Published On: Tuesday, 26 September 2017

New Study Confirms Forestry a Cornerstone of BC’s Economy

New Study Confirms Forestry a Cornerstone of BC’s Economy
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.

BC - An economic study recently 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.

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.

Additional information and statistics on the report are available at the following link.