Sectoral Profile
Forestry
Region of Western Canada and Territories
2014-2016
EXECUTIVE SUMMARY
The West is the primary region for forestry, logging and support activities in Canada. Nearly 50% of the nation’s
forestry jobs are located in western Canada, with BC alone accounting for 40%. Over the past decade, the
forestry sector has encountered significant struggles, leading to a drastic decline in logging and wood and
paper manufacturing. Nevertheless, while these industries have contracted, they have all shown signs of
rebounding in recent years. While a return to peak employment levels is unlikely, forestry and wood
manufacturing are poised for stability over the medium term.
KEY DRIVERS

Following the 2008 US housing market crash, forestry, logging and wood manufacturing has shown
signs of rebounding, although employment in these industries is unlikely to return to peak levels
anytime soon.

The emergence of the Chinese market as a large consumer of western Canadian raw logs and wood
products has led to a diversification of Canada’s forest product exports.

A rebounding US housing market, a sustainable level of demand from China, and a declining loonie
bode well for Canada’s forest industries over the near to medium term.

Despite robust demand for western Canada’s forest products, supply constraints brought on by the
mountain pine beetle epidemic will limit growth in this sector over the medium to long term.
Furthermore, advancements in technology may further limit employment growth in wood
manufacturing.
Forestry – Region of Western Canada and the Territories – 2014-2016
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BACKGROUND
Canada’s forest sector has historically been a significant contributor to the national economy, with
employment activities occurring from coast to coast. In actuality, the sector is comprised of numerous
segments, including logging. Other forestry-related activities, including wood product manufacturing and pulp
and paper manufacturing, are categorised under the manufacturing industry. Forestry and logging activities are
the most rudimentary elements across this sector, revolving around the raw natural resources that are spun off
to create secondary products such as lumber, pulp and paper.
There are significant contributions made to forestry and logging in all Canadian provinces. However, the
industry is small in the territories because a large portion of the north is above the tree line1. British Columbia
has the largest forestry industry in Canada. In fact, BC accounted for nearly 40% of all employment in Canada’s
forestry and logging industry in 2014. Alberta also held a notable portion of the nation’s forestry and logging
employment in 2014 at 6%, the fifth highest among the provinces. Employment opportunities in forestry and
logging were far less pronounced in Saskatchewan and Manitoba, which held a 2.1% and 1.4% share of national
employment respectively2.
Canada’s forest sector is largely driven by demand for wood products from the United States. Specifically, there
is a strong correlation between the strength of the US housing market and the health of the Canadian forest
sector. For instance, when the US housing market crashed during the recession, employment in forestry dipped
to a 10-year low. With the US housing market improving, housing starts south of the border are expected to
increase by 16% this year3, which bodes well for BC’s lumber exports.
The impact of the US housing crash was mitigated by the emergence of China as a destination market for
Canada’s forest products. In particular, BC played a vital role in developing new Chinese markets for the
province’s raw logs and pine-beetle damaged timber4. Between 2008 and 2010, wood exports from BC to China
increased by nearly 300%5.
Although BC’s timber supply has been negatively impacted by the mountain pine beetle, these supply
constraints could boost the price for the province’s forest products on the open market, resulting in greater
revenues. Furthermore, the decline of the Canadian dollar relative to the US dollar makes Canada’s wood
exports more attractive to international buyers. China’s economy is expected to grow by more than 7% in
2015, which bodes well for BC’s forestry sector6.
Forestry – Region of Western Canada and the Territories – 2014-2016
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Forestry/Wood Products’ Provincial % Share of
Employment and GDP, 2003 vs. 2013
Employment
In 2014, nearly half of Canada’s forestry jobs were concentrated in the western provinces. Overall,
employment in forestry, logging and support activities reached 23,900 in western Canada during 2014, an
increase of 7.7% from the previous year. All employment gains between 2013 and 2014 were in BC (+1,700),
while employment in the other three western provinces was unchanged during this time. In fact, employment
levels in this industry have been stagnant in Manitoba and Saskatchewan since 2009. Meanwhile, BC has
recorded impressive employment growth of 29.2% over the past five years in forestry, logging and support
activities. Conversely, Alberta has experienced a decline of 6.5% over the same period.
2014 Employment Trends
Between 2013 and 2014, employment in forestry, logging and support services:

Grew 9.7% in BC;

Was unchanged in Alberta, Saskatchewan and Manitoba.
Forestry – Region of Western Canada and the Territories – 2014-2016
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INDUSTRY TRENDS
Employment in western Canada’s forest sector has generally trended up since hitting a historic low of 19,900 in
2009. This drop in employment stemmed from the 2008 economic recession and subsequent collapse of the US
housing market. Historically, over half of western Canadian forest products are shipped to the US annually, and
the collapse forced many sawmills in BC and Alberta to shutter.
Further complicating matters, the mountain pine epidemic was at a near peak in 2009, having ravaged over 16
million hectors of forest in BC7. Although BC implemented measures to combat the pine beetle infestation as
early as 2001, the annual volume of timber killed did not begin to decline until 2004. By 2008, the forest sector
in western Canada shifted its timber harvest to focus on dead pine, salvaging the logs while they were still
usable. Yet, the collapse of the US economy eroded BC’s main market for beetle-damaged logs.
With a sharp decline in demand from its top consumer (the US) and excessive supplies of dead pine, forest
companies in BC began to focus on the Chinese market. By 2011, BC was exporting 7.3 million cubic metres of
lumber to China on an annual basis, a remarkable 1,300% increase over 20038. Around this same time, a
number of saw mills in western Canada made significant investments in their facilities, allowing them to
integrate new technology to process an increasing amount of beetle-damaged wood. Several mills that had
previously shut down due to the economic recession were reopening under exclusive agreements with the
Chinese, breathing new life into western Canadian forestry. The growth of wood product shipments to China
has slowed recently. Nevertheless, China remains the second largest destination market for western Canadian
wood products9.
Despite the diversification of trade partners, employment in wood product manufacturing across the western
provinces has declined dramatically since its peak of 74,200 in 2003. In 2014, employment in wood product
manufacturing was 44,100 in western Canada, a decrease of 41% over 2003. Nevertheless, the 2014
employment level represents a 5% improvement over the previous year. Additionally, wood product
manufacturing employment has trended upward since the 2009 recession, although it is unlikely to return to
peak levels anytime soon. Due to advancements in technology, as well as supply constraints brought on by the
pine beetle, employment growth in wood product manufacturing is doubtful to see any spikes over the long
term.
Pulp and paper manufacturing in the western provinces has also declined dramatically since the late nineties.
On a global scale, the demand for paper began to fall with the emergence of the internet and web-based
publications. In 1995 employment in paper manufacturing across western Canada totalled a high of 32,200. By
2005, this figure was reduced by nearly 50%. On the bright side, the shift in how people receive information
(paper vs electronic) has leveled off. Over the last five years, employment in the paper industry has stabilized.
Employment in this industry remains well below the historic highs but was 5% higher in 2014 than when the
industry bottomed out in 2005.
Forestry – Region of Western Canada and the Territories – 2014-2016
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EMPLOYMENT OUTLOOK

Among the western provinces, BC (+3,662) is expected to experience the most growth in forestry and
wood products between 2014 and 2016. Alberta is also expected to see a substantial increase in
forestry and wood product related jobs between 2013 and 2016. While employment gains within
Manitoba (+192) and Saskatchewan (+170) will be small during this period compared to the other two
western provinces, the expected increases will represent proportionately significant improvements to
each local industry.

From an economic region perspective, employment growth is forecasted to be strong in the Okanagan
and Kootenay regions, averaging 4.6% per year. And while the largest volume of job openings for
forest sector work will be concentrated in BC, some regions in Alberta will be among the western
leaders in employment growth for these industries. Specifically, Calgary, Banff, & Southern Alberta
(+2.3%), as well as Edmonton, Red Deer, Camrose, & Drumheller (+2.2%) are expected to post notable
growth during this three year period.
REGIONAL OVERVIEW

Lower Mainland – Southwest: This region has historically been one of the largest centres for forestry
related employment in Canada. Two of the nation’s largest forest product companies, Canfor and West
Fraser Timber, are headquartered in Vancouver.

Northern BC: Forestry and wood manufacturing are especially vital to the economy in northern BC. A
number of small towns in the north rely heavily on local saw mills as a major source of employment.
Local mills provide good paying jobs in areas where employment opportunities are limited; however,
layoffs have been common place in this industry over the past decade and they can have an adverse
effect on the communities impacted. For instance, when a fire caused the closure of the Lakeland mill
Forestry – Region of Western Canada and the Territories – 2014-2016
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in 201210, the City of Prince George was devastated by the 200 direct job losses. By December 2014, a
newly re-built Lakeland mill reopened but with 50 fewer jobs than the old mill11.

Vancouver Island & Coast: The wood product manufacturing industry underwent significant changes on
Vancouver Island and Coast during 2014, albeit these shifts impacted business operations more than
employment levels. Specifically, Western Forest Products closed its Naniamo mill during the fourth
quarter of 2014, impacting around 62 employees. However, many of the workers affected by the
Nanaimo mill closure were offered positions at Western Forest Products’ newly renovated Duke Point
mill12.

Calgary, Banff & Southern Alberta: A strong housing market has driven demand for lumber in Alberta.
In December 2014, the production of lumber was up by 24% compared to the previous year. Since
2009, lumber production has climbed 50% in Alberta13, with the largest concentration of this activity
taking place in Calgary, Banff and southern Alberta.

Saskatoon & Northern Saskatchewan: While not on the same scale as BC and Alberta, the forest sector
is important to Saskatchewan’s economy, particularly in the northern part of the province. There are
10 large forest product manufacturing companies and over 100 smaller related businesses operating in
the province. Forestry is typically northern Saskatchewan’s second largest industry, generating over $1
billion in sales annually14.
Note: In preparing this document, the authors have taken care to provide clients with labour market information that is
timely and accurate at the time of publication. Since labour market conditions are dynamic, some of the information
presented here may have changed since this document was published. Users are encouraged to also refer to other sources
for additional information on the local economy and labour market. Information contained in this document does not
necessarily reflect official policies of Employment and Social Development Canada.
Forestry – Region of Western Canada and the Territories – 2014-2016
Page 7
Prepared by: Labour Market Information, Service Canada, Region of Western Canada and the Territories
For further information, please contact Labour Market Information in Vancouver at:
[email protected]
© Her Majesty the Queen in Right of Canada as represented by Employment and Social Development Canada,
2014, all rights reserved
END NOTES
1
http://cfs.nrcan.gc.ca/pubwarehouse/pdfs/35727.pdf
2
Statistics Canada, Labour Force Survey, 2015
http://www.statcan.gc.ca/daily-quotidien/150206/dq150206a-eng.htm
3
The Conference Board; The US Economic Forecast. 2015.
https://www.conference-board.org/data/usforecast.cfm
4
BC Ministry of Forests, Lands and Natural Resource Operations; A History of the Battle Against the Mountain
Pine Beetle; pg. 10. 2012.
http://www.for.gov.bc.ca/hfp/mountain_pine_beetle/Pine%20Beetle%20Response%20Brief%20History%20May
%2023%202012.pdf
5
BC Stats; Exports and Imports Data. 2015.
http://www.bcstats.gov.bc.ca/StatisticsBySubject/ExportsImports/Data.aspx
6
Conference Board of Canada; Provincial Outlook Winter 2015.
7
BC Ministry of Forests, Lands and Natural Resource Operations; A History of the Battle Against the Mountain
Pine Beetle; pg. 9. 2012.
http://www.for.gov.bc.ca/hfp/mountain_pine_beetle/Pine%20Beetle%20Response%20Brief%20History%20May
%2023%202012.pdf
8
BC Ministry of Forests, Lands and Natural Resource Operations; A History of the Battle Against the Mountain
Pine Beetle; pg. 10. 2012.
http://www.for.gov.bc.ca/hfp/mountain_pine_beetle/Pine%20Beetle%20Response%20Brief%20History%20May
%2023%202012.pdf
9
BC Stats; Exports and Imports Data. 2015.
http://www.bcstats.gov.bc.ca/StatisticsBySubject/ExportsImports/Data.aspx
10
BC Local News; Close to 250 Lakeland Mills Employees To Be Unemployed. 2012.
http://www.bclocalnews.com/news/149151955.html
11
The Globe and Mail; Bittersweet Reopening at Site of BC Sawdust Mill Explosion. 2014
http://www.theglobeandmail.com/news/british-columbia/bittersweet-reopening-at-site-of-bc-sawdust-millexplosion/article21899657/
12
Nanaimo Daily News; Downtown Nanaimo Mill Set to be Closed by WFP. 2014.
13
The Owl; Alberta’s Lumber Industry Reaches For The Sky. 2015
http://us7.campaign-archive2.com/?u=e425b7083c1526d250de3c060&id=cbff718d12&e=58d9c2695b
14
Government of Saskatchewan; Saskatchewan’s Forestry Sector. 2015.
http://www.economy.gov.sk.ca/Forestry