This $0.8 milliondeterioration in relative performance was the result of unfavourableEBITDA due to market downtime at all of our facilities, offset partiallyby improved income tax recovery.Net sales for the first quarter of 2009 decreased by $24.6 millioncompared to net sales of $180.7 million in the first quarter of 2008. Thedecrease was due primarily to the decline in the pulp and lumber markets.The loss of $16.7 million in first quarter of 2009 was an improvement of$2.4 million compared to the loss of $19.1 million in the first quarterof 2008. The paperoperations' EBITDA for the first quarter of 2009 was a decline of $8.1million from the fourth quarter 2008 EBITDA due to market downtime takenat both of our paper facilities. The first quarter 2009 paper operations'EBITDA improved by $8.5 million from the negative EBITDA of the firstquarter of 2008 due to improved pricing for paper, fibre and energy andthe weakened Canadian dollar, partially offset by market downtime.Pulp operations generated negative EBITDA of $8.2 million in the firstquarter of 2009 compared to negative EBITDA of $8.7 million in the fourthquarter of 2008. EBITDA improved by $0.5 million due an unplannedmaintenance outage costing $3.0 million in the fourth quarter, partiallyoffset by market downtime and lower production due to the deterioratingpulp market.In the first quarter of 2009, EBITDA from pulp operations declined by$7.3 million compared to the $0.9 million negative EBITDA in the firstquarter of 2008. The decrease reflected a $187 per tonne reduction inrealized pricing and market-related downtime as a result of weakened pulpmarkets which were partially offset by lower energy costs and the impactof a weaker Canadian dollar.Lumber operations' EBITDA loss of $4.1 million improved by $0.3 millioncompared to the fourth quarter of 2008 as a result of market curtailmentand reduced market pricing. The lumber operations' EBITDA was essentiallythe same as the first quarter of 2008.INTERNATIONAL FINANCIAL REPORTING STANDARDSThe Accounting Standards Board ("AcSB") confirmed in February 2008 thatInternational Financial Reporting Standards ("IFRS") will replaceCanadian GAAP for publicly accountable enterprises for financial periodsbeginning on and after January 1, 2011.
The Company intends to adopt onJanuary 1, 2011.Impact of Adoption of IFRSIFRS are premised on a conceptual framework similar to Canadian GAAP.However, significant differences exist in certain matters of recognition,measurement and disclosure. As the Company continues to evaluate theimpact of adoption of IFRS on its processes and accounting policies, wewill provide updated disclosure where appropriate. While the adoption ofIFRS will not have a material impact on the reported cash flows of theCompany, it is expected to have a material impact on the Company'sconsolidated balance sheet and statement of income.Property, Plant and EquipmentUnder International Accounting Standard ("IAS") 16 Property, Plant andEquipment, an entity is required to account for each class of property,plant and equipment using either the cost model or the revaluation model.The cost model is generally consistent with Canadian GAAP where an itemof property, plant and equipment is carried at its original cost, lessaccumulated depreciation and accumulated impairment losses. Under therevaluation model, each item of property, plant and equipment is revaluedon a periodic basis and carried at its revalued amount, less anyaccumulated depreciation and accumulated impairment losses.ImpairmentsUnder Canadian GAAP, for assets other than financial assets, a write-downto estimated fair value is recognized if the estimated undiscountedfuture cash flows from an asset or group of assets are less than theircarrying value. Under IAS 36, Impairment of Assets, assets must bewritten down to their recoverable amount, (determined as the higher of a)the estimated fair value less costs to sell or b) value in use), if therecoverable amount is less than the carrying value. Unlike Canadian GAAP,IAS 36 requires the reversal of an impairment loss where the recoverableamount exceeds the previously written down carrying value.
EmployeeBenefits PlansUnder Canadian GAAP, actuarial gains and losses on employee benefit plansare deferred and amortized over the expected average remaining servicelife (EARSL) of the employee group. In addition, accrued pension benefitobligations and plan assets for defined benefit pension plans arerequired to be disclosed in the notes to the consolidated financialstatements. Under IAS 19, Employee Benefits, on transition to IFRS, anentity may elect to recognize the obligation in excess of plan assets onthe balance sheet as a liability, recognizing unamortized actuarial gainsor losses directly in equity. Future actuarial gains and losses could berecorded as a direct charge to equity or amortized over EARSL.Share-Based PaymentThe Company issues stock-based awards in the form of stock options thatvest evenly over a five-year period.