Money well – not well – spent?

Remember the $250 million forestry industry incentive package announced by the Lord government a couple of years ago?

It seems to have worked (tongue firmly planted in cheek). Two more sawmills have been shuttered (Petitcodiac and Freddy) bringing the number to a staggering 13 mills. Then there’s the shutdown of the UPM mill in Miramichi. In addition, several furniture manufacturers are downsizing.

Money well spent, I guess.

Here’s a weird idea. Why wasn’t that $250 million spent to diversify us out of those problem sectors? There’s hardly a dime for developing new sectors but $250 million to try and prop up a dying sector. Hmmmm.

Even within the forestry sector why not try and convert into more value added products? Pellets for consumer energy in Europe? Other value added stuff?

I know that some will decry an Irving conspiracy. Who knows?

I did hear something interesting. It’s totally unconfirmed but I heard the Irvings are bring up trees from Latin America to use in their pulp mill.

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0 Responses to Money well – not well – spent?

  1. Anonymous says:

    No doubt there will be further money pumped into the forestry sector again soon. Again this is part of our compulsion to keep persevering with traditional industries that are tied to a dependency on a struggling US market. We need to upgrade our thought processes on this and embrace newer industries that work in different markets on other continents.
    I’ve heard that rumor about Irving too and it doesnt surprise me. In fact, the person that told me about it was speaking in a very matter of fact tone. Almost as though it is only to be expected of Irving. Irvings provincial pride can be bought for a few hundred bucks on any day of the year. The ironic thing is that somewhere along the line we probably paid for the shipping charges.

  2. Anonymous says:

    David,

    You should call BNB and DNR and ask how much of the $250 million was actual new dollars.

    From what I understand, most of the money was from existing silviculture $$ for the next 10 years.

    Hardly $250 million for forest industry. In fact, assisting sawmills would be countervailable and subject everyone to large scale tariff from our friends to the south.

    I invite you to read “why Mexicans don’t drink Molson” from Andrea Mandel Campbell. It is a very interesting read. It covers many different sectors and explains why Canadian companies have been shut out of the global economy.

    Too often, it is government intervention.

  3. David Campbell says:

    I don’t really have the time to research this (although someone should). But we do know they gave UPM $5 million in 2006 to get them through the provincial election.

    You might have to do some manipulation to access this link but in the announcement of the $250M package, they earmarked $50 million “provide companies with funding for capital expenditures and working capital to modernize facilities and adopt new technologies.” That’s $55 million in straight corporate subsidies. The other stuff $10 million for training, etc. is also direct cash to companies.

    http://www.gnb.ca/cnb/
    news/nr/2005e1738nr.htm

  4. Anonymous says:

    No point in calling BNB. They are all probably asleep after a long and heavy lunch and it would be too strenuous for them to pick up the phone.