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Forestry is a cornerstone of B.C. economy: study

Sep. 25, 2017 – An economic study released today 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.

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.

The study confirmed the importance of B.C.’s forest industry to families and communities across B.C. In 2016, the forest industry generated one out of every 17 jobs in the province, or over 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.

“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,” said Susan Yurkovich, president and CEO of the BC Council of Forest Industries. “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.”

The forest sector continues to be foundational to the B.C. economy generating $33 billion in output and $12.9 billion in GDP. Additionally, the sector contributed $4.1 billion in payments to municipal, provincial and federal governments from forest industry operations. 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. This revenue is key to providing essential public services to British Columbians such as education, health care and infrastructure.

Renewable 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 our 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 over 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.

 “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,” said Rick Jeffery, president and CEO of the 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.”

One of the reasons why B.C. wood products are in such demand is that B.C. is a world leader in sustainable forestry. The industry plants three trees for every tree harvested on average, and less than one per cent of the timber land base is harvested each year. B.C.’s forest companies continue to innovate, and make ongoing investments in the communities in which they operate to benefit workers, families, communities and the province.

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 10 years. Over the past 10 years, the industry invested on average $1.5 billion annually in both strategic capital and maintenance.

“In the southern Interior, our economic health depends on a vibrant forest sector,” said Ken Kalesnikoff, chair of the Interior Lumber Manufacturers’ Association. “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.”

While forestry is a key driver of the provincial economy, the industry is facing some significant challenges including the ongoing softwood lumber trade dispute with the United States, rising costs and the devastating impacts on fibre supply from both this summer’s wildfires and the Mountain Pine Beetle infestation. The industry, government and communities will need to continue to work together to face these challenges to ensure that forestry continues to be an economic engine for our province in the decades to come.