BRITISH COLUMBIA – A new economic impact study released today by the BC Council of Forest Industries (COFI) confirms BC’s forestry industry is a vital part of the province’s economy, generating billions in wages and government revenues, sustaining about 49 thousand direct forestry jobs and contributing $17.4 billion in GDP in 2022.
“This Study demonstrates that the BC forest industry is one of the main drivers of British Columbia’s economic base, providing outsized benefits to living standards and government revenue by generating employment, value-added activity, and exports,” said Kurt Niquidet, Vice President and Chief Economist at COFI.
“Coming out of the pandemic, 2022 was a highly volatile year for prices, not only for lumber but for many other commodities as well”, explained Niquidet “Forest product markets today are different and so are other economic dynamics in the sector. The industry has been challenged by rapidly changing market conditions, high costs, natural disturbances like fire and insects, and the impact of new public policies. Timber harvesting on provincial crown land has declined by about 30% since 2021.”
To capture the impact of these changes the Study also provides some projections for 2023 that point to a loss of jobs and other benefits delivered by the sector. “We need to find ways to stabilize fibre supply and build a more predictable and sustainable path forward for the sector”, said Niquidet.
He said the forest industry in BC is in a period of transition, but the long-term outlook is strong for the full range of renewable forest products BC is capable of producing. “Locally and globally the demand for wood products for more affordable and climate resilient housing is growing, and so is the demand for low-carbon and bio-based materials. But in the short term we are faced with a critical shortage of timber for BC mills. Left unchecked, reduced access to fibre supply will drive further losses in the investment, infrastructure and workforce needed to meet those new opportunities.”
The Study measured the economic impact of the forest industry’s ongoing operations, employment and capital spending related to forestry and logging, wood product manufacturing, and pulp and paper manufacturing across the province using data primarily sourced from Statistics Canada. To ensure the accuracy and reliability of the Study, independent external validation was provided by BDO Canada LLP. A copy of the full Technical Report can be found at cofi.org
Among the Study’s key findings were:
· BC’s forest sector has significantly higher paying salaries, averaging over $106,000 per year in total compensation (compared to the BC average of $73,000);
· BC’s forest industry contributes $17.4 billion annually to BC’s GDP;
· BC’s forest industry sustains close to 100,000 good jobs for British Columbians, including 48,725 direct forestry jobs and an additional 51,143 indirect and induced jobs;
· BC’s forest industry contributes $9.1 billion in wages, salaries and benefits;
· BC’s forest industry generates $6.6 billion in government revenue
· BC’s forest industry sustains one out of every 28 jobs in BC;
· BC’s forest industry sustains one out of every six manufacturing jobs in BC;
· 25% per cent of all forest industry jobs are based in the Lower Mainland;
· In 2022, forest products were BC’s number two export, representing 24% of all merchandise exports by value; and
· From 2013 to 2022, BC’s forest industry invested approximately $15.8 billion in construction, machinery, equipment, repairs and maintenance, through local BC companies and suppliers.
“It is important to recognize that the direct and indirect economic benefits from the forest sector are linked to annual timber harvest levels”, said Niquidet. “That’s why industry, government, First Nations, local communities and workers need to come together to address current uncertainty over fibre supply and attract the investment required to build on BC’s strategic advantage in the conservation and sustainable management of this renewable resource.”
Key findings from the report will be discussed at the 2024 COFI Convention, with a panel on the Economic & Investment Outlook for the Forest sector planned for Thursday, April 11. Kurt Niquidet will present the outcomes of the Economic Impact Study and moderate a panel discussion that aims to provide insight into the economic trajectory of BC forest industry.
About the BC Council of Forest Industries COFI represents companies that manage forest tenures in British Columbia and produce manufactured wood products, pulp and paper, biofuels, and bioenergy. COFI members are proud to work in BC’s forest industry – a sector that supports regional economies and good jobs for British Columbians, is recognized as a global leader in forest management practices and for producing the low-carbon products the world wants and needs. All COFI members share a commitment to a future based on Indigenous reconciliation, sustainability, innovative product development, and decarbonization. COFI also provides Quality Control and overseas market development services to a broader group of companies.
