Spectre of Skeena rises over troubled BC pulp industry

With a growing list of closed, or in the process of closing pulp mills across the province there is a rising tide of debate that the provincial government should become more pro-active in boosting if not ensuring the survivability of the once dominant forest industry in the province.

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The headlines there of late, seem eerily familiar for Rupertites as community after community, tries to come to terms with the shutdown of a major employer and the seemingly endless rumours of what may be on the horizon for it.

Out of Nanaimo recently has come a call for the Liberal government to buy the assets of the Harmac mill, a large industrial engine on the central island and one of the major employers in the Nanaimo region.

However, not everyone it seems is anxious to revisit the days of government intervention, a letter to the editor writer to the Nanaimo Daily News, used the two past government interventions into the Skeena Pulp Mill on Watson Island as a decision that ran contrary to the evolution of market forces and one that should not be repeated in the case of Harmac.

We're sure that the letter will provide more than enough kindling for some hot letters in reply over the next few weeks at the Nanaimo paper.

It's not the government's job to pay for forestry mills
Letter to the Editor

The Nanaimo Daily News
Friday, May 30, 2008

Re: 'Government should buy what private sector ruins' (Your Letters, Daily News, May 20)
If the letter writer believes that the purchase of the Harmac pulp operation by the provincial government will set that failed private operation on the path to profitability, she might want to consider that our provincial government "rescued" the Skeena Cellulose operation in Prince Rupert twice, once in the early 1970s and again in the late 1990s, spending more than $450 million in the process.

Soon after the government of the day "saved" the Skeena operation the second time, the Gold River pulp mill was closed down due to a pulp glut.

Skeena eventually went bankrupt (the government had the good sense not to try and bail it out a third time), was sold (we recovered only $6 million) and has not been in operation for the last nine years.

As disruptive to the individuals involved and harsh as it may seem, we need to let the market forces and private initiative work this out or we will very likely, once again, become subjected to the very expensive law of unintended consequences, the recent success of the potash industry notwithstanding.

As far as the private sector ruining Harmac, the statement that "when the problems with a business are so obviously internal and not external, it is time to give the business of infrastructure back to the people . . . " shows either a deep knowledge of the operation or a lack of understanding what the external effects like the collapse of the U. S. housing market and a 50% increase in the Canadian versus the U.S. dollar had on the business.

Hans J. Larsen, Lantzville