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.