Forestry mini-boom in Sault Ste. Marie

The Ontario Ministry of Natural Resources should be looking at Sault Ste. Marie as an example of how to manage forests and the forestry industry, says Boniferro Mill Works President and Chief Executive Officer Jim Boniferro.

And, the province should be rewarding forestry firms that are doing okay but may just need a little support.

"We'd like to put in our kiln," says Boniferro (shown). "We've already bought it and we own it outright, but it would take about $100,000 to put it in and get it running."

The kiln would only create three or four new permanent full-time positions, he says, but it would be the next and most important step to creating value-added products at the Sault Ste. Marie mill.

"We can't do anything else with our wood until we dry it," he says. "If we had the kiln we could start by making dry lumber for Black Loon."

Boniferro says these sorts of relationships are the secret of the Sault's forest industry success.

"We're very integrated here," he tells SooToday.com. "It would be a fantastic model for the ministry."

The banks have made it clear to Boniferro that they are not interested in supporting his company.

Well, not at any reasonable rates, he says.

They are calling it a high-risk investment.

Boniferro says his bank has also jacked up its interest rates on company loans to eight percent.

That's about four and a half percent over prime.

"I'm not looking for a hand-out," says Boniferro. "I would take a loan if I could get it, and get it at a reasonable rate."

Boniferro says he understands where they get the idea that forestry is a high-risk business.

He used to work for Buchanan Forest Products.

Right now, no one is working for them in Ontario.

Every one of Buchanan's mills are shut down for the time being.

Back in the Sault, little Boniferro, usually operating with about 45 employees, has been running steady since its last shutdown in April 2007.

That was when Boniferro had to close for a few weeks while the rail siding that took its product to market was repaired.

CN Rail said it wouldn't send trains to the mill until the siding was upgraded and City Council gave Boniferro Mill Works an interest-free loan to help pay for work on the rail siding.

Several other businesses also use it.

Boniferro was recently granted an extension to pay back the principal of that loan and the company continues to make payments on it.

He sent a letter to City Council explaining that times were improving somewhat, but the company still has to be careful not to run short of operating capital.

Since then they've hired five kids, as Boniferro affectionately refers to the new hires.

"Having five new employees in their 20s has really given the company a sense of optimism," he says. "Some of them are training in high-skilled areas."

Boniferro says the company is getting very enthusiastic about its future with this infusion of new workers who are interested in maintaining a skill set that's becoming rare with the hits the forest industry has been sustaining in recent years.

One thing that Boniferro is not very optimistic about is the decision on his appeal of thecompany's civil suit against the Ontario Ministry of Natural Resources.

About a year ago, Boniferro Mill Works successfully sued the MNR over what the company said was unfair and illegal taxes charged by the ministry.

As reported earlier by SooToday.com, Ontario Superior Court Justice Gary Tranmer ruled that the residual value charge imposed on Boniferro by the ministry was collected unlawfully and must be repaid.

Justice Tranmer handed down his 20-page judgment on January 22, 2008.

On February 20, the Ministry of the Attorney General served notice that it would be appealing that decision.

Boniferro says that, based on the speed at which appeal decisions are being posted on the ministry's web page, he'll be somewhat surprised to see a ruling before February 2009.

"It's ironic that Justice Tranmer handed down his decision in just a few weeks," says Boniferro. "And now the fees are down to zero, but we still want to deal with the issue."

Boniferro says the forestry industry in most of Ontario is in such bad shape that the ministry is now taking no residual value charges.

But that would change if things improve and Boniferro maintains that the charge is an illegal tax.

He hopes the Ontario Court of Appeals agrees with him, and not just for the health and prosperity of Boniferro Mill Works but for the entire industry that he says has been decimated.

Besides, if the courts find in his favour and the Ministry of Natural Resources settles quickly, Boniferro can get his new kiln installed and running right quick.