Fraser Papers to Shut Two New Brunswick Sawmills

I never say I told you so but…..

Fraser Papers Inc., a forest products company partly owned by Brookfield Asset Management Inc., said it will close two sawmills in the Canadian province of New Brunswick for two weeks because of weak market conditions. The mills in Plaster Rock and Juniper will be shut starting Oct. 14, affecting 340 employees, Toronto-based Fraser said today in a statement.

I have been yelling for years that we need to understand that the forestry sector is going through structural changes – not temporary fluctuations – and government needs to decide what it wants to do. If it accepts it will decline in its economic influence than we must – we must – find alternative industries over time or many New Brunswick communities will decline and in the words of the BORG – cease to exist.

If they want to try and reset the forestry sector on some new model (a colleague of mine suggested that fibre-based biofuels might be an option), then they had better get cracking. More subsidization of bad business models will only delay the inevitable and siphon off dollars that could have been used to support the growth of new economic sectors.

Lord had his Yakoff Smirnoff (or yakof pourier or whatever) study and they rejected his recommendations. Fine. That’s their perogative. But bailing out firms in the short term (their ultimate ‘solution’) may get you to the next election but not much further (note to Bernie: If you go federal remember this).

If somebody had started to incubate an animation cluster in the Miramichi 10 years ago and attracted UBIsoft and EA and supported Fatkat and others, we could have had 700-800 people working in that sector by now. That would have made any mill closure less impactful.

I know you will say that mill workers can’t do animation and I agree that most couldn’t but the overall effect on the economy would be lessened. If that mill closes, Miramichi may not survive.

As for mill workers, we should be running parallel economic development activities. We should still try and attract DEW type projects there which are more suited to blue collar workers (and some other forestry-based projects).

But the key is to get out front of these trends not wait until the last minute – throw $250 million at it – and wait one more minute.

And for those of you who still think government has no role to support new industry incubation and development, you can keep right on making your point and offering no real ideas and I will keep right on arguing that you are dead wrong.

It’s funny that so many people still think government should be involved in health care, education, law enforcement, natural resources management, environment, yadda yadda yadda but the very activity needed to ensure that we have communities to offer these services in is some how considered not to be a role for government. Leave that up to the market, they say.

As they pack up their SUV for Alberta.

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0 Responses to Fraser Papers to Shut Two New Brunswick Sawmills

  1. Anonymous says:

    Of course thats the other inconsistency that people pay little attention to, that ‘small government is best’ but then the hue and cry for a massive military and police. Canada already far outranks most nations in policing and is well on par with most nations for military, but those are quickly drowned out.

    As they say, governments can get people to support killing people, but not helping people. It’s not a coincidence that the only things that kept the country from imploding twice last century was massive government spending for the war effort. But ask to spread industry out over regions or listen to somebody besides corporations and you’ll get a dull stare.

    Keep in mind that there are literally DOZENS of forest models out there, NB has picked the worst. But the problem is just what you said, “the government”. I’m not sure whether you mean the Jaacko Pyrrhy study, but their recommendations have been taken over all other shareholders in the industry. It’s interesting to note that that norwegian firm is now under litigation in many countries for bribery and fraud.

    Again though, it comes down to ‘profits’. Can’t make enough, and you might as well move. Again, for any new readers, that’s why India nationalized their forestry sector, they are smart enough to know exactly what foreign owners will do.

    There are literally thousands of things that can be done with forests, from utilizing natural products (I can list you forty different types of mushrooms found in NB forests that get ground into dust-and how many types of mushrooms do you see in the supermarket? And thats just one.

    However, again, the problem is POLITICAL. There are five ‘leaseholders’ in the province and if you don’t think they run things in the forestry sector you are simply crazy or stupid, I’m sorry to say it. And the forest model WORKS-for THEM. Until you get people involved in government (so far neither party even addresses this issue) you get no representation.

    Again, take a look at Maine and you will see that when issues like this arise, there are all sorts of citizens groups that pop up to deal with it-because they have POWER. You think Graham or Lord really cares that much about forest workers? By simply changeing the forest model you can still employ those people in the sector they are trained for, and save the communities. The problem is that it is not economic for the corporations, in fact it may well cut them out of the equation, so you can imagine the work necessary to apply it.

    This isn’t meant to apply to those people out there that think government shouldn’t do anything, obviously the government isn’t in this sector. But for the others, there are groups out there, check out http://www.acadianforest.ca. Before its too late. What a wonderful story to tell those visiting grandkids..yes sonny, I watched as the tractors wiped out the forests, had a good view too!