Soon enough additional jobs will be available in the Kenora area, after GreenFirst Forest Products Inc. announced its plan on Friday (April 22, 2022) to restart and relocate the former Kenora Forest Products mill site.
GreenFirst says the new mill will create up to 85 new direct jobs and potentially more than 135 indirect jobs.
Stephen Boon, Unifor National Representative who has been in discussions with GreenFirst says he’s glad there is finally a direction and a plan for the former mill.
“The biggest frustration that everyone’s had in the community and the prior workforce was getting the ball rolling in the sense of having a plan and what they were going to do with the mill, whether they’re going to restart the current site or whether not they’re going to move,” says Boon.
“We’re very excited to have a mill that will be run by a large player with a lot of experience in that company with a lot of resources and they’re going to be able to build an efficient large-scale mill that’s going to benefit our members,” adds Boon.
In a prepared release, GreenFirst says they plan to relocate all existing mill equipment and infrastructure to a new location in the Kenora area, which is currently unspecified. Along with moving the former mill site in Kenora, GreenFirst is looking at changing the facilities layout, while modernizing and updating its operations.
The sawmill sits on a 42-acre site, leaving over 72 acres of undeveloped lakefront land on Lake of the Woods.
“One of the problems was it’s a small operation, the site isn’t the best, and do you spend your money and get the current operation going. It’s not in the right size to be competitive in a downturn in the lumber industry.”
More than 125 mill workers were laid off after KFP had to close its doors for the second time, following filing for bankruptcy in 2019. In September of 2020, hopes of a restart become more of a reality after Itasca Capital bought the mill for $11.5 million.
Boon said he has been in contact with some of those members with the hopes of them finding employment at the new mill.
“A number of them are going to want to come back to work, we understand that. We’re going to maintain that communication, and we’re going to have to negotiate a restart agreement.”
A new collective bargaining agreement and restart agreement will need to be negotiated as their previous agreement expired in January 2019. Boon concluded by saying that after talks with GreenFirst he hopes the mill will be operational by the end of 2023 or into the early part of 2024.
This restart and relocation of the former mill site were made possible by a $17.2 million performance-based loan from the provincial government to GreenFirst.
“It was time, we heard loud and clear from folks in Keewatin, that this mills location has lived out its past and would benefit from a new location,” says Minister of Northern Development, Mines, Natural Resources and Forestry, Greg Rickford in an interview with the Q Morning Show.
Rickford feels that the existing 114-acre property has potential for some great future development.
This performance-based loan is conditional on Ontario and the company finalizing a contract and completion of key project milestones.
Prendiville Industries had invested about $22 million in upgrades, before the restart back in 2016. They first purchased the property in 1994. Owners spent another $4 million for upgrades, after a fire in the drying kilns in December of 2017.
Kenora Forest Products sat idle for about eight years during the forestry crisis of 2008, before its restart in 2016. The sawmill had been doing well – adding shifts to reach full production in November 2016 – but the impact of American tariffs on softwood lumber could no longer be ignored by the end of 2019.
The softwood lumber tariffs caused KFP to declare bankruptcy back in December of 2019, with estimated debts of just under $30 million, including about $10 million in disputed tariffs at the American border.
The Ontario government says northwestern Ontario communities depend on forestry for their livelihood, and employment dependency on forestry in Kenora is six times higher than in the rest of Ontario.
The forest sector generated $18 billion in revenue from the sale of manufactured goods and services in 2020 and supported more than 148,000 direct and indirect jobs in 2021.
If completed, this project is expected to generate over $75 million in GDP and annual stumpage revenue of $4.3 million.