It's it amazing how the value of our dollar and economy in general is effected by good government and good people. People around the world now want to invest in Canada.

I think people are realizing that Canada is capable of recovering from fiscally irresponsible Prime Ministers and the damage they did to this country. The CBC and Toronto media loved that toxic little fug Trudeau but I never understood why. Everyone had big hopes for Secret Commissions Brian, but that fella was another disaster for Canada.

Having known Prime Minister Trudeau, I can answer the why for you Yama, he was a really charismatic, passionate about CANADA, fun kinda guy. Sure, his policies around economics damn near killed us, but Pierre had a way about him when it came to Canada as part of the world that was just plain amazing. Oh, and he had no problem telling you something you didn't want to hear if he felt it was true. Case in point, in the early 70s he was asked in a scrum by a reporter "Have you even smoked marijuana?". Pierre turned to him and said "Yes. So?" and that was the end of it. Had Clinton come clean right away about Lewinski, it would have gone away too.

A Trudeau type is needed in Canada right now. Let him be from the west for all I care since that seems to be the main reason the westerners do not like him. There were many other attributes he had which were great for Canada. He put this country on the international map.

The current government as the reason why the loonie is high... ha!

One of the reasons is the state of the economy which was turned around a long time before anyone herad of Harper and a long time before the current version of the COnservatives existed.

As they say, the loonie is being viewed as a petro currency. Anyone whose currency is dropping with the US$ and who would have invested in the loonie 3 months ago now enjoys a gain of about 15%. Not a bad return over such a short period. The question is, will anyone be cashing in.

It is not so much that this country is doing well. It is much more that the US is not doing well.

YamaDooPolCat your arguement is full of holes.

The Canadian dollar has hardly increased at all. The AMERICAN dollar has tanked.

Precisely realitysetsin....

There are too many people here who think the world is made up of their home country and the one to the south.

The Canuck $ has not changed appreaciably against other world currencies. It is the US$ that is having the problem. It is finally going where it should have gone for some time. Too many countries have been propping it up. The fact that China has refused to let their yuan float against the dollar or pegging it at a higher price a little at a time over a few years, is likely part of the major problem. The US owes them so much in trade inequity it is a major concern. They have been living on borrowed money and borrowed time. And the borrowing has been done to a large part in China.

So, the wood industry in Canada has not diversified its geographic market enough to be able to absorb the hit from the US. Those companies who have some dealings with Europe and Asia are not hit as hard. Thus, companies who sell pellets to Scandinavia, for sintance, should be okay from the demand side.

They may, however have some supply side problems with the availability of waste materials likely dropping substantially.

Saying the lumber industry is not geographically diversified enough may be true, but it's not like you can just ship for example to say Germany. Finland, Russia, Sweden etc all produce lumber too. In fact, some of those countries can ship to the eastern seaboard of the USA and beat BC on price, remember, they don't pay duty, but we do into the USA. Transportation is a big cost once you start going overseas.

The only reason pellets make sense being shipped to the Scandinavian countries is because of artificial market forces. IE subsidies provided by those countries to burn pellets rather than dirtier fuels.

That is why you haven't really seen commercial pellets take off here yet, there is no incentive in place, and even if there was would you invest in an energy generation plant that exists solely because of government policy that could change at any moment?

We are an exporting country. a 75c dollar is a good thing.

I agree a 75c dollar is a good thing for Canada. The problem is, it was too much of a good thing and, since it floats, it has just floated higher.

Are there any countries in the world, other than the USA which are not exporting countries or would like to be exporting countries, other than those who artificially close their borders?

We continue to export raw materials which have either no value added or very little value added.

Our internal investments are mainly headed in that direction. We invest far too little in the higher end product sector. If we would reinvest in some of those areas our productivity should rise as should our ability to compete on a world market in more modern technological enterprises.

If we were to make those investments, our dollar would likely not be quite as volatile as it presently is.

Owl says .."I agree a 75c dollar is a good thing for Canada."

Seems you also said our dollar has not changed against other currency's?

Therefore Harper has avoided what is harming the US buck, and that is a ballooning debt. The rich arrogant Trudeau was the first Prime Minster to really pile on the debt. The PM's that followed just wanted to be loved, and did this by buying votes with our money.

I never met Trudeau, just some of his creepy ministers, but I did know a fellow that said Margaret was good in bed.

Owl I am not sure I agree that our dollar is that volatile. In fact our dollar has gone DOWN against the Euro in the past six months by 4c.

I am not sure how we stop exporting these 'raw materials'. What is the answer?

Use our own wood to create furniture? Then ship it? The labor/shipping costs would make it uncompetitive.

These market cycles are actually good in the long run, yah some people are going to lose their jobs (maybe even me!) but look on the bright side, there is record low unemployment levels...The weak companies will possible be lost, ie P&T, Abitibi, Tembec, maybe even Canfor. The West Fraser's and Tolko's, and even small players like Dunkley who perform well will emerge even stronger, with more efficient, focused mills.

"Therefore Harper has avoided what is harming the US buck, and that is a ballooning debt"

Yes, he has done that over his short period in office, as has the government before him for some 8 years ... so you point is? He learns well???

My son works in health research. Teh research dollars under this government have taken a tremendous hit over that of the previous one. A stupid, move if you want to build your business and industry base. Just to name one element of the stupidity of this government when it comes to increasing Canada's competitive advantage. It certainly ain't in supporting workers working on an assembly line. These days that is better done elsewhere unless you want to peg the C$ against the Euro at say C$2.50 = 1 Euro.

I think Canada needs a carbon export tax of 20% (one up the softwood lumber tarrif)to eliminate the income tax and fuel a domestic economy not as dependent on the American economy, while at the same time costing the use of carbon to our Southern neighbours, thereby reducing the windfall profits of big international oil from the peak oil bonanza of charging mid east conflict prices for Canadian oil.

We shall see who is loyal to profit or to Canada. Use our own wood, or buy from the US now?

We were and always will be underdeveloped and underpopulated. I seem to have lived OK during my life in Canada dealing with it. Enough to eat and a warm bed. Nuthin' new.

"Use our own wood to create furniture? Then ship it? The labor/shipping costs would make it uncompetitive."

Kind of defeatist right from the start. I am sorry, but that is not the attitude which causes other countries and even other parts of this country to excel.

Wood furniture? Why wood? We have tons of gravel here too. Just because we have it in abundance does not mean we have to be tied to it.

So, high labour and shipping costs are in the way.

Palliser is the top furniture manufacturer in Canada - Winnipeg - employs 4,000
http://www.palliser.com/CompanyInfo.php
The reason we cannot do that or something like that here is?????

This is one in New Zealand which is one of their top furniture manufacturers.
http://www.designmobel.co.nz/index.html?cu=h4ru53yri00g2245ts41da45
Too modern or different for Canada?

Now for something completely different...

Food industry – clodhoppers …
http://www.clodhoppers.tv/about.html
The kind of product which can go into backhaul containers or even long haul flights.

And here is what I have been told by others who have international trade connections we should be looking seriously into and Winnipeg is one city that has it:
http://www.cangene.com/careers.htm one of Canada’s fastest growing companies and top 100 employers ….open up the “positions currently available” … just imagine how light that is to transport. The ratio of value to weight is a bit higher than for unimproved lumber.
Another one for good measure. http://www.biovail.com

With respect to currencies, competing against other countries' low labout costs, our high cost of living, and high transportation costs.

The Loonie as of today’s closing,
• the Loonie has gone up by 68% against the US$
• the Euro 55%
• the Swedish krona 54%
• the Indian rupee 24%
• the Japanese Yen 11.5%
• the Chinese yuan 11%

So, we are done when it comes to competing in manufacturing. If we are not careful, we could end up like the Arabian oil countries - run out of oil and there is no viable service or goods producing industry to take its place.
With its high labour cost, Germany produces $13,750 of exports per person living in that country. There is a net gain of $2,500/person when that is set against imports.

Sweden’s figures, with its high labour costs exports even more, $17,000/person but spends a bit more to buy overseas thus has a net figure of $2,400

Canada exports/produces $12,000 and has a net income of $1,350/person

Japan exports $4,800 and has a net income from exports of $630/person

China exports $740/person and has a net income from exports of $165/person

India exports $110/person and has a net income of $-55/person (negative)

France produces $7,600 for export but buys too much and has a deficit of $580/person

Now for the magic figure … the USA

Produces $3,400/person for export and purchases $2,780/person more than it exports.

A hint as to why the US$ is going down? A hint why the European currencies are staying high? A hint why the Asian currencies are not doing as great as the European currencies?

So, other than living off the fat of the land, so to speak, what do we need to do to ensure we are diversified and protected in the long run? I think those countries that have a high standard of living and produce quality products which are respected the world over by those who can afford high end products or might need high end industrial and business products to remain competitive are the countries we should be emulating. They manage quite well with high wages, high standards of living, and transportation costs which they have to cover to distribute their products throughout the world to those who need them or want them.

PS .... those rate increases of currencies against the US$ are over the past 5 years.

Palliser you say, is the biggest furniture maker with 4,000 employees? Um... That's not even going to cover a Medium size company like Pope and talbot. Your point is taken however... I guess my point is that it's nice to talk about 'value added' but it is a pretty limited opportunity. I *think* that I am not defeatist but more realist in what I am saying. Fact is we are really good at producing commodity lumber. The market is oversupplied... the dollar... MPB... the perfect storm.

This too shall pass.

"Use our own wood to create furniture? ."

that is not the attitude which causes other countries and even other parts of this country to excel.

Just because we have it in abundance does not mean we have to be tied to it."

Interesting and contradictory posts.
So, high labour and shipping costs are in the way. It is more than the physical challenges, it is the local business climate as well. People around PG have always had easy money, so the city has a soft underbelly open to poisoning of the business regulatory umbrella.
It is impossible to take seriously a desire to diversify the economy when you look at where the MDF plant is and the pellet plant opponents, for example.
What corporate idiot would look at PG for a smelter or forming plant?

I don't see PG getting past carving wood until we loose a few more people.

"What corporate idiot would look at PG for a smelter or forming plant? "

Well, for one we can start with the idiots who are looking to build something other than a smelter or forming plant. In fact, they are looking to start or expand a business such as the ones I identified above.

I gather you did not see those or for some reason or other they do not register in your mind, or you cannot project such businesses to other similar businesses.

Why on earth would someone build a smelter here? We have been through that process in the mid or late 70's. It did not go ahead for the same reason that a paper plant based on recycling paper products is not as viable here as it is in the GVRD or, better still, L.A.

"Palliser you say, is the biggest furniture maker with 4,000 employees? Um... That's not even going to cover a Medium size company like Pope and talbot."

I see ....

http://www.smartbrief.com/news/AGC/companyData.jsp?companyId=598

In 2006 they were listed as employing 2,373 employees. Do you know something we do not? That makes Palliser almost twice as big.

Not that size matters. That is the neat part about diversification. Replace one of those mega sawmills with 100 employees (and that is around how many they have today as opposed to 2 or 3 times as many just a few decades ago) with two or three businesses which hire a total of 100 people.

You can even talk about counting the whole network of workers in the small businesses in silviculture, harvesting and transportation as well as consulting tht support the sawmill on an ongoing basis andmake sure you compare that to the network or supporting businesses for the replacement business and do the count that way.

You know, Canada and other countries are not made up of a majority of primary manufacturing plants. They are made up of value added plants and service facilities in the secondary and tertiary sectors. That is why industrial statistics have shown a drop in agriculture, resource extraction, primary manufacturing industry and a considerable rise in the service industry.

It is a fact of the changing economy which has, over the past 100 years, made a considerable move from eeking out a living on the farm to producing and selling products and services which make the economic world go around today.

http://www.forestnet.com/archives/April_01/mill_profile_1.htm
http://www.hydro.mb.ca/pop/pop_profile_palliser.pdf

BTW, I picked Palliser out of a hat of companies. Now I am realizing how interesting following the story of this firm is. From other things I have been reading, I would not be surprised if they will be using the new Rupert Port for container traffic going both ways.

Some of the writings speak about the importance of the Pacific Gateway to their operations and having that gateway as being consistent in its ability to keep the goods moving.

All these good ideas and you missed the one thats can destroy us all and thats the "stock market".

It really dosent matter what we do as long as our economy is driven by profits rather the deversifying our manufacturing we will end up in the dumper. A few years back Canfor made a profit of 460 million. Where did it go? It was paid out to share holders.

Had the money been reinvested in secondary industry maybe things would not be as tought for them today.

Cheers

Okay, but the only trouble with that argument is that Tolko is a private company still aren't they?