Quesnel Lobbies on Behalf of Forest Sector
Quesnel, B.C. – Quesnel City Council is lobbying B.C. Premier Christy Clark on behalf of the community’s forest sector.
Council approved Mayor Bob Simpson’s letter to the premier this week in support of an 18 month old request by West Fraser for PST relief for Quesnel River Pulp and for the premier to take immediate steps to reduce energy costs at both Quesnel River Pulp and Westpine MDF.
Simpson says the requests would make those companies more viable and provide a better incentive for energy efficiency investments in those plants.
He says it’s a conversation that’s been going on in Quesnel for some time and is hoping Premier Clark will provide some relief in time for the 2016 provincial budget.
“So we give the certainty needed to attract investment into our community and keep those mills operating.”
He says increases in Hydro rates aren’t helping either, noting capital “needs to have a signal from the provincial government that partnership programs with BC Hydro are going to be attractive.”
Simpson says it’s been difficult to get any attention on these issues because of the Province’s preoccupation with the LNG industry.
“The government has been busy trying to give birth to the LNG industry, holds a summer session and passes legislation that will bind future governments into tax regime preferential treatment for an industry that doesn’t yet exist, doesn’t employ anybody, doesn’t pay any taxes” he says.
“Meanwhile we have industries that have outstanding requests of government that would allow them to invest in actual physical plants that have been here, employ people and that pay taxes
Comments
Bob Simpson is asking for corporate welfare?
With the rising electrical costs because of mainly 65 billion in contracts for expensive IPP power and inefficient bird slicing wind power industry will shut down and leave BC as is happening in Ontario.
So what do you of the welfare to wind power, IPP’s and the green blob?
I hope this is a joke. Welfare for west fraser? Where is all the money they didn’t spend on stumpage over the past 9 years?
Too bad they don’t teach economics in school.
West Fraser is a big company that has one objective – make money at everything it does and return that money to it’s shareholders via dividends – shareholders being mostly pension plans.
So when something it does, stops making money, they usually ask government to give them relief before they just stop doing it. So if these mill are running cash negative, they will close them. And to the government, this is a bad outcome, because now they for sure won’t collect any sales tax, for sure will not collect any taxes from wages, and they will start paying out EI, welfare, etc.
A lot of us don’t understand government really is a shareholder of all these big companies because of the taxes they collect not just on profits, but wages, consumption costs etc. That’s why the Feds and Quebec will bail out bombardier, because they collect about a billion a year in taxes on wages from that company.
The trick is knowing when they are bluffing and just trying to get something out of government. Usually the way to figure it out, is to say no, and wait and see if the mill closes – then of course, it’s too late.
A typical left wing error is the belief a company will not walk away from a multi billion dollar investment. As far as a company is concerned, if a mill brings in a billion in revenue, and costs 1.1 billion to earn that revenue, their multi billion dollar investment is worthless, and it’ll cost 100 million a year from other ventures just to keep it running – so if government doesn’t want to kick in, the mill is gone.
That’s a sad, but true, fact, ski51. The other thing not generally looked at is that for most large companies their profits as a per centage of their sales is actually FALLING, even when the dollar amount reported may still be rising. This forces them to try to get ever bigger, but with that very bigness comes a certain loss of the ‘real’ kind of efficiency they had when they were smaller.
Well said, ski51 & socredible. Spot on.
metalman.
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