Friday, 1 August 2008

unrealistic hope from MacIsaac

From the Chronicle Herald:
Nova Scotia’s economic development minister says the best way to recoup the province’s investment in a failed Cape Breton wallboard plant is to get the facility back up and running.

Federal Gypsum filed for bankruptcy last Friday and owes around $32 million to more than 90 creditors, including an $8 million loan from the province.

Angus MacIsaac says while market problems that led to the closure of the Point Tupper plant still exist, the downturn in the U.S. housing market and the high Canadian dollar "are not permanent conditions." (emphasis mine)

MacIsaac wasn’t specific, but says the province will do whatever it can to ensure the facility becomes operational again, something he says he’s confident can happen.

The US housing boom is over. Finished. The era of suburban developments that require cheap oil in order to be livable is also coming to an end.

We have to make investment decisions based on new realities, not failed business models. It worries me that our Deputy Premier, who is responsible for provincial economic development, is operating under the assumption that the global financial meltdown is just a temporary blip. Things are much more serious than that.

Our government should not gamble taxpayer dollars on a bet that the US housing market will recover.