bishop's falls to buchans

Tuesday, March 28, 2006

paper industry bailed out again

I hope that the Minister, Ed Byrne, has some vision for the next step in 12 months because government bail outs only avoid the real problem and postpone the true economic fallout. To me it seems that the inherent competitive advantage that Newfounland held in the pulp & paper industry has vanished. An abundance of high quality wood, cheaply harvested is no more. The hydroelectric advantage has dissipated with very few recent developments of any scale on the island. Last but not least, the loonie's recent run has hurt when competing with the US and South America.

Until Abitibi & Kruger rationalize their industry and straighten out their financial houses it will be rough times for the Badger drive! Politicians do not help the issue by supporting an unviable economic model in an inefficient manner. I shudder to think what would happen to the wood harvesting industry without the hidden subsidy of EI. Talk about pain, right now they don't know pain!


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