BC'S low-profile forestry sector still an economic powerhouse

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A new study shows that while it has declined in overall importance, it is still the largest manufacturer in the province, adding over $31 billion a year to the provincial economy and 145,800 jobs

At Port Metro Vancouver’s Lynnterm terminal on the North Shore, long trailers loaded with BC pulp are wheeled alongside the breakbulk carrier AAL Singapore to be hauled aboard by giant on-deck cranes.

The paper-white bales of pulp disappear into the ship’s hold in loads of five tonnes at a time, one after the other in quick succession. The Singapore is part of the pulse of the B.C. economy, says Iain Adam, assistant manager for terminal operator Western Stevedoring. The terminal beats to a steady rhythm of manufactured goods shipped in, and resources – largely forest products – shipped out.

Lynnterm is proof that despite the prolonged U.S. housing industry downturn and the loss of half the province’s pine forests to the mountain pine beetle, the forestry sector is back, pumping revenues and jobs into the B.C. economy. Now a report by the international consulting firm MNP released Feb. 5 and endorsed by the Resource Works Society, details for the first time how deeply engrained the industry has become within the rest of the province’s economic and social fabric. And it’s doing it with a renewable resource.



Click here to download the BC Forestry Industry
Economic Impact Study

The B.C. Forest Industry Economic Impact Study shows that the forest sector has declined in overall importance as the B.C. economy has grown, but points out that despite its lesser role, it is still the largest manufacturer in the province, adding over $31 billion a year to the provincial economy and 145,800 jobs. That’s more than three times as many jobs as were created during the seven-year build-up to the Vancouver Olympic Games.

It’s the economic driver of 40 per cent of the province’s communities, supporting the people who live in them.

As well, the report has gathered statistical information about growing forest enterprises beyond sawmilling and pulp; from the industry’s bioenergy contribution – it’s the largest bioenergy producer in North America – to its role in the economic health of Port Metro Vancouver. Forest products accounted for 20 per cent of all container shipments leaving Burrard Inlet in 2013, according to the report.

James Gorman, chief executive officer at the Council of Forest Industries – one of four industry associations that commissioned the report – said the report shows forest companies and British Columbians where the industry now stands in terms of economic importance.

“We felt that as an industry it was important that we take stock again, recognizing that the industry is changing and morphing. It’s important that we have a clear understanding and that British Columbians have a clear understanding about the importance of the forest industry and its contribution to the province of British Columbia.”

 

The report has also been endorsed by the non-profit Resource Works Society, which is raising public awareness on the link between resource industries and individual well-being.

One out of every four manufacturing jobs in B.C. is in the forest sector, according to the report. In the Interior, the ratio is even higher: One of of every two manufacturing jobs is in forestry. The report covers all aspects of the industry and all corners of the province.

It shows that in 2013, the industry had revenues of $15.7 billion. The $31.4 billion figure is arrived at by adding direct and indirect outputs. The total impact on the GDP was $12.4 billion. Of the 145,800 jobs, 63,500 were direct, and 82,300 were created through linkages with other industries. Federal, provincial and municipal governments benefit to the tune of $2.5 billion in taxes.

Those are the broad-stroke figures. The report also drills down in six specific sectors: manufacturing, valued at $10.8 billion, secondary manufacturing, valued at $2 billion, forest management at $4 billion, log, chip and lumber wholesalers at $463 million, innovation at $219 million and silviculture at $100 million.

MNP also details the impact of each sector. Innovation, for example, added $219 million in total economic output, employing 1,400 people directly and 700 people who work in other sectors and provide research to the industry. Agencies from FP Innovations, with $90 million in funding, and the University of B.C., at $11 million, to the B.C. Bioenergy Network, at $1.4 million, are contributing economic value, along with new ideas and products.

At Lynnterm, people like Adam, whose daily lives are immersed in pulp and lumber shipments, intuitively know the role forest products play in the economy. Adam is surrounding by rows of packaged lumber and bales of pulp every day. The Singapore disgorged a cargo of steel piping destined for the energy sector and giant Korean-made tires used in the mining sector. The pulp it took on board came from West Fraser’s Quesnel mill. The Singpore’s next stop will be Squamish, where it will take on pulp from Canfor’s Prince George mills before heading West to Asia. It’s an interplay of global trade that takes place every day throughout the province, linking the wealth of forests with every corner of the world and sustaining the flow of foreign goods into B.C.

“Not everyone understands the gives-and-takes of the economy,” said Gorman. “If you are Canadian Tire and you are importing goods from China to sell in your store, to a great extent, you are negotiating a price that is predicated on that container going back full. And more often than not, that container is full of forest products.”

 

 


A key link between the products made in the Interior and the cranes that line Port Metro Vancouver’s export terminals is at the foot of No. 8 Road in Richmond, where Lulu Island meets the Fraser River. Dwarfed by row after row of packaged lumber looming above him, Bob Hayes, Canfor Corp’s transportation vice president, explains the link. Behind him is a warehouse half a kilometre long packed to the rooftop with bales of pulp. 

Hayes is at a transload centre where Canfor’s forest products arrive by truck and rail from throughout the province. They are transferred into containers for the short trip to the Vancouver waterfront or to Deltaport, where they are loaded aboard vessels for the long trip to Asia. 

Massive forklifts whip around the site in a highly organized pattern loading and unloading, loading and unloading thousands of packages of lumber and bales of pulp.  It’s organized chaos, Hayes said of the logistics involved in getting B.C.’s forest wealth to distant markets. 

Forest products exports keep transportation costs lower within the province, said Hayes. The trucks that load up with bales of pulp from Canfor’s Prince George mills usually arrive from the coast full of produce for local supermarkets. Going back with pulp helps keep grocery costs down for northern residents. 

The transportation link between forest resources and our consumer needs is a key factor in the port’s competitiveness, said Doug Mills, senior account representative in trade development at Port Metro Vancouver. He said that historically, Vancouver was the back-haul leg for shipments. Containers that arrived full of goods often left empty. Exports and imports are almost equal now, he said, and the No. 1 containerized ex-port is forest products.The MNP study also links the industry with the social fabric of the province as well as looking at revenues and expenditures, something Interfor vice-president and chief forester Ric Slaco, a 35-year veteran of the sector, said shows the changing face of the industry. 

Slaco shepherded Interfor though the contentious War in the Woods on the coast and has been with the industry long enough to see events come full circle. The forest sector, he said, is ideally suited to deliver long-term economic opportunity to First Nations through connecting resource management with the aspirations of First Nations interests. It’s also built around a sustainable resource that’s renewable, carbon neutral, and has applications as biofuel. Further, he said, architects are turning to it for tall wood buildings and innovators are developing new uses for wood-based material. In terms of economic linkages, he said capital invested by the industry is spent in B.C, buying B.C. goods and hiring B.C. professionals and workers. 

When Interfor built a $100 million mill at Adams Lake in 2008, $98 million of that was spent in B.C. For a $50 million upgrade at Grand Forks in 2013, 95 per cent of the spending was in B.C. and it will be the same at a $30 million upgrade at Castlegar to be completed this year. “That’s money spent throughout British Columbia for engineering companies, design companies, equipment companies, construction companies and service companies,” Slaco said.“To me, the industry represents the future for the province.”


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