Government Bail-Out Not The Answer For Harmac

In response to some individuals suggesting that the government should buy the recently-closed Harmac pulp mill, I submitted the following letter to the Nanaimo Daily News. Except for leaving out the specific reference to the individual who had written the original letter which I was responding to and the part about why Prince Rupert was 'saved' and not Gold River, they ran it pretty much the way I wrote it (surprise!).

Dear Editor,
If Jacqueline Leitch believes that the purchase of the Harmac pulp operation by the provincial government (Government should buy what private sector ruins, Nanaimo Daily News, May 20/08) will set that failed private operation on the path to profitability, she might want to consider that our provincial government 'rescued' the Skeena Cellulose operation in Prince Rupert twice, once in the early 70's and again in the late 90's, spending over 450 million of our dollars in the process. Soon after the government of the day 'saved' the Skeena operation the second time, the Gold River Pulp mill was closed down due to a pulp glut - the difference being that the Deputy Premier at the time lived in Prince Rupert, not Gold River. Skeena eventually went bankrupt (the government had the good sense not to try and bail it out a third time!), was sold (we recovered only $6 million) and has not been in operation for the last 9 years.
No, as disruptive to the individuals involved and harsh as it may seem, we need to let the market forces and private initiative work this out or we will very likely, once again, become subjected to the very expensive 'law of unintended consequences', the recent success of the potash industry notwithstanding. As far as the private sector 'ruining' Harmac, her statement that "when the problems with a business are so obviously internal and not external, it is time to give the business of infrastructure back to the people..." shows either a deep knowledge of the operation or a lack of understanding what the external effects like the collapse of the U. S. housing market and a 50% increase in the Cdn. vs. the U.S. dollar had on the business.

Sincerely,
Hans J. Larsen
Lantzville, B. C.