Canada's forest industry: An overview
By the numbers
Companies of all sizes make up Canada’s forest industry. They range from local sawmills and small-scale logging operators with a handful of employees to multi-national companies with thousands of employees. Whatever their size, all of these companies supply essential products and provide employment for Canadians.
In 2011, the industry provided direct employment for about 233 900 Canadians. Jobs in the forest industry tend to be highly skilled and well paid. With the addition of related employment such as in construction, engineering and transportation, the forest sector accounts for almost 600 000 direct and indirect jobs across the country.
There are three main subsectors:
- Solid wood product manufacturing – The companies in this area produced 51.9 million cubic metres of softwood lumber, 1.5 million cubic metres of hardwood lumber and 6.2 million cubic metres of structural panels in 2011. Secondary manufacturing of solid wood products, including engineered wood products, log homes, furniture, pallets, shingles and millwork (such as for doors and windows), is becoming increasingly important.
- Pulp and paper product manufacturing – The companies in this area produced 18.9 million tonnes of wood pulp, 4.4 million tonnes of newsprint and 3.8 million tonnes of printing and writing paper in 2011. Other products include packaging and tissue paper, although these products represent a relatively small portion of Canada’s pulp and paper manufacturing.
- Forestry and logging – The companies in the area are responsible for field operations and harvesting of timber, including felling and hauling it to the mill. In 2011, forestry and logging contributed $5.3 billion to Canada’s GDP, 22% of the sector’s contribution.
Today, other new and innovative products, materials and services are also being produced in Canada’s forest sector. These include new building materials, biofuels that can substitute for fossil fuels, and biochemicals that can be used to produce bio-based pharmaceuticals, biodegradable plastics, personal care products and industrial chemicals.
|Forest sector area||Contribution to GDP, 2011 ($ billion)|
|Solid wood product manufacturing||$9.92|
|Pulp and paper product manufacturing||$8.53|
|Forestry and logging||$5.27|
Snapshot of Canada’s forest product markets
- Canada is the second largest exporter of primary forest products in the world, behind the U.S., and the fourth largest when all forest products are considered.
- Canada is the largest exporter of wood pulp, newsprint and softwood lumber, and is the fourth largest exporter of wood panels.
- The U.S. is the destination for 65% of Canadian forest product exports.
- China is an increasingly important market for Canadian forest products, especially pulp and softwood lumber.
The need for transformation
Forest product markets are cyclical, experiencing significant ups and downs over the economic cycle. This constant state of shifting circumstances creates both challenges and opportunities.
In recent years, Canada’s forest industry has undergone an especially deep cyclical decline, coupled with structural changes in world markets. The industry has faced:
- a strengthening Canadian dollar, making Canadian products pricier and therefore less attractive to foreign purchasers
- the collapse of the housing construction market in the U.S.
- a substantial and permanent decline in North American demand for newsprint
In response to these challenges, the forest industry has put into action a transformative strategy of innovation and market development. Key aspects of the strategy include:
- developing new wood-fibre-based products and processes
- expanding into new and traditional markets
- capitalizing on environmental stewardship credentials.
Another important component of this transformation has been the sector’s forging of new partnerships—with manufacturers, chemical companies, First Nations communities and other stakeholder groups. These relationships are key in helping the forest sector enhance community involvement in forest management, make more effective use of forest lands, and develop new products and markets for the future.
The forest industry value chain
The forest industry constantly strives to maximize benefits along the whole production “value chain”.
The first link in the chain involves surveying, data analysis and other ways of understanding what is in the forest: what kinds of trees are available, what age and quality they are, where they are located and so on. Next comes the harvesting and delivery of logs—making sure that the right trees go to the mill best suited to converting them into the desired end product. Then comes the secondary manufacturing process: converting lumber or pulp into many different kinds of high value products, from furniture to chemicals. The final link in the chain is marketing the products.
The aim throughout this complex chain is to maximize efficiencies that will reduce costs and create incremental value at every link.
1 In constant 2002 dollars. Source: Statistics Canada.