Grand Falls: company town

When Stuart started working at the local pulp and paper plant 28 years ago, he was following in the steps of generations before him.  Grand Falls-Windsor, a town of 14,000 in Central Newfoundland, grew up around the mill. Established in 1909, it was the biggest private employer in the region and the undisputed motor of the town’s economy. When it closed this year, over 700 people were left without work.

Beginning in the colonial period and continuing until the late 19th century, it was not uncommon for Canadian towns to be entirely owned and administered by a single industrial interest, an employer strategy to ensure a stable labour force. A number of mining communities, in particular, were developed in this way.

The model became obsolete in the early 20th century, but hundreds of communities across Canada remain dependent on a single industry, and about 300 rely on forestry for their survival. 

Forestry industry in crisis

The Grand Falls-Windsor plant was owned by Montreal-based AbitibiBowater, a company formed from the 2007 merger of Bowater and Abitibi-Consolidated. It’s  one of the world’s biggest pulp and paper producers, but in April, hit hard by the crisis, it applied for bankruptcy protection.

Already suffering before the recession, Canada’s forestry sector has been pummelled by the economic downturn. In the past two years, over 200 mills have closed across the country, putting over 50,000 people out of work.

While the market for traditional forestry products has taken a beating, there is an expanding market for secondary wood products ? manufactured without increasing the harvest. As Canada’s economy emerges from the crisis, there will be pressure on both government and industry to develop more environmentally sustainable methods.

Canadian forestry: Some facts & figures

•    Canada is the world's largest exporter of forest products.
•    About one million Canadians are employed directly or indirectly by Canada’s forestry industry, making it the country’s biggest employer.
•    The USA is by far the largest buyer of Canadian forest products.
•    In 2007, Canada has a roughly 19 % share of the international market for wood fibre and products, but this share is shrinking.
•    From 1989 to 2007, the export value of Canada’s forestry products increased by 130%. In 2008 it dropped by 6.8 %.

AbitibiBowater: Some Facts & Figures

•    The company employs about 16,000 around the world, of which about 11,300 were employed in Canada at the end of 2008.
•    AbitibiBowater listed assets of $9.9 billion and debt of $8.78 billion when it filed for bankruptcy protection in US courts in 2009.
•    More than 9,000 former employees receive a pension.
•    The company manages about 35% of Quebec’s publically owned woodland.
•    In 2008 and 2009, the company laid off about 3380 workers.


Factors in the decline of Canada’s forestry industry:

• The loonie: the high Canadian dollar
• Softwood: The sharp drop in US housing construction means less Canadian exports to its most important market. Canada exports 80% of its softwood to the USA.
• Newsprint: Newspapers are losing ground to other forms of media.
• Sustainability: The industry is coming under pressure to adopt more sustainable practices.

Sources :
Radio-Canada, The Canadian Encyclopedia.com, Association des produits forestiers du Canada, Policynote.ca, Globe and mail, Ressources naturelles Canada et Syndicat canadien des communications, de l’énergie et du papier.