Friday, December 14, 2007

Another Mill Bites The Dust


As we mentioned last week, Canadian lumber mills are being shut down all over the place.

Here's the latest one:

VANCOUVER - International Forest Products has announced the indefinite closure of its Queensboro sawmill in New Westminster, offering voluntary severance to the mill's 110 staff and workers.

This one is particularly scary, because it is:

(O)ne of only two modern sawmills on the B.C. Coast designed to manufacture lumber from the coast's growing supply of second-growth timber.

And while some might want to make a case that there could be a bit of anti-union retribution in the mix here, the business 'analysts' are apparently playing this in the usual straight-up fashion, re: the reasons for the shutdown:

(T)he mill has never performed to expectations, said Kevin Mason, forest products analyst for Equity Research Associates.

Mason said the prolonged downturn in demand for construction lumber in the U.S., coupled with the rise of the Canadian dollar proved to be obstacles too great to overcome.

Now, one thing Mr. Mason apparently did not mention (or if he did, it was not reported upon by Gordon Hamilton who wrote the piece for the V.Sun) is the fact that that:

"(I)n a down market like right now (also) sees you paying a 15 per cent export tax."


Why do Canadian lumber producers have to pay an EXTRA 15% on top of everything else that is stacked against them when the dollar is high and prices are bad?

Because that is precisely what Mr. David Emerson's Softwood Lumber Anschluss says they have to do.

Nice deal that, eh?

For the Americans we mean.

All of which has us wondering if Mr. Emerson also crossed the border when he crossed the floor so that he could keep on 'getting things done' while working for the HarperCons.



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