Thirty Waswanipi residents are drawing Employment Insurance after the Nabakatuk sawmill temporarily shut its doors last month.
The closing has renewed alarm in the community about the cost of keeping the four-year-old sawmill open.
“(The employees) took it pretty well. They understand we had no choice but to close,” said Peter Gull, a member of Nabakatuk’s board of directors.
“It’s the price of wood — it’s really gone down. It’s costing us more to produce it than we could sell it for, so we were going into debt,” he explained.
Gull is also vice-president of Mishtuk Corp., the Waswanipi band’s logging firm, which jointly owns the mill along with the forestry giant Domtar Inc.
It’s not clear how long the mill will be closed. “I’m not really sure,” said Gull. “It may be one month, maybe more.”
Nabakatuk has run a deficit ever since it opened in June 1997, losing $2 million in its first 10 months of operations.
The 10-month loss was almost two times higher than projected.
When the sawmill was first proposed, many residents were worried it would be a financial drain on the community. Last month’s closing is renewing these concerns.
Waswanipi Chief Paul Gull estimated the band has sunk $2.2 million into the sawmill since it opened. Plus, Mishtuk owes the band another $800,000 for stumpage fees. Mishtuk’s logging operations supply the wood processed by Nabakatuk.
“We’re trying to come up with control measures over the longterm,” said the chief. “We’re trying to make sure we get the money owing to us, instead of bickering over it every other day.”
Chief Gull said that at a certain point, the band can no longer sink funds into the money-losing sawmill.
“We’re under financial restraint,” he said. “(Bailing out the sawmill) has an impact on our funding.”
Paul Gull said the sawmill was closed for two reasons: falling wood prices and a lack of wood. Mishtuk has been forced to cut in Category I land to supply the mill.
“We don’t have enough wood to operate. It will not be feasible with the amount of wood we get,” said Gull.
Waswanipi residents say the closing of the sawmill is having ripple effects through the community, as businesses and families that depend on it feel the effects.
“It’s had an economic and social impact in the community,” said the chief.
Peter Gull is optimistic about the mill’s future, saying wood prices are climbing and that the mill isn’t losing as much money as in its first 10 months of operations. He said there was a “small loss” last year again, but wouldn’t say how much, saying he couldn’t remember.
He also denied the sawmill has a lack of wood: “We could have kept going. We had the timber supply.” Gull predicted the mill will turn a profit after a coming injection of $3 million for new equipment under an agreement with the province.
The mill’s acting director-à general, Georges Pagé, didn’t return our call.