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
Indicator 5.1.3 - Production, consumption, imports, and exports of timber products
supporting indicator

Canada's extensive forest resources are sufficient not only to meet most of the forest products needs of Canadian consumers, but also to make it the largest net exporter of forest products in the world. For 2003, the most recent year for which data are available, shipments by the Canadian wood products, paper, and allied industries were valued at $66 billion. Shipments for logging products were estimated at an additional $12 billion, raising the total value of shipments to $77 billion. For that same year, Canadian exports of forest products were valued at $39.6 billion, not counting re-exports. According to the United Nations Food and Agriculture Organization (FAO), Canada's contribution accounted for one sixth of all world exports in 2003 (FAO 2004).

Since exports are the shipments destined for foreign markets, they are often subtracted from total shipments of forest products to determine the proportion of shipments that are destined for the Canadian market. This analysis is misleading, however, as domestic shipments are composed partly of intermediate products that are reprocessed before export. It is therefore preferable to ignore domestic shipments of intermediate products and compare exports with the domestic shipments of finished products.

For example, shipments of roundwood by forest operations, valued at $12 billion, are rarely meant to go abroad but roundwood is often converted into forest products that are destined for export. From that standpoint, it is incorrect to consider roundwood shipments as solely domestic shipments. The same is true for primary manufacturing products that are used to produce secondary manufacturing products destined for export.

Using Statistics Canada's Canadian intersectoral model, the production chain for all forest products can be followed. By eliminating the manufacturing of intermediate products destined for other forest industries, it was then possible to ascertain what proportion of the forest products stayed in Canada and what proportion was destined for exports in 1999.1 It is estimated that for 1999, 64% of domestic shipments of forest products were shipped to another forest industry for further processing and that 36% were for export, consumers, or a nonforest industry (such as housing construction). This made it possible to calculate that 79% of finished forest products manufactured in Canada were destined for export while 21% remained in domestic markets. This estimate does not include products processed by nonforest industries, which may also export their products (kitchen cabinets, for example).

The importance of foreign markets for Canadian forest products is particularly striking for the three main products manufactured in Canada: softwood lumber, wood pulp, and paper products including newsprint, fine papers, and paperboard. Approximately 81 million m3 of softwood lumber were produced in 2005, with exports of softwood lumber double the domestic consumption (Figure 5.1h). Approximately 25 million t of wood pulp were produced in the same year, but Canadian consumption of wood pulp was larger than exports (Figure 5.1i) because wood pulp is an intermediate product that is made into paper and paperboard and exported as such. The 15 million t of wood pulp used in Canada were mixed with 5 million t of recycled wastepaper to produce 20 million t of paper and paperboard, including 8 million t of newsprint. Of these 20 million t of paper and paperboard, only 5 million were consumed in Canada, while 15 million were exported. Only 1 million t of approximately 8 million t of newsprint produced were consumed in Canada, while almost 7 million t were exported (Figure 5.1j), making Canada the largest producer and exporter of newsprint in the world.

Figure 5.1h

Figure 5.1h Canadian softwood lumber production, consumption, and exports. (Source: Statistics Canada 2005c)
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Figure 5.1i

Figure 5.1i Canadian newsprint production, consumption, and exports. (Source: Statistics Canada 2005c)
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Figure 5.1j

Figure 5.1j Canadian wood pulp production, consumption, and exports. (Source: Statistics Canada 2005c)
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Despite Canada's vast forest resources, some wood products are still imported. One reason for this is that the imported product is made from wood species that do not grow here or are not available in sufficient quantities. Another reason is that the product is so specialized that it is best to manufacture it close to the major market, instead of near the resource (as in the case of some food packaging, paper filters, and so on). Since the Canadian market is much smaller than that of the United States, the specialized product may be manufactured south of the border and then imported into Canada.

Canadian imports of forest products were valued at slightly more than $10 billion in 2005, resulting in a large trade balance surplus of $31.9 billion for forest products. In comparison, the trade balance for the Canadian economy was $56.1 billion. This significant forest products trade surplus benefits all Canadians, as the revenues are reinvested in the Canadian economy, enabling Canadians to import other products without creating a trade deficit for the country.