21Inc, closing mills, gambling & NB Power

A few diverse subjects this a.m. but I’ll address them rapid fire:

21Inc. – I don’t know about this kind of thing. Picking 21 young people, getting them together and positioning it as leadership training for the future. Certainly it can’t hurt but these low cost, feel good initiatives are no substitute for high cost, serious effort, credibility challenging efforts. I sincerely hope that whoever is heading up 21Inc. that they take a long hard look at why kids leave this province. Not the usual crap.

Upwards of 25 more mills are potentially looking at shutting down – at least temporarily. I think the government would be well advised to look at a serious long term strategy for the forestry sector based on real value add and not on being Home Depot’s 2X4 supplier. Read that blog on the Scandanavian example.

Someone asked me why I didn’t comment on the new gambling strategy. I don’t because I don’t know much about the sector. It seems to me that it siphon’s off entertainment money from other areas of spending so the only net new economic activity from it would be reclaiming money lost to the N.S. casinos and possibly tourists. But I don’t know that tourists will come here to gamble. As a result, I don’t think this is much of an economic development issue – except at the local level where community’s will vie for their share.

NB Power’s David Hay has some big brass cojones. He was out yesterday suggesting that we need dramatic increases in electricity rates to curb usage and make people more ‘green’. Well, given that rates have increased dramatically under his tenure, I think we are well on the way. In addition, I think people might be a little more sensitive to Hay’s message if New Brunswick actually had a green energy strategy. I think people might actually pay a little more if 30% or more of our electricity production was from green energy sources – produced in New Brunswick. But, as usual, NB Power is among the least innovative utilities in Canada and as a result we get scoldings from David Hay about our excess energy consumption. Sheesh.

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0 Responses to 21Inc, closing mills, gambling & NB Power

  1. Anonymous says:

    Hi David,

    Please add the link to the Scandinavian blog you refered to.

    Sure, the forest industry is going through a challenging time right now. The dollar has been at Par before, but not matched with a 10 months new US housing inventory and oversupply of lumber from BC due to their bettle infestation, to name a few challenges.

    The forest industry has built the economy of this province and trees will continue to grow and provide significant returns to the provincial coffers. Yes, we are in a downward cycle, but the industry has bounced back before.

    It is important to understand that 2/3 of every harvested tree is used as wood chips. Chips that in turn make paper and tissue paper. A recent CBC interview with a CIBC economist put Ethanol and tissue paper in comparison, the cellulosic ethonol added 8 times the value of trees, while tissue paper multiplied it by 35.

    The Forest industry is diversified and will bounce back.

  2. Anonymous says:

    I agree that the forest industry is diversified enough to survive. But is survivung nearly enough? I think we will always have this problem with forestry when it so dependent on the markets that they are trading in. Although diversified the forest industry really needs to seek out alternate markets and products. Bring the industry up to date and seek out the environmental market. I believe that Irving is too involved in this sector to be of any assistance and I doubt if any of the independent corporations have the resources or inclination to bother when they can get handouts from the government but something radical is required and fast.
    I’m not convinced about the gaming initiative. I agree with anon that it could simply take money from other sectors – a thinning out of revenue if you will. What is required is something that will attract clients to the type of casinos advocated. Something like the Portage resort for instance which was in the market for getting involved in the racino thing. Not only would something like that help to attract foreign gamblers but it would also help to market the facilities and the province abroad.
    Just one mans thinking.

  3. mikel says:

    Very interesting blog post, couldn’t agree more about NBPOwer, but those decisions come from the government-not from NB Power. Notice that he is making a recommendation-not stating what he is doing. NB doesn’t have a green plan because of Irving and the provincial government-not because of NB Power.

    As for gaming, Saint John is an iffy spot, however, a survey did show that tourism was quite high during hte summer, however, investors don’t just want summertime profits. Saint John is NOT Niagara Falls, is not even Halifax.

    So like the introduction of VLT’s in the nineties, it simply siphons off more money on the poor and destitute, something the government has no problems with. However, compare that with a place like Switzerland which just ended a national debate on whether gamblign should be allowed or not.

    The result has been yes, they approved it in a national referendum (not all areas have approved them locally though), however, the debate meant the population took a serious look at the issue (because they were voting on it and actually have a real media system).

    So, for example, people from WITHIN the city aren’t allowed on the premises. This keeps the money from being cannibalized by the city, most of europe operates their casino’s in this way, while Ontario locates them away from urban areas.

    Also, there are time limits strictly enforced, unlike the stereotypical US version where a floor manager has to just remind you that you’ve been there awhile. This means that its impossible to ‘become addicted’ as the research clearly shows that it is consecutive use that leads to the most addictions (it is possible for a person to hop in their car and drive three hours to the next casino, however, the cards are national which means they won’t gain admittance.

    Thats a much different outlook, the perspective is that ‘they’ don’t want addicts and will do everything in their power to stop it. ‘Our’ perspective is that addiction is a ‘personal failing’ and the state doesn’t have to do any more than perhaps require some counselling.

    As for forestry, although it has ‘survived’, it has ALWAYS led to decreasing revenue for the province and a decreasing number of jobs. So why have a forestry system that essentially continues the slide? The value added idea is a valid one, however, ‘community use’ is also one that has been put forth by native communities and rural communities. In other words, like you say about energy, the wood can be used locally for cheaper building supplies.

    THink of this, sawmills close, that means wood is shipped to Quebec or elsewhere, lumbered there, then you go buy it at Home Depot for their prices, which of course Kent will happily match.

    It’s ironic to think that the forests are worth almost literally pennies per tree, and the ‘people’ own almost half the land, yet housing prices are still over a hundred grand. As an aside I’ve worked in the forestry sector, and while there have been ‘bad times’ they are nothing like now. I’m sure back in Noah’s day there were some people saying ‘it’ll stop any second’.

  4. David Campbell says:

    Love the Noah reference.

  5. Anonymous says:

    Didn’t Bernard Lord have a program like the 21 inc.? Some group of youngsters who were going to do something or other on the taxpayers dime.