|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|
5.1 Economic and Social Benefits
Forests provide substantial commercial benefits, including timber, nontimber forest products, water, and tourism, and significant noncommercial benefits, including wildlife, recreation, aesthetics, and wilderness values. Although not always measurable in monetary terms, all these activities are highly valued by Canadians and provide significant benefits to Canadian society. The distribution of these benefits among civil society is a key aspect of social equity. Sustainable forest management requires that forests be managed to provide a broad range of goods and services over the long term. These aspects of sustainability are examined under three elements in this criterion: economic benefits derived from Canada’s forests, the distribution of benefits, and the sustainability of benefits.
Element 5.1 demonstrates the significant economic benefits that accrue to Canadians from the forest. The most recent information shows that sales of timber products are valued at $77 billion and the contribution of the forest industry to Canada’s gross domestic product is 2.9%. Growth in the forest sector lagged behind that of the rest of the Canadian economy for several decades but is now on average similar. Secondary manufacturing of timber products has increased markedly since 1995, which increases the economic benefits derived from each cubic metre of wood harvested. Almost 80% of finished wood products manufactured in Canada were destined for export according to a 1999 Statistics Canada model.
In addition to being a source of timber, Canada’s forests produce a diversity of nontimber products. Marketed nontimber forest products include wild food products, certain manufacturing materials, health and personal care products, and so on. There is a lack of solid economic data on these products, but the value of the sector is clearly growing quickly.
Additionally, some forest products and services, such as ecological services, are not sold on any market, making their economic impact even more difficult to assess. Nevertheless, they should not be disregarded simply because of the difficulty involved in calculating their value.
Sustainable forest management also includes consideration of the distribution of benefits in society. Element 5.2 goes beyond the contribution of the forest sector to the GDP to examine forest ownership, timber tenures, and the distribution of key financial benefits.
Allowing the sustainable private extraction of a forest resource located mostly on crown lands has always been a key component of forest policy in Canada and forest tenures are the agreements that have been developed to achieve this goal. Most tenures in Canada are volume-based, but new tenure types have been introduced since 1990, often to improve access to forest resources for small- and medium-sized enterprises, and communities. Canada’s Aboriginal peoples are also gaining more access to the resource, thereby slowly reestablishing the importance that forests have played in their economies.
Labor, forestry businesses, and governments each receive a significant share of the wealth derived from the forest sector. Despite this broad distribution of economic benefits, however, further improvements will likely result from the new tenure arrangements that will facilitate the involvement of communities and Aboriginal peoples in forest management.
The sustainability of benefits derived from Canada’s forests is addressed in Element 5.3. Economic, social, and environmental sustainability goals depend on a level of resource use that does not exceed the long-term productive capacity of the resource base to provide a wide range of goods and services. Although it is still difficult to assess whether the extraction of many nontimber forest products falls within sustainable levels, research is underway to better understand management options and harvesting impacts. Timber product extraction still takes place at levels below prescribed allowable annual cuts.
The average rate of return on capital employed (ROCE) in the forest sector had trailed that of the manufacturing sector and the total economy in Canada for much of the 1980s and early 1990s but improved in the late 1990s. There is considerable cyclical variation in returns, as well as wide variation between subsectors, corresponding to differences in capital investment needs as well as product prices. In general, resource management, extraction, and processing generate hundreds of thousands of direct, indirect, and induced jobs in Canada and sector workers enjoy higher average salaries than those in other manufacturing industries. Recently, productivity has also outperformed the average for all domestic business sectors in Canada. Nevertheless, there are considerable problems facing the sector over the next few years, with poor returns and increasing global competition affecting many mills.
Canada’s forests offer a diversity of products and benefits such as dimensional lumber, paper, medicine, value-added products, and service-based industries. Canada is the world’s largest exporter of forest products and it will need to continue to adapt and change to maintain this status. Nontimber and value-added products now account for an increasing share of Canada’s forest exports and are an important part of the economic future of the sector in Canada. Governments, industry, and communities all have an important role and an important stake in ensuring that economic benefits continue to flow to Canadians.