Kruger to trim production by 25K tonnes in first half of 2009

A short news release from Kruger on Wednesday confirmed the company will shed 25,000 tonnes of production in the first half of 2009 with the cuts being spread across the company’s three Canadian mills.

KRUGER TO REDUCE NEWSPRINT PRODUCTION IN 2009

Montréal (Québec), January 7, 2009 – Kruger Inc. announced today its intention to reduce its newsprint production by 25,000 tonnes in the first half of 2009. This curtailment will allow the company to re-balance its order book to capacity. The downtime will be spread throughout the Company’s three Canadian mills.

Founded in 1904, Kruger Inc. is a major producer of publication papers, tissue, lumber and other wood products, corrugated cartons from recycled fibers, green and renewable energy and wines and spirits. The Company is also a leader in paper and paperboard recycling in North America. Kruger operates facilities in Quebec, Ontario, Alberta, British Columbia, Newfoundland and and Labrador, in the United States and the United Kingdom and has 9,000 employees.

This cut will affect the mill at Corner Brook but no details were released by Kruger.

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Kruger shuts machine at Corner Brook

Faced with declining demand and a high Canadian dollar, Kruger Inc is shutting Paper Machine No. 1 at its Corner Brook operation. The shut-down is for an indefinite period beginning November 5 and will reduce the mill's output by 80,000 tonnes annually.

No sign when the provincial government first learned of the decision, although it was far enough in advance to see the natural resources minister shipped to Corner Brook for a media availability. Kathy Dunderdale told CBC's Radio Noon that the provincial government had "invested' heavily in Kruger's Corner Brook operation in recent years. Dunderdale put the figure at $20 million. That would include a harvesting subsidy announced by Dunderdale's predecessor Ed Byrne to Kruger in March 2006, although the government didn't announce the price paid at the time. That amount would also include a power cost subsidy of $10 million Dunderdale announced last October.

Dunderdale said 83 people will be laid off as a result of the machine closure but that the figure might be reduced to 13 due to layoffs.

Kruger closed one machine temporarily in July, 2007 citing the same reasons as the ones given on Monday.

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Two thirds of three fifths of f*** all

There’s an old limerick that, among other things, speaks to the ridiculous use some people make of numbers.

Like say, repealing an old piece of legislation that is long spent and then claiming the process that this contributes to government’s project to eliminate red tape.

The spent legislation is an act that gave effect to a series of agreements involved in the sale of Corner Brook Pulp and Paper Limited to Kruger in 1984. It’s an easy read, in plain English, and involving only 10 clauses and a couple of hundred words.

Take, as an example, this clause:

9. (1) Subject to the approval of the Lieutenant-Governor in Council, the Honourable the Minister of Finance on behalf of the Crown is authorized to enter into, execute and deliver agreements amending the agreements referred to in this Act.

Pretty simple stuff.  The finance minister can negotiate changes to the agreements if need be and if approved by cabinet.

There is not a single line in this entire piece of legislation that creates a single useless, unnecessary or irrelevant regulatory burden on business.

Not a one.

To go by the words of the business minister earlier in May, there is not any element of this 1984 statute that would  involve“administrative and regulatory inefficiencies, including excessive regulations, requirements, reporting, processes and paper.”

Nothing.

So why then, would the minister responsible for the Kruger agreements repeal act make this demonstrably ridiculous statement in the legislature:

The repeal of this legislation, Mr. Speaker, will reduce an additional sixty-five regulatory requirements from government’s operations.

By the minister’s own words – a mere few seconds before that claim was made – “[a]ll of these agreements now have expired and because these agreements have expired… this legislation is no longer required and will not impact on Kruger’s operations in any way.”

What we have here is a clue to the entire sham of red tape reduction.  While there are undoubtedly some good measures in the red tape project, the announcement earlier this month of government’s triumph contained both a raft of things that had nothing to do with red tape reduction and a few more elements that are entirely bogus.

Like this Kruger one.

Blatant misrepresentation – i.e. spin or bullshit -  has apparently become such an integral part of government’s political communications that it spills out into relatively simple things like a statement in the House repealing an old statute. There was no need of saying much about, but the minister rambled on for a few seconds and then threw in this little piece of nonsense about red tape reduction.

The bullshit is not without meaning.

If you take a look at these two elements – Kruger and red tape – you see a government which must make things appear to be much larger and more significant than they are.  The evident reason is that someone, somewhere in the bowels of government thinks it is important to make it appear that government is actually up to something productive.  So intense is the need for aggrandisement that even the trivial is co-opted to the cause.

Of course, for those familiar with the Rule of Opposites, such obvious knob polishing only makes one wonder what the bullshit is intended to conceal.

Pile up enough crap and you can hide just about anything. 

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Province pays multi-nationals to keep locals employed

The upshot of this ministerial statement by provincial natural resources minister Ed Byrne is that the Government of Newfoundland and Labrador is willing to pay a large international company so that local workers will keep their jobs.

We have reached a short-term agreement with Corner Brook Pulp and Paper that will see them continue to purchase pulpwood from the Northern Peninsula this year. In exchange, the province has agreed to look within its existing budget to see what can be done to mitigate the costs to the industry of the fire suppression, spray, silviculture and access roads programs.

Byrne explains later in the statement that the Kruger mill in Corner was planning to import wood from the Maritimes which is now on the market as a result of mill closures there. Kruger could get the wood brought by barge across the Gulf of St. Lawrence for less than they could get wood cut on the Great Northern Peninsula and brought to the mill by truck.

But now Ed Byrne will write Kruger a cheque to subsidize its operations so the loggers will get paid and, presumably Kruger will still bring in the wood from the Maritimes.

There are 250 seasonal workers affected by the decision, so it's only fair to ask how much money government is putting into Kruger. When about the same number of jobs came on the block in Stephenville, government was willing to drop upwards of $12 million a year to create a situation where basically we'd have been paying the company to take our resources away and make money on them.

So how much cash is involved here?

But more importantly, one must wonder why a couple of hundred part-time workers on the west coast got swift action on their grievance when on the south coast the people of Harbour Breton are in the second year of waiting for Danny Williams to do anything substantive for them.

And, more to the point, Fishery Products International on the Burin peninsula are waiting for the province to come up with an older-worker-adjustment program, commonly known as early retirement.

When can the people of the Burin peninsula expect the same speedy commitment of provincial cash to help them out?

Kruger closes CB paper machine, other companies may follow suit

Kruger Inc. announced late on Friday that it was shutting down a newsprint making machine at the company's Corner Brook mill effective July 22.

The company blamed the rising Canadian dollar for the unexpected shut-down.

Other factors also likely played a role, namely surplus capacity in the North American market coupled with surplus production capacity.

Editor & Publisher reported on July 5 that North American newsprint demand fell year over year by slightly over 8% in May and was down 11% in the first five months of 2007. The online edition of the newspaper industry journal also reported:

Further closures by Abitibi-Consolidated Inc. or Bowater Inc. are not likely to come until after the two companies merge, which is slated for late July. Mid-sized companies also are expected to indicate plans to close high-cost machines this year, noted Dillon.

Recently, some producers announced closures. Catalyst Paper Corp. indicated last month that it would indefinitely idle its 134,000 tonnes/year No. 4 newsprint machine at Port Alberni, B.C., by Sept. 1. More recently, a June fire at Abitibi-Consolidated Inc.’s Grand Falls, Nfld., newsprint mill resulted in a decision to shut the mill down for three weeks for repairs. Meanwhile, Kruger Inc. reportedly announced downtime at several mills.

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The Kruger Nexus #nlpoli

As an astute reader pointed out in a n e-mail Tuesday morning, the Hebron-Muskrat Falls connection is not really as important these days as the the connection between the future of the Kruger mill at Corner Brook and the plan to develop the Lower Churchill.

Manitoba Hydro International noted that connection in their review of part of the Muskrat Falls project for the public utilities board. In instance, a relatively modest change in the project cost coupled with the closure of the Corner Brook mill, erased the Muskrat Falls advantage:

Also, should the existing pulp and paper mill cease operations, and its generation capacity be available for use on the system (approximately 880 GWh), and should the capital costs of both the Muskrat Falls Generating Station and Labrador-Island Link HVdc projects increase by 10%, the CPW for the two Options would be approximately equal.

Nalcor has no export markets for most of the electricity from Muskrat Falls.

Death watch in Corner Brook for province’s last paper mill #nlpoli

Kruger, the owners of Corner Brook Pulp and Paper, are reassessing the viability of the mill in the west coast city on Friday after unions at the mill rejected a company proposal to restructure the company’s pension plans.

In a statement issued Friday, natural resources minister Jerome Kennedy said:

We are facing a grave situation, one which could potentially lead to the closure of Corner Brook Pulp and Paper Limited. Kruger is now reassessing the viability of its operations in Corner Brook. This obviously could have very serious ramifications for the employees and the entire Corner Brook area.

The provincial government wants the company and the unions to negotiate a settlement to the dispute.

Built in 1923, the mill at Corner Brook was the second paper making operation in Newfoundland after the Anglo-Newfoundland Development Corporation mill at Grand Falls.  AbitibiBowater announced that it would close the mill at Grand Falls in 2008.  The provincial government expropriated the mill and all of AbitibiBowater’s assets in the province before they could shut the mill.  Ab closed its Stephenville operation in 2005.

The Corner Brook mill is heavily subsidised by the provincial government.  It is the largest private sector employer on the west coast of the island.

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It’s not called Answer Period

And sometimes you wonder if the cabinet minister involved doesn’t want to answer or doesn’t know the answer.

Consider this exchange between opposition house leader Kelvin Parsons, natural resources minister Kathy Dunderdale and the future of Corner Brook’s Number 4 machine.

Dunderdale’s been known to be dodgy with the details before.  In late 2006, she actually told the House two completely different stories about the Joan Cleary fiasco all within the space of a week.  She may have just been stumbling at the time but she wound up – in effect – misleading the House about what was on the go with the hand-picked partisan head of the Bull Arm Corporation and the Public Tender Act.

In the case of Corner Brook, one suspects Dunderdale has avoided any potential embarrassment by learning that the session of the House is called Question Period.  No where does it say you have to give an answer.

On May 14, Parsons asked Dunderdale:

What, if any, discussions have been ongoing between government and the company with respect to number four and to ensure that it will re-operate in the future?

Dunderdale’s response:

Mr. Speaker, first of all I have to correct the Opposition House Leader. Thirty people were not laid off. Thirty people were affected. In fact, there has been no job loss. There has been hours of workers on the call-in list affected but there have been no layoffs permanent or temporary as a result of the shutdown of number four.

Now, Mr. Speaker, Corner Brook Pulp and Paper made it quite clear in their announcement yesterday that markets have not improved. In fact, one of their largest customers does not have the need and requires less paper.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please!

MS DUNDERDALE: So, because of those circumstances, number four will, from a month-to-month basis, continue to be shut down.

At least one paper machine at Corner Brook has been idled since 2007. Dunderdale said at the time the provincial government was pumping $20 million in subsidies into the Corner Brook mill.

Her predecessor, Ed Byrne, announced subsidies for Kruger in 2006 but didn’t reveal the dollar amount involved.

In the latest round of cuts at Kruger, the provincial government is already offering unspecified additional cash to keep the mill going.

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Kremlinology 15: as warm and fuzzy as your old blankie

Last fall was rough on the provincial Conservatives.

Back to back resignations followed by the by-election loss in the Straits and the strong Liberal vote in Terra Nova.  That’s old news to Bond Papers readers.

Things are rough for the Conservatives in Corner Brook as well.

Between the push-back over the Grenfell mess and the possibility that the Kruger mill may shut its doors permanently, there are plenty of reasons for provincial Conservatives to be sweating the possibility of a strong anti-Tory hum on the Humber.

You can tell things are rough because the Premier took the time to head to Corner Brook last week for a party fundraiser – a point the conventional media neglected to point out - encouraged the Kruger unions to give the company whatever it needs to save the mill and pick a fight with people who had pissed him off:  He took a shot at Grenfell principal Holly Pike and others. 

The local paper – The Western Star – warned him about the problems before the speech and then spanked him publicly for his attack on Pike after the speech.

That last bit is a sure sign of how bad things are for the Tories.  What they said was nothing strong at all, but in a province where  - since 2003 - the conventional media like to serve warm milk and cookies editorially, a couple of simple declaratory sentences can come across like  a cross between the 95 Theses and the Declaration of the Rights of Man.

The real sign of the troubled times in Tory circles is the remarkable change in tone.  Suddenly ‘stachless health minister Jerome Kennedy took the trouble to call an open line show this week when it isn’t polling season and nothing is exploding.

He talked at length about the changes he wants to bring after the budget is over.  Kennedy wants to start travelling around the province, talking to the great unwashed masses in their own native habitat. He wants to get real opinions from real people on things the government could be and should be doing.  

We are not talking complete farce here.  Kennedy spoke in calm tones and used language about including people.  A lesson he learned in the by-elections, so Kennedy said.

That’s right in line with another sign, namely a recent tour by several cabinet ministers of towns along the coast of Labrador.  Even Tommy Hedderson took the time to get out of St. John’s and visit real people in real towns.  Hedderson you may recall was the guy who – during the Straits by-election – talked about how wonderful it was to get back into that part of the province for the first time since 2001.  Yes, the fisheries minister hadn’t been able to visit a district with fish troubles until his Leader dragged him along to go save the Leader from political embarrassment.

And let’s not forget the funding announcements.  Before Christmas it was the new hospital for Corner Brook which – we now learn – may well be a tertiary care centre to rival the one in Sin Jawns.  There is money for Grenfell, the bags of which was something the Premier duly noted as he pointed how some people were insufficiently grateful for his generosity.

One of the Labrador ferries will be relocating to Corner Brook, at least for the winter at least for now.

Now there’s Terry French heading to Corner Brook to make an announcement on funding for the provincial government’s arts centres. That’s on top of the money French already announced for the local stadium.  This was not, the finance minister would assure us, a sign that budget allocations have already been made for 2010.

These sorts of things may be old hat everywhere else in the civilised world but in this province since 2003, they are almost unheard of.  Until now, the whole business of keeping in tune consisted of letting cabinet ministers work from an office set up wherever in the province they happened to live.  And even then, the main duty of the ministers-at-home was to keep an eye on dissent and make sure everyone stayed in line. Think hard hat and shovel and road paving in Labrador if you want a classic example of the cabinet minister without a real portfolio.

Now undoubtedly some wag will point out that Jerome! is just angling to replace The Boss.  Shave the ‘stache, they will say and they are right.

But that doesn’t mean that the cabinet as a whole might not also be working along with Jerome to change their collective political fortunes.  While The Boss is busy tilting at hydro towers in New Brunswick, the guys who actually will be running for re-election in 2011 might be noticing they don’t have much time to shift the whole tone and approach of the administration.

Angry just doesn’t work all the time in politics, as any experienced politician and political scientist will tell you. People grow weary. And when the anger is directed inward, when people get smashed in the head for just having an opinion, it doesn’t take too long before people start to look for an alternative to the anger ball.

That’s one of the big lessons from last fall, if you really are clued in about provincial politics. Things started to shift.

And when the shift started, the local Tories seem to have decided to make a shift of their own.

Coming on like a warm, fuzzy blankie seems to be aimed at making sure that whatever alternative people move toward, it will still be blue.

Just a blue without all the anger in it.

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Dunderdale admin pours more cash into Corner Brook paper mill

On top of the millions in subsidies it has already provided to Corner Brook Pulp and Paper (Kruger), Kathy Dunderdale’s administration announced on Monday that it would pay $4.3 million over three years  to help workers at the mill upgrade their skills.

The only logical step next is for Kathy Dunderdale and her cabinet to give Kruger a receipt for the whole shooting match.

After all, taxpayers basically bought the mill piece by piece.

In related news, an economics professor at Memorial University thinks these sorts of subsidies don’t work:

[Michael] Wernerheim has high praise for the province's forest management strategy and for wanting to lay out a new path for an industry in decline, such as supporting smaller operations, like saw mills, and putting a greater focus on forests as ecosystems. 

But he found the government spends too much time, effort and money on continuing to support failing ways to protect jobs in the newsprint sector. 

"These short-term initiatives to protect jobs can retard the restructuring of the industry that we all want to see happening," he said.

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The Precipice Looms #nlpoli

Not surprisingly, Kruger issued an ultimatum on Tuesday to workers at its Corner Brook mill. CBC quoted the message from the company to the union in an online story:

"The first step to go forward will be to obtain a firm committment [sic] from employees by achieving a satisfactory agreement that will allow CBPPL to be competitive in the market," said the Kruger statement.

"Given the critical situation of the mill, this collective agreement will have to be reached by June 15 so that we can quickly move on to the next crucial step, which will be to submit the pension plan funding relief measures to a second vote and hopefully be able to apply them before the mill’s situation deteriorates any further."

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Update: Kruger machine closure and government subsidies

The official government news release came in the middle of Monday afternoon.

Turns out the provincial government has subsidized the newsprint industry to the tune of $30 million over just the past two years.

In the release, natural resources minister Kathy Dunderdale notes:

"We met with Kruger officials last week and told them very clearly that this was unacceptable. We reminded the company of the support it has received from this government. In the last two years, we have provided over $30 million in assistance to the pulp and paper industry in this province. The company has revisited its plans and moved ahead with today’s action that will see the shutdown of one machine. The impact of their business decision has been lessened because of the significant support this government has provided, and continues to provide, to this industry."

Hmmmm.

The last time issues like this came up, the provincial government wound up shelling out millions in subsidies. In 2006, it was an unspecified amount to deal with a cost problem with operations on the island. Later in 2006, it was a $10 million subsidy on power costs. A bit of simple math suggests that the earlier subsidy was upwards of $20 million but the actual figure was never made public; it could be there have been other subsidies that Dunderdale or her predecessor never announced publicly.

Subsidies to private industry are nothing new for the current administration. In a failed effort to salvage the Abitibi mill in Stephenville, the provincial government was prepared to offer the company upwards of $10-12 million annually to keep the mill open. Bond Papers concluded that subsidy actually worked out to more than the provincial government's tax take from Abitibi's Stephenville operation in certain circumstances.

No one should be surprised if there is a government decision between now and next spring, while the legislature is conveniently closed, to announce further subsidies for the pulp and paper industry in the province.

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The Decline of the Forest Empire #nlpoli

While an official with Corner Brook’s municipal government  understandably has to say wonderful things about the economy in the west coast city, a look at some numbers shows the city is feeling the effects of a larger problem in the province.

SRBP took a look at newsprint production levels and the value of newsprint exports from 2003 to 2012.  The numbers are all from the annual editions of the budget document called The Economy.

The picture is not pretty.

The Incendiary End Game in Corner Brook #nlpoli

As a rule, when a cabinet minister speaks publicly about a private sector company’s significant financial problems, things are not good.

Natural resources minister Jerome Kennedy told the world on Friday and Saturday that Corner Brook Pulp and Paper Limited had a heavy bank debt and an unfunded pension liability of about $80 million.  Kennedy said the mill that hasn’t made money since at least 2006.

Things are so bad that Kennedy  that he expected Joe Kruger was coming for a meeting to tell the provincial government he was closing the west coast paper mill.

So why was Kennedy gabbing about stuff he’d known about for some time but kept to himself?

Kruger announces two week shut-down

Kruger announced Friday that Corner Brook Pulp and Paper Limited - the only paper mill left in the province - will idle the entire Corner Brook facility for two weeks starting October 12.

The company cites the high dollar and weak newsprint prices as the reason for the shut-down.

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Having big guns helps

Paper maker Kruger may be getting additional financial help from the provincial government to keep its mill in Corner Brook operational.

There’s nothing new in this.  The provincial government has been subsidizing the forest industry for years.

What makes this a bit different is that the area has such strong representation in government.

No one is explaining to forestry workers why subsidies are bad, as fish minister Tom Hedderson did a few weeks ago when people wanted some cash to help out that troubled industry.

Having big guns helps.

Of course,  having those big guns a wee bit worried doesn’t hurt either.

You can tell they are worried about local public anxiety about the future of the Kruger operation when a news release appears advising that every provincial politician from the Corner Brook area will be traveling in a pack on Wednesday.

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Danny's Gang or the Friday Five O'Clock Follies

It's late on the Friday before a holiday weekend.

What better time for the provincial government to release some major announcements. Heck, a complete waste of time - like the new Danny-logo, hailed as the most stupendous event in the province's history, or words to that effect - can get huge amounts of government dollars.

But what warrants government sliding it out late in the week?

Try this stuff:

1. "Stephenville? Where's Stephenville?" said the Premier. The environment minister releases the Abitibi mill closure from environment assessment review. Only a few short years ago, Danny Williams was promising the mill would not close on his watch. It didn't. He meant the watch on his arm and there was never a plant on his watch. It couldn't. The mill it Stephenville is inanimate. There was no way it could close in on Danny's watch as long as he stayed out of the building.

2. Subsidizing industry, without saying it. The announcement - actually on Thursday - that government will be handing $10 million to Newfoundland and Labrador Hydro to pay for electricity that normally would have been used by the above-mentioned Abitibi mill.

The provincial government is effectively subsidizing the electricity rates to Kruger and to Abitibi's Grand Falls operation. He previously rejected an industrial energy subsidy to Fishery Products International.

Presumably, this subsidy will only be paid until the INCO smelter is built at Long Harbour. That is, when the Premier stops trying to hold up the construction.

During talks with Abitibi about the Stephenville mill, Williams committed to pay the company an energy subsidy up to a maximum of $12 million a year if the mill stayed open. That amount was actually larger than the tax revenue government gained from the mill's operation.

Expect that one of the natural resources minister's talking points notes that the $10 million subsidy is actually lower than the previous commitment to Abitibi and is being shared with the mill at Corner Brook run by Kruger.

A large double-double to the reporter who puts that to the minister an doesn't hear back the talking point given here or a close variation.

3. Fewer ferries operated by a private sector, not-for-profit. Transportation minister John Hickey released a long-awaited study into the province's ferry system.

The consultant recommended reducing the size of the fleet from 14 vessels to 12. It also recommended having the system run by a not-for-profit but privately incorporated entity like BC Ferries.

The vessel replacement portion of the plan is estimated at $80 - $90 million spread out over time.

The minister's new release contains very little factual information, incidentally, but it does have tons of partisan rhetoric. That's what you have to resort to when either:

a. You didn't read the study before you wrote the release; and/or,

b. You are politically afraid of the increased ferry rates resulting from the decision.

Expect the departmental talking points, drafted by Krysta Rudofsky's former sidekick, will play up the millions in new work for the Marystown Shipyard.

This way of spinning the message would be a political salve for the considerably more Marystown lost in the Premier's failed Hebron deal. People in Marystown will recall that they could have been doing Hebron and the ferries.

4. "You'd make more with FPI's wage cut offer." Not long after Danny Williams suggested workers at Fishery Products International go back to work for the wage cut being offered by the company, comes an announcement from fish minister Tom "Tovarisch" Rideout of a make-work project for former fishplant workers at Marystown. (Left: Our man in Moscow)

Rideout spent an unusually long-time last week gathering market intelligence by hanging out around fishmonger stalls in Moscow. Unusual, because while Rideout was on this hastily organized junket, his cabinet colleagues were approving the sale of the former FPI plant at Harbour Breton to Barry Group. Rideout had condemned the sale as illegal.

Rideout slags FPI in this release, but by now we all know that when the going gets tough, Tom will probably be on a flight to Moscow or Tahiti or God knows where. Anywhere but in cabinet as it decides to do the opposite of what Tom said.

Garnishee Tom’s pension first #nlpoli

Spendthrift finance minister Tom Marshall is willing to spend your money and mine to keep the Corner Brook paper mill afloat. As CBC tells us, Tom is keeping the options open:

"It can be a loan, it could be cash, it could guarantees but you know that we've made it clear we are not going to fund operational losses."

Well, you’ve got to admire a guy who is willing to spend public money to help out a bunch of people going through a hard time.

Coming or going?

Calamity Kathy Dunderdale, Danny Williams’ hand-picked choice for deputy premier, thinks the future of Corner Brook is built on manufacturing:

The minister said Corner Brook Pulp and Paper, despite its challenges, is a fundamental piece of the economy, thus has the support of the provincial government to help the company through these difficult times. She said both government and Kruger share a positive outlook of the mill’s future. Combined with that, the provincial government has created a new strategy to revitalize and diversify the forestry industry, particularly the integrated sawmill industry.

Quoted in the same article, finance minister Tom Marshall has another thought:

Marshall said it is important to create a knowledge-based economy in this area of the province to replace a declining manufacturing-based industry, something he contributed mainly to the competition of low cost producers around the world. He said the plan is to create an energy warehouse, utilizing the Labrador hydro and alternate sources such as wind, to offset that impact of lower labour costs of those competing manufacturers.

Now not only are these two ministers saying completely contradictory things at the same time, the finance minister is also proposing another nonsense.  Not only is Marshall’s future based on things that don’t exist – and likely won’t – but he is proposing to use cheap power as an offset to cheap labour costs overseas.

The Labrador hydro project is basically a fiction.

Wind power, and other forms of alternate energy, are basically a non-starter thanks to current government policy and the obsession with the Great White Whale.

As for giving away power, the last time that was tried, the people of the province wound up with Churchill Falls and the phosphorous plant at Long Harbour.  Given that the finance minister is advocating the use of public money for such a hare-brained scheme should cause a great many people to lose sleep.

Not the least of the bleary-eyed and stressed-out crew would be the people who believe the current administration is a Reform-based Conservative Party that wanted to “get our fiscal situation under control.”

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A List of Interesting Things #nlpoli

Follow this one for a second.

In 2005, Kathy Dunderdale – minister responsible for the Rural Secretariat  - announced a raft of appointments to the groups that advise government about rural economic development. One of the appointees is a guy named Ted Lewis from Croque.

In November 2005, Lewis went on a provincial government trade mission to Greenland.  he represented a company called Holson Forest Products.

In July 2008, industry minister Trevor Taylor announced $25,000 in provincial money for a company called Quality North to help it expand its markets for manufactured wood panels into places like Greenland and Iceland.  Quality North was formed in 2006 by three people, one of whom was Ted Lewis of Holson Forest Products

On August 12, 2009, Tom Hedderson - the provincial fisheries minister  - announced that Ted Lewis would take over as chair of the board that approves fish processing licenses.

On August 21, 2009,  then-natural resources minister Kathy Dunderdale announced that her department would be giving $10 million to Holson Forest Products  to set up a wood pellet plant in Roddickton.  The head of the company is a guy named Ted Lewis.

By 2011, a news story turned up in the Telegram saying that the company expected to start production in late March.  But, as events unfolded, the company has had trouble shipping pellets because of the cost of routing them through nearby ports. 

Liberal member of the House of Assembly Ed Joyce says he has been having trouble finding out what is happening with the provincial money. The Telegram even wrote an editorial about the problem, largely because one company official complained that the political inquiries were hurting the company.

But if you go to the official record of the House of Assembly, you will see that questions came up in the House on May 15.  On May 16, natural resources minister Jerome Kennedy added some details on the cash:

There was a $10 million investment which included a $7 million repayable loan, a $2 million non-repayable loan, and $1 million under the Green Fund.

Mr. Speaker, Holson has since come back looking for more money and we have indicated that there is only so far as a government that we can go. Beyond Roddickton, we also put $1 million in 2010 to assist harvesters in the Northern Peninsula, of which $830,000 has been spent as of March 31, 2012.

In response to another question in June, Kennedy added even more information.  What’s interesting is that Kennedy used the information to attack the local MHA who had asked a question about something else:

Let me tell you, Mr. Speaker, how this Third Party [the NDP] works. About three weeks ago, I got an e-mail from the Member for The Straits – White Bay North asking if I would meet with him and the owner of the Roddickton plant to discuss what was going on in Roddickton. I wrote him back, Mr. Speaker. I said if Mr. Lewis wishes to meet with me, he can contact me directly. I never heard back from Mr. Lewis.

So what the member opposite did, he tried to interject himself into the middle of the situation. He was obviously told to go away out of it, Mr. Speaker. I would suggest to him that if he is going to come forward with suggestions that he make sure that they are real and they are practical. What we are worried about is keeping this industry alive, keeping Kruger open and benefiting the people of this Province, Mr. Speaker.

And on August 13, 2012, Lewis wrote a letter to the Northern Pen explaining the current shutdown. Lewis said that the company needed to find a cheaper way to ship pellets overseas because the price for pellets dropped right after they got the cash commitment from the provincial government. Now that prices are recovering the lowered value of the Euro is causing problems.

The company is still working on the problem, apparently:

Any investment into either of these ports reduces the feasibility of pellet transportation. Roddickton harbour has the depth of water required and the required land base. With the right facility in Roddickton this and other industries can prosper. Thankfully there are plans moving forward to develop the infrastructure – no commitments yet.

Liberal fisheries critic Jim Bennett is only wondering whether or not the fisheries minister thinks that it’s alright to have the processing plant licensing board run by a guy whose company is on the hook to the province government for the better part of $10 million.

Here’s what Bennett told the Western Star:

"Is Lewis in a perceived conflict of interest in his job as chairperson of the Fish Processing Licensing Board, given that his company owes so much money to the government," Bennett questioned in a press release issued Monday.

Via telephone, Bennett said it was not an accusation, but that he would like the minister to review the appointment to determine whether or not there is a conflict.

Doesn’t that seem rather,  errmmm,  what is the best way to put it?

Oh yes.

Lame-assed.

That’s it, Bennett’s comments are lame-assed, weak, and laughable.

-srbp-