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The Evolution of Global Paper Industry 1800¬–2050 pp 101–133Cite as

An Accomplished History, An Uncertain Future: Canada’s Pulp and Paper Industry Since the Early 1800s

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Part of the book series: World Forests ((WFSE,volume 17))

Abstract

Canada’s status as a “New World” country with a relatively small population and abundant natural resources dictated that the pulp and paper industry arrived late, enjoyed rapid growth that propelled it into a prolonged period of international ascendancy, and then suffered a steep downturn in its fortunes, one from which its escape is hardly assured. The chapter will trace the industry’s development from the early 1800s until today, focusing in particular on corporate strategy, industry structure and the role of the government.

Several groups and persons should be recognized for the valuable contributions they made to realize this project. These include my home institution, Laurentian University (LU), which supported my research through a grant from its research fund (LURF). Sylvie Lafortune, LU’s Government Information and Data Librarian, was extremely helpful in responding to my requests for statistics. The Pulp and Paper Products Council in Montreal graciously made its historical records available to me. Several researchers, namely Eric Harding, Cody Cacciotti, and Aaron St. Pierre, helped me collect and interpret the relevant data. To all of them, I owe a debt of gratitude.

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Notes

  1. 1.

    Upper Canada was renamed Canada West in 1840, but for simplicity, it will be referred to as Upper Canada for the period preceding Canada’s creation in 1867.

  2. 2.

    Lower Canada was renamed Canada East in 1840, but for simplicity, it will be referred to as Lower Canada for the period preceding Canada’s creation in 1867.

  3. 3.

    These years also saw a fleeting attempt to establish the industry in British Columbia, specifically in Alberni on Vancouver Island (Carruthers 1947; PPC 2004).

  4. 4.

    Canadian economic historians disagree over the significance that should be attached to the elimination of the American tariff on newsprint in terms of propelling the explosive expansion of the Canadian industry during the early 1900s. The evidence indicates that the end to the duty in the USA was not the crucial factor in driving the industry’s growth (Bladen 1958; Dick 1982; Fell 1934; Guthrie 1941), although a handful of academics argue that it was (Nelles 1974; Reich 1926).

  5. 5.

    A few, propitiously located firms circumvented American duties on non-newsprint grades of paper by establishing capacity in the USA. Fraser Companies Limited was a Canadian-controlled firm with operations based in New Brunswick, and by the end of the First World War, it was one of North America’s largest sulphite pulp manufacturers. In the mid-1920s, it constructed a fine paper mill in Madawaska, Maine (USA), just across the Saint John River from its largest pulp mill in Edmundston, New Brunswick (Canada). Thereafter, it evaded the tariff in the United States on fine paper by feeding its Madawaska mill with pulp produced at its plant in Edmundston (Parenteau 1994).

  6. 6.

    One notable exception was the Belgo-Canadian Paper Company, which was organized in the early 1900s by the former Belgian Consul-General for Canada and a group of Belgian banks on whose behalf he acted and built a newsprint and pulp mill in Shawinigan Falls, Quebec (Carruthers 1947).

  7. 7.

    Also during the First World War, the Canadian government seized control of the domestic marketing of newsprint and fixed the price at which it could be sold. These measures severely limited the producers’ ability to sell in the USA, a fetter against which the industry railed (Canada – SPHC 1919).

  8. 8.

    Two historians hold diametric views on the first attempt, named the Canadian Newsprint Company and formed in 1927 (Ellis 1948; Kuhlberg 2002).

  9. 9.

    The Canadian pulp and paper industry used several strategies to increase its supply of raw fibre ­during this period. First, many vertically integrated with lumber producers, either formally (i.e. by diversifying their operations) or informally (i.e. by entering into contracts with nearby saw mills). Both approaches secured wood chips, which gradually began to replace roundwood as the industry’s raw material. Second, pulp and paper producers responded to the lack of interest in working in the forest after the Second World War by adopting the latest timber-harvesting technology in their woodlands. Doing so greatly enhanced their ability to access – and the efficiency with which – they procured raw fibre. The shift to transporting the wood from the bush to the mills by truck (and sometimes rail) instead of water also opened the door to year-round operations (Radforth 1987; Silversides 1997).

  10. 10.

    The Ontario government even protected the NAC from prosecution by American authorities in 1947 when, immediately after the FBI had subpoenaed its members to produce their business records, it prohibited any firm in the province from responding to such requests (Ontario – SO 1947).

  11. 11.

    Abitibi, for instance, which obsessively directed much of its cash flow to paying down its debt after it emerged from receivership in 1946, generated dividends by the early 1950s that were never less than $.50/share (Matthias 1976).

  12. 12.

    Fine papermakers were also able to collude until they were prosecuted and found guilty in the early 1950s (Whitney 1958).

  13. 13.

    By 1990, the average Canadian newsprint machine represented only 57% of the capacity of an average Finnish machine and 79% of the average American machine (Roach 1994).

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Authors and Affiliations

  1. History Department, Laurentian University, Sudbury, ON, Canada

    Mark Kuhlberg

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  1. Mark Kuhlberg
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Correspondence to Mark Kuhlberg .

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  1. , Department of History and Ethnology, University of Jyväskylä, P.O. Box 35, Jyväskylä, 40014, Finland

    Juha-Antti Lamberg

  2. , Department of History and Ethnology, University of Jyväskylä, P.O. Box 35, Jyväskylä, 40014, Finland

    Jari Ojala

  3. Aalto University School of Science, P.O. Box 11000, Aalto, 00076, Finland

    Mirva Peltoniemi

  4. , Department of History and Ethnology, University of Jyväskylä, P.O. Box 35, Jyväskylä, 40014, Finland

    Timo Särkkä

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Kuhlberg, M. (2012). An Accomplished History, An Uncertain Future: Canada’s Pulp and Paper Industry Since the Early 1800s. In: Lamberg, JA., Ojala, J., Peltoniemi, M., Särkkä, T. (eds) The Evolution of Global Paper Industry 1800¬–2050. World Forests, vol 17. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-5431-7_5

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