One must take care when assuming that by buying a sawmill PLT will automatically enjoy lower cost lumber. Too many bankrupt operations tell us that intermediary "tax" increases are the cause of diminished earnings in this industry. In an era where labour costs are contained--yea, even reduced--you might ask why sawmill profits have moved steadily down at a time when lumber has become increasingly expensive?
You will get the answer from the insidious role played by various orders of government. They have all added higher levies to timber blocks, cutting permits, shipping permits, parts, fuel, and maintenance costs, GST, PST, stumpage, and the list goes on.... and on.
Insidious is the nature of these levies because they are at once destructive (of employment) and inflationary (in the finished prices). The hard-working lumberman is squeezed between a splinter and a prank! Is the public so little aware of the reason why our prosperity (and investment earnings) is suffering so much erosion over the past three decades that they are prepared to perpetuate it again and again? It seems our rule makers know only how to add burdens and not how to remove taxes or abolish a fees.
It is a real possibility that when PLT bought their sawmill operation, they bought a liability. Now IF they got it to assure supply, that is one thing; but, if it was bought for profit, it may be part of the problem for the stock's decline. Whichever is the case, I say blame neither PLT nor the sawmill. Look only to the damage done by the repetitive action of "I love to tax" politicians. Call it Liberal-Tory disease, if you like, because it is both endemic and debilitating. It continues to grow no matter the Party. Jobs, like profit, are being levied away. A few chosen industries, of course, are immunized by political largess--PLT is not so lucky; nor you the investor! If PLT succeeds in spite of all, it certainly deserves a salute! I am not overly optimistic, but I will take the risk, anyhow. |
