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March 28, 2006
(Natural Resources)

The following statement was issued today by Ed Byrne, Minister of Natural Resources. It was also read in the House of Assembly:

I am pleased to rise in the House today to inform members and the people of the province, particularly those on the Northern Peninsula, that Corner Brook Pulp and Paper has agreed to reverse their decision to not purchase pulpwood from in that area this year.

Officials in my department and myself as minister, in consultation with the MHAs for the area, immediately entered into discussions with Corner Brook Pulp and Paper on Wednesday and Thursday of last week. We clearly impressed upon the company that if fundamental changes are required in the industry, it needs to be done over the longer term. This decision, if not reversed, would have effectively put an entire industry into a tailspin overnight.

Myself and the MHAs for the Straits & White Bay North and St. Barbe met with about 25 representatives of the logging industry in Plum Point on the Northern Peninsula on Sunday to inform them of the outcome of government�s discussions with the company. Government and the loggers in the area know the challenges facing the pulp and paper industry and the necessity for a long-term plan for moving the industry forward.

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.

Government has also reached an agreement to purchase the Main River Bridge from the company for the benefit of the people in the area and for recreational and tourism development. The company no longer has use for the bridge and planned on relocating it. The cost of the bridge is $300,000 and funding will come from savings in this year�s spray program as a result of lower than projected costs relating to hemlock looper.

The decision by Corner Brook Pulp and Paper on Tuesday of last week was devastating for loggers in Forest Management Districts 17 and 18. It would have potentially resulted in the loss of 250 jobs.

The company originally made the decision because of the surplus of pulpwood in the Maritimes, which is available at a lower price. This surplus is a result of the closure of the Stephenville mill and UPI Mill in New Brunswick, and the labour dispute at STORA Industries in Nova Scotia. The forestry industry throughout Canada is re-positioning itself to reflect higher energy costs and fibre costs, the impact of the strong Canadian dollar and declining North American demand for newsprint.

Today I am announcing that we are responding to these challenges by undertaking a complete review of the forest industry in Newfoundland. This initiative will assess the current state and structure of the forest industry and provide a path for a new and sustainable forest industry that is responsive to the global economy. This initiative will occur over the next six to eight months and will include a public consultation process.

Additionally, we will immediately complete an assessment of the short-term competitiveness issues that face the forest industry today. We will evaluate management programs such as silviculture, forest protection, road construction, inventory and other programs where the residents of the province benefit to share the costs on management.

The forest industry provides the most jobs and the most returns for rural Newfoundland and Labrador and we have committed to working in consultation with the logging industry to identify what needs to happen to move this industry forward in the long term.

2006 03 28                          1:50 p.m.

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