How is the forest industry changing?

Shifts in global demand for traditional forest products and growing demand for non-traditional products are changing Canada’s forest industry.

As more consumers turn to digital media in place of print media, the market for newsprint and printing and writing paper continues to shrink. Trade disputes in recent years also point to the vulnerability of a trade-exposed, commodity-focused sector.

At the same time, the development of innovative new products and new applications for existing products is helping the forest sector adjust to changes in market needs, improve financial performance and demonstrate its commitment to environmental performance.

Demand for Canadian wood products for infrastructure projects is growing. Recent advances in engineered wood products and building systems, as well as changes to Canadian building codes, are resulting in the construction of taller, more sustainable and more energy efficient buildings made of wood. Since 2009, more than 500 mid-rise buildings across Canada were built using wood as the primary construction material.

Wood-fibre residues and byproducts of forest product manufacturing can be used to make bioproducts, including biochemicals, biomaterials and bioenergy.

Bioproducts are a fast-growing category of forest products. For example, biochemicals are being used to make a wide range of products, including biodegradable plastics, industrial chemicals, personal care products and pharmaceuticals.

Infographic of two gas pumps with the text that revenues from Canadian bioproducts produced from forest and agricultural sources totaled $4.3 billion in 2015. Almost two-thirds of these sales were from biofuels, of which (1) 75.2% were from ethanol, (2) 24.1% were from biodiesel.

New markets and new challenges are transforming forest industry structure

With increased global integration through trade and multinational firms, many Canadian forest industry firms have acquired assets in the United States. Since 2010, Canada’s three largest pulp and paper companies made six acquisitions, with three of these investments in the United States. British Columbia’s three largest forest companies now own 45 softwood mills in the United States, and there are further investment plans for new sawmill developments. The structure of the forest sector has shifted from Canadian companies in North American markets to North American companies in global markets.

New technologies are improving environmental performance

Investment in new technologies is also bringing change to forest industry operations. The use of bioenergy is reducing carbon emissions and fossil fuel use. For example, by generating bioenergy from waste products and increasing energy efficiency, Canada’s forest industry cut its total energy use by 31% and reduced its greenhouse gas emissions by 49% between 2005 and 2015. Research on expanding pulp mills into biorefineries, where residues from the pulp-making process can be used to make new bioproducts, is underway.

 
Sources and information
  • Natural Resources Canada. Comprehensive energy use database (accessed March 6, 2018).
    • Industrial Sector – Aggregated Industries:
      • Table 8: Pulp and Paper Secondary Energy Use and GHG Emissions
      • Table 15: Forestry Secondary Energy Use and GHG Emissions
    • Industrial Sector – Disaggregated Industries:
      • Table 28: Wood Products Industries Secondary Energy Use and GHG Emissions
      • Table 34: Converted Paper Products Industry Secondary Energy Use and GHG Emissions
  • Statistics Canada. 2016. Report on energy supply and demand in Canada (2014 preliminary) (accessed March 20, 2018).
    • The methodology for estimating the amount of primary energy attributed to wood and spent pulping liquor in the pulp and paper manufacturing sub-sector was updated in 2015, causing changes in the data series between 1995 and 2002. In addition, from 1990 to 2010, wood waste and spent pulping liquor were incorrectly included in other fuels when estimating electricity generation in the Report on Energy Supply and Demand in Canada. This has now been corrected for the 2011, 2012 and 2013 data points, but will not be corrected for years prior to those. These changes have directly affected the estimates for industrial energy use and electricity generation, and indirectly affected the emissions estimates. The time series data for 2011–2013 may therefore not be completely consistent with data for earlier years.
    • Additional information about the Natural Resources Canada–Canadian Forest Service’s Investments in Forest Industry Transformation Program.
  • Statistics Canada. 2017. Results from the 2015 bioproducts production and development survey.
    • The 2015 survey data were the most current at the time of publication.
    • “Bioproducts” included biofuels, bioenergy, organic chemicals, materials and composites, intermediary biochemicals and biomaterials, and other bioproducts.