Canada is the second largest exporter of primary forest products in the world, after the U.S. Canada’s forest sector is among the top five contributors to the nation's net trade.

The forest industry is an important employer in many regions of Canada, particularly in rural and remote communities. Major forest products include softwood lumber, structural panels, newsprint, pulp and various paper products. The development and production of many new and innovative products is also underway in the sector. These products range from bioenergy and bioplastics to new building systems. 

A sector in transition

In recent years, Canada’s forest industry has been refocusing its business model to help the sector adapt to new challenges. Recent challenges include: a worldwide economic downturn; strengthening of the Canadian dollar against the currencies of our key competitors; a structural decline in North American newsprint demand; and increased competition from other forest product suppliers.

Recovering from these difficult circumstances has required Canada’s forest sector to work hard to transform in ways that will open new opportunities for the future. For instance:

  • A focus on product and process innovation is leading to improvements that will strengthen the sector’s competitiveness for the long term. Non-traditional products and services are the focus of intensive research and development. Of particular note are those products and services derived from forest biomass (for example, bioenergy, bioproducts and biochemicals). Increased production of bioproducts is expected to give the industry a significant boost in the highly competitive global marketplace.
  • New market opportunities are being targeted. Work is underway to identify both new end use markets and new markets for Canada’s traditional products.
  • The importance of environmental sustainability and legality throughout the forest sector has been recognized by government, industry and other players. Sustainable forest management practices at every stage of production demonstrate responsible resource stewardship and respond to the expectations of environmentally responsible forest practices in today’s global marketplace.

Regional snapshot of the industry

Canada’s forest industry varies across the country:

  • Eastern Canada is dominated by pulp and paper product manufacturing.
  • Western Canada is dominated by wood product manufacturing.
  • Quebec, Ontario and British Columbia have the greatest numbers of forest workers.
  • The Atlantic Provinces, Quebec and British Columbia are the most forest-dependent regions, with a large share of their economy based on the sector.