Biological Diversity Ecosystem Condition and Productivity Soil and Water Role in Global Ecological Cycles Economic and Social Benefits Society's Responsibility
Economic and Social Benefits Distribution of Benefits Sustainability of Benefits
Indicator 5.1.1 - Contribution of timber products to the gross domestic product Indicator 5.1.2 - Value of secondary manufacturing of timber products per volume harvested Indicator 5.1.3 - Production, consumption, imports, and exports of timber products Indicator 5.1.4 - Contribution of nontimber forest products and forest-based services to the gross domestic product Indicator 5.1.5 - Value of unmarketed nontimber forest products and forest-based services
5.1 Economic and Social Benefits
Canada’s forests generate a wide range of benefits such as timber and nontimber products, recreation, and service-based industries that are important both nationally and internationally. Nontimber and valueadded products will likely play an increasingly important economic role in the forest sector in Canada, although Canada remains the world’s largest exporter of forest products. Canada’s future share of the international forest products market and the competitiveness of its forest industry will depend on its ability to adapt to changes in domestic and international markets at a time when the forest is increasingly expected to be managed for uses other than timber production.

Canada’s success in producing and marketing forest products and its closeness to the United States market have provided excellent economic opportunities. These advantages will continue to supply good jobs and income for thousands of Canadians. However, low product prices and new global competition from lowercost fiber sources present new challenges for the forest industry. Addressing these challenges requires continuous improvements in new product development, market diversification, cost competitiveness, quality enhancement, worker retraining, and public reporting. Nevertheless, opportunities exist to increase products and services from the forest sector.

Wealth from forest use flows to Canadians through the market economy, which can be measured with economic indicators such as gross domestic product. It also originates from the subsistence economy, which involves in-kind wealth from the extraction and use of fuel wood, building materials, meat, fish, and fur products, as well as ecosystem services.

Sales of timber products were estimated at $77 billion in 2003. The contribution of the forest industry to Canada’s gross domestic product (Indicator 5.1.1) was 2.9% in 2005, slightly less than in 1991. This level of stability over the past decade contrasts with the gradual decline in previous decades. On average, growth in the forest sector has lagged behind that of the rest of the Canadian economy. This situation appears to have stabilized in the past decade, although there is considerable variability between sectors.

The thousands of timber forest products are divided into two basic categories: primary processed products, made from raw material, and secondary processed products, derived from primary processed products. Indicator 5.1.2 shows that between 1995 and 2002, the value of shipments minus the cost of intermediate inputs, otherwise known as the value added, rose more rapidly in the secondary processing industry than in the primary processing industry. In fact, the former accounted for 16% of the total value added in 1995 and 31% in 2003. This growth in the secondary processing industry increases the economic benefits derived from each cubic metre of wood harvested. The secondary processing industry is not evenly distributed throughout Canada. In 2003, it accounted for 49% of value added in the forest industry in Ontario, 33% in Quebec, 19% in Alberta, 13% in New Brunswick, and 12% in British Columbia.

Canada exports very little of its raw forest resources and is actually a net importer of timber, but it processes far more forest products than required for the domestic market (Indicator 5.1.3). On the basis of Statistics Canada’s input–output model, it was calculated that 79% of finished wood products manufactured in Canada were destined for export in 1999. The forest sector is still the largest contributor to Canada’s positive trade balance.

In addition to being a source of timber, Canada’s forests are home to flora and fauna found nowhere else. They help maintain quantity and quality of water, prevent soil erosion, and constitute a carbon sink that stores greenhouse gases. Some products are marketed, but others are not, making it difficult to assess their contribution to the Canadian economy.

Indicator 5.1.4 measures the contribution of nontimber forest products and forest-based services to the gross domestic product. Marketed nontimber forest products include wild food products, certain manufacturing materials, health and personal care products, decorative aesthetic products, environmental products, and so on. Although it is theoretically possible to estimate their contribution to the Canadian economy, in practice, data on these products are rarely available, and when they are, they are often incomplete. However, there is unanimous agreement among studies that data are too often inadequate.

Finally, there are forest products and services that are not sold on any market. Indicator 5.1.5 measures the value of unmarketed nontimber forest products and forest-based services. Although the scope of such products is not contested, it is difficult to estimate their value. For example, the presence of trees near a watercourse or on a steep slope can be so important to the prevention of soil erosion that cutting them is prohibited. The value of forests as carbon sinks that absorb greenhouse gases is another example. Finally, forest parks attract millions of visitors each year, but since they can be accessed often free of charge or at very little cost, it is difficult to put a price tag on their recreational value. Nevertheless, the contribution of these products must not be disregarded simply because of the problems inherent to estimating their value.

The growth of secondary manufacturing and nontimber products, coupled with the continued strong contribution of primary products, indicates that Canadians are enjoying significant economic benefits from Canada’s forest resources.