| Socred ferry policy calle

VICTORIA — Provincial aed PRS Peay to use ederal subsidies to improve

freight services along the

B.C. coast will increase chances of a strike in-the forest industry this sum- mer, according to Graham Lea, MLA for Prince Rupert.

“The premier either is incredibly ignorant or else he is cynical y manipulating events behind the scenes to force 2 destructive con- trontation in the woods this

Weak

British Columbia Forest Products Limited reported earnings for the first quarter of 1977 of $6.8 million or 88 cents. per common share with sales of $101 million as compared withearnings of $6.1 million or 79 cents per share and sales of $81.4 million for the same period of 1976.

The weaker Canadian .

dollar had the effect of in- creasing the company’s 1977 net sales for the period by $5 million on a comparable

basis. The exchange gain accounted for _a 22 cent per share increase in after lax earnings compared to a reduction of earnings of 10 cents per share for the same period last year.

The details were included .

in remarks by BCFP Chairman Ian Barclay and President K.P. Benson at the company’s 3ist An- nual General Meeting heid in Vancouver, Thursday, April 21.

Barclay said that without the gain on exchange, the company’s first quarter results would have been ‘Wisappointing’. He said « a significant increase in demand and modest price improvement for lumber experienced by the com- pany (during the quarter)

was more than offset by underway including several . Increased costs afid reduced* Hedin BY Oe Heealsoin«

earnings from market pulp due to lower demand.”

Barclay added that it may be tempting, mediate future to look upon the devaluation of the Canadian dollar as the solution to our problems. “But as our experience in the last decade ... has shown ... currency changes are not a rmanent solution to pro lems which arise from ‘undamental weaknesses that need correcting.”

He said comparisons of 1977 results to’ the last

uarter of 1976 were

isappointing. Sales dropped from the $117.7 million level and earnings were also down from the $8.9 million or $1,16per Common share earned in that fered: The Canadian and U.S. dollar were virtually at par during the fourth period of 1976, “While lumber ‘and plywood sales remained comparatively constant, there was a substantial decrease in market pulp

roduction and sales, and a esser decrease. for newsprint,’ he said.

The shareholders were told that the lower demand for pulp and newsprint experienced at the end of 1976 has continued into 1977. Excessive pulp inventory build-ups necessitated production curtailments at the company’s pulp mills as sales to capacity ratios for the quarter reached only 76 percent, —

Barclay said that newsprint sales which started the year saw im- provements by the end of the quarter in the western U.S. and domestic markets.

He said that lumber sales were affected by severe winter. weather in some places of North America

in the im-°

year,” Lea recently.

“My guess is that he is

. doing it consciously because

he’s finding out that even his own party is critical of his economic mismanagement. So he hopes to distract at- _tention from his bungling by encouraging a labour- management war in our biggest industry.’

Lea said the premier’s siatement to coastal mayors recently that despite an $8 million federal subsidy he

charged:

LEA BLASTS GOVERNMENT

“won't subsidize any freight at all”, sounded like the insensitivity of Prime Minister Trudeau's _ notorious ‘‘why should’ sell your wheat?” insult to prairie grain farmers. ‘But if that callous remark only showed Ben- nett’s disregard of the problems of the coast and horth, it would only be another insult which citizens from our area have come to expect from him,” said Lea. Unfortunately, it gives

dollar helps

quarter, however improved housing starts in February and March in the provided stronger sales. He said offshore lumber sales decreased since the beginning of the year and plywood demand _ in Canada, the U.K. and on ’ the continent has been slow.

Chairman Jan -A. Barclay indicated that the U.S. pulp and paper market should reflect steady economic recovery but there are only small signs of improvement in BCFP’s major offshore markets of Europe and Japan. Pulp sales are ex- pected to improve gradually inthe third quarter, with the pace quickéring toward the end of the year.

He said previously noted newsprint sales im- provements should offset the lagging demand ex- pected in offshore areas during the second and third quarters of this year.

Barclay said that in- creased U.S. housing starts, which may exceed 1.9 million this year and im- proved mart gage availability favor well for lumber sales.

Company president, Kenneth P. Benson recapped the company’s capital projects presently

dicated that the 1977 capital program will: see a_con- tinuation of major pollution control and cost reduction projects with total spending expected to reach $34 million. . “Two new major projects were announced, one on Vancouver Island at Crofton and the second at the

company’s Hammond cedar

sawmill.

‘The Island project is a large central dry land log sorting area near Crofton which will process logs from

ten of the company’s coastal .

logging divisions.

“When completed in

1978," said Mr. Benson,

“almost 100 percent of BCFP’s coastal log production will be processed over dry land sorting grounds and bundled, This should virtually eliminate log escapement from BCFP operations on the coast, with savings in fibre costs and an ‘improvement in mill operations for better log preparation.”

The B.C. forest industry's serious surplus problems also brought comment from BCFP’s president. He in- dicated that chip piles at company . mills have reached their maximums andit has become necessary to start a disposal program which will be expensive for the company and outside chip suppliers. He noted that although chip exports are being made wherever possible, alarge surplus still exists and the situation is expected to continue until the pulp market regains its strength. ; ‘The pulp companies cannot fully protect the independent sawmill operators from the market risks for chips. When the pulp market is weak, then the chip market will also be

during the first part of the

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business risks an ‘in- dependent sawmill operator

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the clue to something far worse and much wider in significance which could seriously affect the entire province.”

He pointed out that the coastal delegation had reminded the premier that foodstuffs and other com- modities have increased in price by as much as 230 percent in some coastal communities and logging camps since the federal-

rovincial discussions egan for revamping

profit has to consider before building a sawmill.”

le

ann a

coastal freight services. “Surely even the premier

understands what such 7 ee

enormous increases in the cost-of-living for thousands of logging families is going to do to their militancy right at the time that forest in- dustry negogiations have begun?

“Can he Be 50 stupid as to.

not understand the impact of his refusal to use the federal subsidy for im- proving the freight service to roll back some of that enormous cost-of-living ump?

“T don’t think so. I think that despite all his pious words about wanting labour

ce, he and his govern- ment desperately are trying to encourage an all-out

———

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GRAHAM LEA labour-management war to distract attention from their own economic bungling,” said Lea.

“and all the time we have nothing but thundering silence from the forest

——<

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THE HERALD, Tuesday, May 3, 1977, PAGE Alt

company chiefs despite the obvious stake of their companies in this coastal

freight decision: “TT wonder if that executive silence was

bought by the cabinet's refusal last month to make any noise whatsoever to the AIB about the MacMillan Bloedel president’s 16 percent pay raise to $250,000 a year?”

“Es it just coincidence that this government simultaneously’ will do nothing to stop obscene wage increases for the company bosses or stop massive cost-of-living in- creases for logging ‘families? “Is that kind of government policy designed to help or harm labour- management relations in

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our most vital industry at a time of crucially-important contract negotiations?"

Lea noted that Bennett scheduled a press con- ference to announce the $8 million federal subsidy, but refused ta see reporters or issue a statement after the meeting with coastal mayors.

“those are the actions of an arrogant man who thinks he can manipulate and ignore the press — and therefore the public — as he pleases.”

‘It could come only from a man who had already displayed the partisan vindictiveness against the

ublic interest that we saw in doubled ferry rates, tripled ICBC rates and enormous tax increases.”'

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