Outlook for Newsprint (Canada)

Abstract

M A Y FUNCTION TODAY, I assume, is to help your members assess the future of the Canadian newsprint industry. The best way to begin, I believe, is to lay before you certain facts, both of yesterday and today, about the financial, market, and growth positions of my industry. Perhaps the most important fact is that half the world's newsprint supply comes from Canada, and half the world's supply is consumed in the United States. Consequently, the future of the newsprint industry in Canada depends very largely on events in the United States, where the domestic mills provide only 20% of the supply, with almost all the remainder coming from Canadian mills. These mills have had varying fortunes. Not so long ago, one could buy Canadian paper stocks for a song. In 1946, for instance, leading issues were selling at around four to seven times earnings. This was well below the average of most industrials at that time, despite the fact that industry prices and profits were rising, paper and pulp were in short supply, and the general business climate was very healthy.