Forest industry: New strategy promotes strength and sustainability for Canadian industry


OTTAWA -- The Government of Canada announced today a new strategy worth almost $1.5 billion designed to help Canada's forest industry remain strong and sustainable in the face of increasing challenges. The Forest Industry Competitiveness Strategy invests in the longer-term innovation and productivity needs of the forest industry to sustain its competitiveness. It also provides new funding over five years to address the current challenges facing workers, industry and communities.

Led by Natural Resources Canada, the Strategy is supported by Industry Canada, Human Resources and Skills Development Canada and regional development agencies, such as the Federal Economic Development Initiative for Northern Ontario (FedNor).

"Canada's forest sector is a major contributor to the Canadian economy and is one of our most essential natural resources," said the Honourable John McCallum, Minister of National Revenue and Minister of Natural Resources. "In launching this strategy to aid in the modernization and transformation of the forest industry, the Government of Canada is demonstrating its commitment to the industry and to those communities, particularly in rural Canada, that benefit from it, whether directly or indirectly."

"Through the Forest Industry Competitiveness Strategy, the Government of Canada is helping to ensure that Canadian companies benefit from breakthrough technologies," said the Honourable David L. Emerson, Minister of Industry. "These technologies have the potential to transform the forest industry's products and production processes, and to lessen its environmental footprint."

"The Forest Industry Competitiveness Strategy contains numerous measures to strengthen the forest industry and forest-dependent communities in northern Ontario," said the Honourable Andy Mitchell, Minister of Agriculture and Agri-Food and Minister of State (FedNor). "Today's announcement builds on the Government of Canada's investments, both through FedNor and initiatives such as the Softwood Industry and Community Economic Adjustment Initiative, to reinforce this pillar of the Canadian economy and provide peace of mind to communities affected by the softwood lumber dispute."

"We have many challenges to face together," said the Honourable Jacques Saada, Minister of Canada Economic Development Agency for the Regions of Quebec and Minister responsible for the Francophonie. "If we wish to succeed, we must rely on one essential element -- our ability to create a partnership among all stakeholders, governments, businesses, workers and communities."

The five-year initiative addresses a wide range of issues and opportunities currently facing the Canadian forest industry. This includes diversifying the economies of forest-dependent communities, enhancing skills of forestry workers, investigating new markets for wood products, developing innovative technologies and supporting the domestic industry in the face of the continuing softwood lumber dispute.

The strategy provides $581 million to support forest-dependent communities, market diversification and incentives for innovation in the forest industry, including incentives for bioenergy production. In addition, the Government of Canada's November 2005 Economic and Fiscal Update proposes to accelerate the capital cost allowance for forest bioenergy. This would mean the industry would realize up to $110 million in tax savings. The Strategy also sets aside funds to facilitate up to $800 million in loan insurance and provides $100 million for a repayable contribution program for firms affected by the unique circumstances of the softwood lumber dispute.

The Forest Industry Competitiveness Strategy also complements the programs and initiatives that the provinces have implemented to support the forest industry across Canada, including support for the pulp and paper industry and for rural communities that are dependent on the forest industry. Although it will be implemented across Canada, each region will have access to a mix of national and regional programs, working closely with regional agencies to ensure that the needs of the forest industry in all parts of Canada are supported through this initiative.

This initiative enhances the quality of life of Canadians by supporting our natural resources sectors, which are a vital part of Canada's economy and society. It also supports the Government of Canada's commitment to building on the strength of our country and our people. Funding for this initiative will be provided from the remaining planning surplus in the Economic and Fiscal Update of November 2005, with the exception of Renewable Power Production Incentive (RPPI) and the tax change for bioenergy, the costs of which were included in the Fall Update.

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