Federal Court - Christian Aboriginal Infrastructure Developments ...

Page: 344
projections are not possible for 2011 to 2020 (could only be based on
long range price trends), it can be assumed, based on long term
industry supply/demand (price) trends, that the company could
achieve similar EBITDA and EBIT earnings from 2011 to 2020 as
projected for 2001 to 2010.
(Emphasis in original)
[1299] In his oral evidence he said it was difficult to project those earnings due to the cyclical
nature of the lumber industry. However, in cross-examination he testified as follows, at pages 1905
2010 FC 495 (CanLII)
to 1907:
A. It’s very ugly today. And lumber prices are probably 50
percent lower than they were only two years ago. So as a result,
companies that were making a lot of money two years ago are now
losing a lot of money.
But the concept I was referring to here is that, even though
as a consulting company, we were very uncomfortable developing
a ten-year forecast showing year by year all the detail of what the
lumber selling price would be, what would be the value for the
generation of electricity. We do believe that the lumber industry
over the last 50 years has worked in a very cyclical manner. In
other words, the lumber market is constantly moving up or down.
It’s never flat. And that movement of up and down is cyclical in
nature and, if you look at about a 50-year time span, you will see
that almost every ten years there is a peak and there is a bottom
within ten-year periods, which is related to U.S. housing starts. So
what I’m conveying here is that the ten years which I did analyze
and project show a span of time in which the – a very typical span
of time in the lumber industry where the market went to a peak in
2005, has come to a valley in 2008, and is expected to improve in
2009 and then 2010 and gradually build up strength again into the
early 2011, 2012.
So, what I’m maintaining, or what we’re maintaining, is
that we expect the period 2011 to 2020 to contain a similar cycle
peak and valley that we experienced from 2001 to 2010.
Q. So, to be clear, sir, while the schedule that we’ll refer to in
a few minutes projects losses or profits, however you choose to
characterize them, through to the end of 2010, what you are saying
in this particular paragraph is that, if you take it to the next tenyear
period beyond that, then that is a further consideration.