues resolved and really utilize the marine transportation that we have available to us?
President, Buchanan Pulp Sales
We are currently working with the longshoremen. We're actually putting together a deal with them right now. I mean, to say we haven't wanted to use them in the past.... We have found it more competitive to send pulp from Terrace Bay up to Three Rivers, where they had a 50% rate reduction on handling pulp and items like that, versus the Port of Thunder Bay. We're talking throughput rates, stevedoring rates, wharfage rates, and everything that is included. It was more competitive for us to ship it all the way to Three Rivers and have a boat pick it up there than to do it in our port here.
We're currently in negotiations with the stevedoring companies in Thunder Bay as well as with the Thunder Bay Port Authority to see if they can get us close to those rates. We'll actually supply assets, whether that be forklifts or anything like that, to help in that process. We'll put our own employees there to do some unitizing so we can actually look at having ships bring backhauls into Thunder Bay as well as export our pulp and lumber out of the port.
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
The answer to the question is yes, you're going to utilize it and see if you can come along with some marine transportation that will be agreeable to you folks and to the port authority, and you can come together and bring the cost of your transportation down. Is that correct? You're working on that?
Conservative
Joe Comuzzi Conservative Thunder Bay—Superior North, ON
You see potential there. I want to work with you on that. I think that's the future.
