Forest Industry – National Picture
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The forest sector is an important contributor to Canada’s economy, providing jobs to Canadians from coast to coast.
- Canada exports forest products to 180 countries around the world
- The US is the top export destination for Canada’s forest products
- In 2017, wood product manufacturing was the largest forest industry contributor to the nominal gross domestic product (GDP)
Learn more about the forest industry’s national picture
Over the last decade, the sector has faced a number of challenges (e.g. the collapse of the United States [US] housing bubble, declining demand for newsprint and printing and writing papers, and the outbreak of the mountain pine beetle) that resulted in mill closures and thousands of jobs lost. In response to these challenges, the forest industry has developed new and innovative products and materials, diversified its international markets, and developed new end-use markets.
Some of the ongoing challenges the industry faces today include:
- market access following increased protectionism and trade disputes
- fibre shortages caused by accelerating natural disturbances (e.g. residual impacts from the mountain pine beetle and the emergence of the spruce budworm) and measures to address species at risk (e.g. caribou)
- changing consumer trends (e.g. the rise of the digital media era) leading to a structural decline in newsprint and printing and writing papers
- increased global competition in Asia, South America and the US South
- access to transportation caused by rail car shortages, underestimation of market demand, and severe weather conditions
At the same time, the industry faces tremendous opportunities:
- technological advances that continually unlock new uses for fibre (e.g. biofuels, biomaterials, and biochemicals)
- rising demand for low-carbon, renewable products that are legally sourced and alternatives to fossil-based products
- growing recognition of the environmental and safety benefits of building with wood; and
- new demand for forest products from growing economies
The forest sector consists of three main activities categorized under the North American Industry Classification System (NAICS):
- forestry and logging (NAICS 113)
- wood product manufacturing (NAICS 321)
- pulp and paper manufacturing (NAICS 322)
Although support activities for forestry (NAIC 1153) are also part of the sector, data are not always available for that industry. Therefore, the majority of the data presented will focus on the three main industrial activities.
In 2017, wood product manufacturing was the largest contributor to the nominal gross domestic product (GDP), followed by pulp and paper manufacturing and then forestry and logging.
There are limited data available for emerging forest sector activities, such as manufacturing of biofuels, biochemicals or bioproducts. The Government of Canada is improving the availability of bioeconomy data and integrating them with traditional forest sector activities, particularly for macroeconomic indicators such as GDP and employment.
Nominal gross domestic product by forest industry subsector, 2017
This graph displays the percentage of nominal gross domestic product by forest industry subsector in 2017. The greatest percentage was in wood product manufacturing (46%), followed by pulp and paper manufacturing (36%), and by forestry and logging (18%).
For information on production, please see the State of Canada’s Forests report (2018), page 44.
For information on exports, please see the State of Canada’s Forests report (2018), page 45.
The United States (US) remains Canada’s primary export destination for forest products; however, over the last decade, exports to other international markets have become increasingly important.
With the US housing market crash and the global economic crisis, the share of Canadian forest product exports to the US dropped from 81% in 2005 (just before the crash) to 61% in 2011. During that time, Canada increased exports to Asian markets, particularly China, to help mitigate the impacts.
Today, Canada’s forest product exports to the US have recovered even as China remains an important market destination. In 2017, Canada exported $35.7 billion in forest products globally, the majority of which went to the US ($24.2 billion or 68%) and to China ($5.5 billion or 15%).
Canada continues to diversify its forest product markets, exporting to 180 countries around the world. Despite the increased competition from low-cost producers, Canada will continue to benefit from advantageous access to large and growing offshore markets.
Exports of Canadian forest products by market, 2007–2017
This graph displays the value of Canadian forest product exports by export markets (the US, China, Japan, EU, South Korea and other countries), in billions of dollars for each year between 2007 and 2017. Exports decreased to all markets between 2007 and 2010, after which they gradually increased to a ten-year maximum in 2017.
Gross domestic product
For information on gross domestic product, please see the State of Canada’s Forests report (2018), page 43.
For information on national employment in the forest industry, please see the State of Canada’s Forests report (2018), page 39.
For information on financial performance, please see the State of Canada’s Forests report (2018), page 47.
Forest industry carbon emissions
For information on forest industry carbon emissions,please see the State of Canada’s Forests report (2018), page 49.
Statistics Canada. CANSIM table 379-0029: Gross domestic product (GDP) at basic prices by industry (accessed April 11, 2018).
- For nominal GDP up to (and including) 2014.
Statistics Canada. CANSIM tables 379-0031, 329-0077 and 329-0074 (accessed April 11, 2018).
- Natural Resources Canada-Canadian Forest Service’s calculations for 2015–2017 nominal GDP are based on Statistics Canada’s tables 379-0031, 329-0077 and 329-0074: GDP in 2007 constant prices and estimated industry price deflators.
Global Trade Atlas. IHS Markit Inc. (accessed July 13, 2018).
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