OTTAWA — A new report says Canada's paper products industry will likely lose $400 million this year, the third consecutive year the sector has been in the red.
The Conference Board of Canada's report cites the rapid appreciation of the Canadian dollar as a key factor for the industry's continuing woes.
But the economic research group says better times are ahead, forecasting a modest profit of about $6 million in 2008, with profits reaching about $1 billion annually starting in 2010.
Production of paper products has been falling since 2004 and is expected to decline through 2008 mostly because of the increased use of computers and the Internet, which limits North American demand for some grades of paper, the report states.
Offsetting the declining usage is increasing demand from expanding economies, such as China . But that will be insufficient to fully recover the loss of exports to the U.S. and weak domestic consumption.