Quota cut threatens Thurso sawmill

June 29, 2015

By: Ottawa Citizen

A West Quebec community fears the loss of 300 jobs on July 31 if a sawmill that is a major employer can’t reach an agreement with the Quebec government.

Lauzon Distinctive Hardwood Flooring Inc. has told employees it will have to close its plant in Thurso, east of Gatineau, if it cannot negotiate a return to a higher wood quota.

The Quebec government regulates the distribution of wood based on what has been cut in public forests in the area, and a sudden shortfall at Lauzon comes on the back of new legislation at the provincial level.

Lauzon spent more than $25 million to upgrade its factory in 2007 and worked out an arrangement with the government at the time to receive 210,000 cubic metres of wood a year over 25 years.

However, following an April 2013 reform to the forestry industry, the mill’s quotas were cut in accordance with the new legislation.

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Discussions between the mill and the government have led to the most recent proposed quota of 172,000 cubic metres, which the province said would account for 75 per cent of all available wood in the region.

According to Mathieu Gaudreault, a spokesman for the Ministry of Forests, Wildlife and Parks, this is the most the government can legally offer, adding that the offer is “very generous” and that “not all factories receive proposals of 75 per cent.”

Under the 2013 law, the other 25 per cent of available wood has to enter into the free market by way of public auction. This rule is an effort by the Quebec government to allow freer access to wood supplies for companies without guaranteed agreements.

But Thurso mayor Benoit Lauzon said the latest proposal is too little to keep the mill in operation.

“The sawmill received a supposed final offer from the government which is, for them, not acceptable at the moment,” he said.

Employees were given notice in late May by management that the mill may be forced to close on July 31. A short-term deal is the most likely solution for keeping the sawmill open past then, Lauzon said, adding that losing the mill has the potential to “kill all the forestry production in the Outaouais region.”

Negotiations with the provincial government have been going on for a year, with at least ten face-to-face meetings, Gaudreault said. But the government cannot continue to honour the prior agreement.

“Legally, we can’t do it,” he said. “We can’t make guaranteed supply deals over 25 years.”

The mill employs approximately 300 people, or slightly more than 10 per cent of Thurso’s population of approximately 2,600. And although the town suffered the temporary loss of the mill to a fire in early 2007, Lauzon said any long-term closure would have a domino effect on the local paper mill.

“Losing 300 jobs at home is enormous,” he said. “Plus, the sawmill factory is the main provider for the paper mill. So it’s certain that if the sawmill closes, the paper mill will have enormous operation problems.”

The mill’s parent company is headquartered in Papineauville, Qué. and has six locations in Quebec where the primary focus is the manufacturing of hardwood floors, hardwood pellets and assorted lumber products. The company’s only sawmill is in Thurso.

If it closes, Lauzon won’t be the first in Quebec to fall victim to dwindling supply and higher costs. In May, Tembec Inc. was forced to suspend operations at sawmills in La Sarre, Senneterre and Béarn, Que.

By: Ottawa Citizen

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