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Economic study measures impact of forest industry in B.C.

September 26, 2017

By: The Working Forest Staff

VANCOUVER – An economic study released by the B.C. forest industry confirms that the sector continues to be a cornerstone of the provincial economy and one of the largest employers across the province.

In 2016, the forest industry generated one out of every 17 jobs in the province, or 140,000 total jobs, generating a total of $8.6 billion in wages to workers. Of the total jobs, the industry employs 60,000 people directly with an additional 81,000 indirect and induced jobs generated from forest sector activity. Notably, across the province, 140 communities also rely on the forest industry and are considered forest dependent through their mills, community forests, or significant logging operations.

Produced by PwC, the study assessed the economic impact of the B.C. forest industry’s ongoing operations, employment and capital spending across the province related to forestry and logging, wood product manufacturing and paper manufacturing.

 

 

“This economic report confirms that the forest sector continues to be a cornerstone of the provincial economy and one of the largest employers in the province. B.C.’s forest sector, and the families and communities across our province who are a part of it, contribute immeasurably to our quality of life in British Columbia. While our industry is facing a number of challenges, we are continuing to invest, innovate and diversify both our products and our markets to ensure that we can continue to be an economic engine in the province for generations to come,” said Susan Yurkovich, president and CEO, BC Council of Forest Industries.

The forest sector continues to be important to the B.C. economy, generating $33 billion in output and $12.9 billion in GDP. The sector contributed $4.1 billion in payments to municipal, provincial and federal governments from forest industry operations, PwC concludes. That figure includes $1.4 billion to the federal government, almost $200 million in taxes to municipal governments, and $2.6 billion to the B.C. provincial government in the form of provincial taxes, stumpage, payments to BC Hydro, annual rent, logging taxes and fees.

B.C. wood products are in demand around the world, with B.C.’s forest industry exporting $13.7 billion worth of forest products in 2016, accounting for 34 per cent of all provincial exports. The B.C. forest industry has also worked hard alongside provincial and federal governments to diversify its markets overseas, with China now accounting for 24 per cent of B.C.’s forest product exports.

As a major exporter, the forest industry is an important consumer of B.C. transportation infrastructure services such as ports, warehousing, railways, trucking, towing, barging and associated support services, with forest products representing more than 21 per cent of all traffic through the Port of Vancouver, 46 per cent of the container traffic through the Port of Prince Rupert, and nearly 11 per cent of total rail traffic across Western Canada, according to the PwC report.

The global forest industry is very capital-intensive, and B.C.’s industry is no different. B.C.’s forest industry invested $650 million in new capital expenditures in 2016, not including maintenance capital, and is expected to continue that level of investment annually over the next five to ten years, the report states. Over the past ten years, the industry invested on average $1.5 billion annually in both strategic capital and maintenance.

“The latest PwC report shows us, once again, that the health of B.C.’s forest sector is integral to the well-being of hundreds of thousands of families living in cities and communities throughout our province,” says Rick Jeffery, president and CEO, Coast Forest Products Association. “From Vancouver and Victoria, to Haida Gwaii and Prince George, forestry is part of the story of our beginnings, it’s woven into our everyday lives, and is an important part of a sustainable and prosperous future for B.C.”

“In the southern Interior,” says Ken Kalesnikoff of the Interior Lumber Manufacturers’ Association, “our economic health depends on a vibrant forest sector. All parts of the industry – from manufacturers to suppliers to service providers and more – play a crucial role in creating well-paying, family-supporting jobs in every part of our region. This report clearly reinforces that.”

To download a copy of the British Columbia’s Forest Industry and the B.C. Economy in 2016 visit www.cofi.org.

More facts:

  • B.C. has vast forest resources with roughly 60 per cent of its land base (55 million hectares) being productive forest land, providing rich, diverse, and abundant wood fibre. These forests contain approximately 11 billion cubic meters of standing timber.
  • Less than one per cent of B.C. forest land is harvested annually, and 259 million seedlings were planted in B.C. in 2016 alone.
  • 140,728 jobs in B.C. rely on the B.C. forest sector. A total of 59,900 direct jobs support a further 41,471 indirect jobs and 39,357 induced jobs.
  • Approximately 47 per cent of all B.C. forest industry direct employment was in the lumber sector, 32 per cent in logging and the remaining 21 per cent in pulp and paper, panels and veneer sectors.
  • B.C.’s forest industry offers relatively high labor compensation compared to other industries in the province, with higher average weekly earnings than many goods producing industries in B.C.
  • Wood product manufacturing constituted the largest exports segment within the forest industry, accounting for 66 per cent ($9.1 billion) of forest industry exports, followed by paper manufacturing (including pulp) at 28 per cent ($3.8 billion), and forestry and logging at 6 per cent ($800 million).
  • Driven largely by lumber shipments for its residential construction industry, the United States was the top destination for B.C. forest exports in 2016, accounting for 53 per cent of the industry’s exports. China represented the second export destination, capturing 24 per cent of the industry’s exports, followed by Japan at 9 per cent.

 

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