Over 140,000 total jobs, $12.9 billion in GDP drive economy in communities across the province
VANCOUVER, B.C. – 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.
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% of all traffic through the Port of Vancouver, 46% of the container traffic through the Port of Prince Rupert, and nearly 11% of total rail traffic across Western Canada.
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 percent 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 ten years. Over the past ten years, the industry invested on average $1.5 billion annually in both strategic capital and maintenance.
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.
Quotes:
“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.”
Susan Yurkovich, President & CEO, BC Council of Forest Industries
“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. 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.”
Rick Jeffery, President & CEO, Coast Forest Products Association
“In the southern Interior, 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.”
Ken Kalesnikoff, Chair, Interior Lumber Manufacturers’ Association
(end)
Download a copy of the study, British Columbia’s Forest Industry and the B.C. Economy in 2016 here.
Contacts:
Greg Descantes
Pace Group
greg@pacegroup.com
604-646-3564
Mina Laudan
BC Council of Forest Industries
Laudan@cofi.org
778-990-0701
Susan Gagon
Coast Forest Products Assn.
Gagnon@coastforest.org
604-891-1240
BACKGROUNDER
PWC REPORT: BRITISH COLUMBIA’S FOREST INDUSTRY AND THE B.C. ECONOMY IN 2016
Highlights
- The B.C. forest industry generated $33 billion in output and $12.9 billion in GDP to the province.
- In 2016, the sector generated and supported more than 140,000 total jobs (59,900 direct and an additional 80,828 indirect and induced jobs) in the province. That amounts to forestry generating one out of every 17 jobs in the province and total labour income of $8.6 billion.
- The payments of municipal, provincial and federal taxes resulting from the industry’s operating activities, as well as other payments to the provincial government, totalled $4.1 billion.
- 140 communities in B.C. rely on the forest industry and are considered forest dependent through mills, community forests, or significant logging operations.
- B.C. has vast forest resources with roughly 60% 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.
- The B.C. forest sector is a world leader in sustainable forest management with less than 1% of B.C. forest land harvested annually, and 259 million seedlings planted in B.C. in 2016 alone.
- 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. Over the ten years to 2015, the industry invested on average $1.5 billion annually in both strategic capital and maintenance.
- The B.C. forest sector is an important consumer of transportation services such as ports, warehousing, railways, trucking, towing, barging and associated support services. In 2016, forest products represented over 21% of all traffic through the Port of Vancouver, 46% of the container traffic through the Port of Prince Rupert, and nearly 11% of total rail traffic (by tonnage) across Western Canada.
Government Revenues
- B.C.’s forest industry contributes approximately $4.1 billion to government revenues. The contributions include: $1.4 billion to the federal government, $198 million in taxes to municipal governments, and $2.6 billion to the B.C. provincial government in the form of provincial taxes ($1.12 billion), stumpage ($747 million), payments to B.C. Hydro ($607 million) and annual rent, logging taxes and fees in lieu of manufacture ($86 million).
Employment
- 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.
- Direct employment by sector (Total 59,900):
Coast Logging 9,488 Interior Logging 9,912
Coast Lumber 6,397 Interior Lumber 21,419
Pulp and Paper 8,500 Panels & Veneer 4,184
- Approximately 47% of all B.C. forest industry direct employment was in the lumber sector, 32% in logging and the remaining 21% in pulp and paper, panels and veneer sectors.
- Approximately 25% of all B.C. manufacturing jobs in 2016 came from the manufacturing sectors related to the forest industry that includes wood products and paper manufacturing segments.
- B.C.’s forest industry offers relatively high labour compensation compared to other industries in the province, with higher average weekly earnings than many goods producing industries in B.C.
Export and Trade
- The B.C. forest industry exports a significant share of its production outside of Canada.
In 2016, the value of the total forest industry exports was $13.7 billion, representing 34% of all B.C. exports. B.C. forestry products are exported to more than 100 countries worldwide. - Wood product manufacturing constituted the largest exports segment within the forest industry, accounting for 66% ($9.1 billion) of forest industry exports, followed by paper manufacturing (including pulp) at 28% ($3.8 billion), and forestry and logging at 6%
($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% of the industry’s exports. China represented the second export destination, capturing 24% of the industry’s exports, followed by Japan at 9%.
- B.C. forest product producers continue to seek and find new sources of demand across the globe with Korea, Taiwan and India growing as trade partners.