In Newfoundland and Labrador since its beginning giveaways were a big part of economic development. The list of enterprises that have been built with government support is endless. The losses over the years are no less significant when you count the cost of our natural resource depletion, environmental destruction and the resources and benefits that have been transferred federally. The human and societal costs are even more substantial.
It continues today and is part of Corner Brook’s plight. The city has clung tenaciously to an old worn out and redundant paper mill and continued to invest their future in its operation.
We forget that the mill’s real financial wealth, while it created jobs for the city, and taxation benefits locally and provincially, was siphoned off to the southern United States and Britain where it built a global empire for Bowater’s.
Once they had exhausted the real wealth creation potential of the mill and that of much of the forest resource, they abandoned it; and gave it away, as there was little left to take.
As a member of the local advisory committee, appointed by the provincial government to provide input into the process of finding an alternate operator for the mill, the words of Joe Kruger (Jr.), at the time of their takeover, still resonate with me. He suggested that the mill, its workforce and operations and all of its appendages: the power plant; timber and land rights; and whatever else Bowater’s owned, were a gift.
In fact, because of its low purchase price they were suspect, and had been told that there were gremlins in the mill. He went on to say that if there were such gremlins they would quickly find them.
Kruger, with this gift in hand, managed to tap into whatever residual potential that lay in the machinery, the remaining forest resources, the skilled workforce and its hydro profits. They then augmented this with resources and grants from governments.
This though had a cost locally, as the workforce was depleted, any real maintenance or upkeep was kept to a minimum and the forest resources were plundered relentlessly.
What has to be understood is that Kruger and their ilk are only developers of their own financial interests. In reality they are salvagers, eking out the last vestiges of wealth from whatever they happen to capture, while draining the life blood of natural resources, machinery and manpower. When there is nothing left; they leave.
Many still consider this mill as the economic engine that drives the city. In its heyday, this was true. The mill was an economic dynamo for the city and province; now it is only a shadow.
The same scenario is playing out in other provinces besides Newfoundland and this is not the first time in history.
In Cape Breton literally billions were poured into preserving a steel mill, abandoned by its original developers in the 1960s. It eventually closed in 2000, after costing governments a king’s ransom and causing untold destruction in human and societal terms, not to mention the ecological toxic waste that may never be removed.
Economically, as several economists are suggesting, continuing such operations in the face of obvious economic change makes no sense. It is pouring in “good money after bad”.
In the case of the Corner Brook mill its paper machines are almost 100 years old, albeit they have been added too and modified over time. Papers markets are in sharpe decline globally, as paper is being replaced by Internet Technology, and low cost producers are emerging in developing countries.
There was a huge and loud tremor in the Humber area in 1984 when Bowater’s abandoned Corner Brook. But, with the takeover by Kruger, the tremor subsided and all became quiet as most figured the mill was now safe.
Now that this same tremor has returned, it is time for people to take notice and realize that the safety felt at that time was but a myth, an illusion of security which brought short term gain for eventual long term pain.
It appears at the 11th hour, shutdown has once again been forestalled; but, at what cost.
The eventual closure of the mill will bring forward these realities. These include environmental cleanup (estimated to be in excess of a $500 million in Grand Falls), a shortfall impacting pension incomes and the challenge of economic regeneration that has been long delayed.
Perhaps then people will put aside these myths and illusions of growing economies by giving up our resources to others with little in return. It is long past time for another approach to economic development, other than giveaways.
There has to be the recognition that natural resources belong to all the people. Thus the benefits of their development have to be taken into account and balanced with their needs when deals are made with developers.
It is time to drop the shackles of historically flawed approaches to development in favour of those more balanced towards people, so as to ensure that the long term needs of children and grandchildren will be met.
The reality of the world requires economies where growth comes from within led by a competent, educated and resilient human resource.
