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December 2006 / January 2007 - The Logging and Sawmilling Journal



A voice for loggers

Ontario’s logging contractors, and associated businesses, are looking to get a united voice through the new Ontario Forest Business Association so they can better deal with issues like workers’ compensation rates and reimbursement of the province’s fuel tax.

By Tony Kryzanowski


When scientists want to test the health of an ecosystem, they focus on what they call “foundation” species like grizzly bears and wolves. If these species are doing well, it generally means that everyone else along the food chain is probably doing well, too.

The same can be said of the forest industry, where the logging contractor is a foundation species. If logging contractors are financially healthy, then chances are that insurers, fuel suppliers, tire shops and equipment dealers are also prospering. However, when contractors are suffering to the point of becoming an endangered species, that creates stress on many forestdependent businesses and communities.

That’s why a group of contractors, equipment dealers, insurers, forest product manufacturers, academics and forestry-dependent business people got together to establish the Ontario Forest Business Association (OFBA).

Focus on the logging side: the new Ontario Forest Business Association is out to focus on the needs of the grassroots logging contractor.

Headquartered in the Forestry Centre at Confederation College in Thunder Bay, its purpose is to represent the interests, provide education and assistance, and to promote careers in all aspects of forestry businesses from the bush to the mill. “Everybody had a lot of concerns, and as one person, you don’t have a voice,” says veteran stump-to-dump contractor, Leon Degagne. “As a group, you do.”

Degagne is a Fort Frances, Ontario contractor with over 35 years experience, having started in the logging business back in 1968 with a single truck. As such, he speaks volumes for the on-the-ground contractors, as an OFBA director and as one of the wisest old grizzlies in the bush.

Today he operates about 20 pieces of equipment to harvest wood for Buchanan Lumber, Ainsworth Lumber, and Abitibi- Consolidated. He named a number of issues where logging contractors are unfairly treated with regulations, policies, and procedures that make no sense, yet cost them a lot of money. According to the Minister’s Council on Forest Sector Competitiveness Report released in 2005, Ontario’s hauling and road construction costs are second in the world only to northwest Russia.

“People talk about high wood costs,” Degagne says. “But as a contractor, if you are forced to throw your money in the ditch over stupidity, you’re going to have high wood costs.”

The OFBA is not intending to act as a high-powered lobby group on the same level as the Ontario Forestry Association or Ontario Forest Industry Association.

“Those associations have extremely important roles to play,” says Cam Rosa, an OFBA director and assurance underwriter with the Superior Group. “But they can’t focus specifically on the needs of the grassroots contractor. That’s our focus.”

He gave the example of a recent Ministry of Transportation proposal related to changing the configuration of log trailers, which would not have worked in northwestern Ontario. Through networking with organizations like the Forest Engineering Research Institute of Canada (FERIC), writing some letters, and putting together a group presentation indicating why there were problems with the proposed changes, the OFBA was able to have the changes deferred for more study.

A bone of contention in the Ontario industry is the bureaucratic red tape logging contractors have to deal with, such as certifying equipment operators on machines that they have been running for many years.

However, the OFBA intends to work with existing lobby groups on issues where a strong and united voice from the forestry sector is to everyone’s benefit.

After an admittedly slow start because of its reliance on volunteers, the OFBA is ready to grow beyond its main support base in northwestern Ontario to attract membership from throughout the province. That started with the hiring of an executive director, Mike Shusterman, and an executive assistant manning the OFBA office at Confederation College.

The OFBA board recently held a visioning meeting to establish Shusterman’s priorities, the number one priority being attracting membership from throughout the province so that the
association can become financially selfsustaining. He and Rosa recently attended a forestry show in Bancroft, which resulted in some new members.

The membership drive will continue to be a major priority and Shusterman will be spending a lot of time in the short term making contact with potential members and providing them with information about the OFBA’s objectives.

Degagne itemized some specific issues that contractors would like addressed immediately. One is the workers’ compensation premiums that logging contractors pay compared to equipment operators in the construction industry. Degagne says that the rate for contractors operating the same type of equipment in the water and sewer industry is only four per cent compared to 12 per cent for logging contractors. The excuse given for these higher rates is that logging is a more dangerous environment compared to construction.

“What I hope the association will accomplish is to create a level playing field with our compensation rates,” he says. “The workers’ compensation people say our rates are high because of our industry. It was different when people were cutting with power saws. But we’re now sitting in the same machines that are used in water and sewer construction.”

Another key issue related to the profitability of logging contractors is the 14.3 per cent fuel tax. “We run probably 40 to 50 per cent of our miles with our log trucks on off highway roads, yet we are paying 14.3 per cent fuel tax,” says Degagne. “We’re going to try to get that back from the government, whether it be by installing GPS systems in trucks to be able to log the mileage or whatever.” The OSBA has approached the government fuel tax authorities with its concerns.

Next on the logging contractors’ hit list are barriers to hiring new log truck drivers. Degagne says the insurance industry won’t insure a new driver unless they are at least 25 years old and have three years’ driving experience. This has contributed to a severe shortage of log truck drivers.

“How do you get three years’ experience if you never drive?” asks Degagne. “So it doesn’t make any sense. A guy can be 50 years old, but he still can’t get insurance.”

There has been some progress on this issue because—by negotiating as a group—the logging contractors have received an indication from some insurers that they would be willing to insure new drivers as long as they participated in a specified driver training program.

A final bone of contention is the amount of bureaucratic red tape that new and existing contractors must overcome with government to qualify to stay in business. “We have to certify guys to run machines when they have been running machines for 25 and 30 years,” says Degagne. “Stuff like that is not necessary.

I can see a safety awareness program for new guys coming in. But to have to spend thousands of dollars to certify people to run equipment that they have been operating for 30 years? We’re throwing our money in the ditch. These are the kinds of things that are killing contractors.”

In addition to lobbying for more realistic certification standards, the OSBA plans to develop a library and inhouse expertise to help new contractors understand and implement regulatory

Both Degagne and Rosa feel the OSBA initiative has the potential to develop into an important voice for Ontario’s many logging contractors. “I think it is going to get off the ground and get going,” says Degagne, especially with the recent hiring of a highly qualified and knowledgeable executive director. The OFBA currently has about 400 members and is looking to grow to 4,000 members.

“We think we have a model here that will work for Ontario,” says Rosa. “We just need the membership.”


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