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How does the forest industry contribute to Canada’s economy?

The forest industry is one of Canada’s most important manufacturing sectors.

The forest industry:

  • employed about 210,600 people across the country (2018), including an estimated 11,600 Indigenous employees (2016)
  • supported 300 municipalities across Canada as a main source of jobs and revenues
  • accounted for about 7% of Canada’s total exports in 2018
  • generated $2.9 billion in revenue for provincial, territorial and federal governments in 2017
  • contributed roughly $25.8 billion to Canada’s economy in 2018.
A forklift moving bundles of lumber next to a transport truck.
In 2018, forest industry exports grew by 7.6%.

The forest industry represents a smaller percentage of Canada’s economy than other resource sectors, but it creates more jobs and contributes more to the balance of trade for every dollar of value added than do other major sectors.

More than lumber and pulp and paper

The heart of the Canadian forest sector is traditional forest products, including lumber, other solid wood products, pulp and paper, and activities such as forest management and logging. However, with Canada’s commitment to clean technology and the transition to a low-carbon economy, non-traditional forest products, such as advanced bioproducts, are growing in importance.

Top export markets for Canadian forest products (2018)
Graphic showing the top export markets for Canadian forest products in 2018, by percentage, described below.
Graph data
Table showing the top export markets for Canadian forest products in 2018, by percentage.
Export market Percent of total (%)
United States 66%
China 15%
Japan 5%
European Union 3%
India 2%
Other 9%

An economic engine from coast to coast, from small towns to large cities

Forest operations take place in all regions of Canada except the Far North. In fact, the two provinces for which the forest sector is the most important are New Brunswick and British Columbia:

  • In New Brunswick, the forest sector accounted for around 4.5% (2018) of the provincial gross domestic product (GDP)
  • In British Columbia, the forest sector accounted for around 2.9% (2018) of the provincial GDP

The Canadian forest sector is a major employer nationwide. Its economic contributions are particularly evident in many rural and Indigenous communities, where forest-related work is often the main source of income. There are about 300 such communities where forest sector jobs are crucial to ensuring economic sustainability.

However, the forest sector is also increasingly an “urban” sector. Consumer forest products and advanced bioproducts are typically manufactured closer to consumers (e.g. household paper, cabinets, wallpaper). About 35% of Canada’s forest sector labour force lives in large urban centres. Statistics Canada defines large urban centres as census metropolitan areas (CMA). CMAs are formed by one or more adjacent municipalities centred on a population centre (known as the core). A CMA must have a total population of at least 100,000 of which 50,000 or more must live in the core.

A competitive industry in the global market

Globalization is increasing trade possibilities beyond Canadian producers’ traditional markets, and the industry has shown its capacity to be competitive. This helped the forest industry’s exports remain relatively robust throughout the economic crisis of the late 2000s, the effects of which lasted through 2012. In 2018, forest industry exports grew by 7.6%. The forest industry was one of the export sectors with the largest trade surpluses. In particular, the trade surpluses in pulp and paper products grew by 18.0% and 34.3%, respectively. The trade surplus in wood products remained relatively unchanged between 2017 and 2018 (+0.9%).

Large spools of brown paper in a warehouse.
Traditional forest products remain the heart of the Canadian forest sector. However, advanced bioproducts are growing in importance.
Sources and information
  • National Forestry Database. Revenues, Table 8.1 Statement of revenues from the sale of timber from provincial Crown land, by jurisdiction. (accessed May 13, 2019).
  • Statistics Canada. 2016 Census of Population (special extraction, April 20, 2018).
    • Natural Resources Canada–Canadian Forest Service calculations for Indigenous employment are based on Statistics Canada’s 2016 Census of Population.
      • These values refer to the number of people “employed”, not “in the labour force”, which includes those “unemployed”.
      • “Indigenous” refers to people who are First Nations (North American Indian), Métis, Inuk (Inuit), and/or those who are Registered or Treaty Indians (that is, registered under the Indian Act), and/or those who have membership in a First Nation or Indian band.
  • Statistics Canada. Table 33-10-0006-01 (formerly CANSIM 180-0003). Financial and taxation statistics for enterprises, by industry type. (accessed May 13, 2019).
    • Includes data for NAICS codes 1153, 113, 321 and 322
    • Includes data for Total Taxes and Total Indirect Taxes
  • Statistics Canada. Table 36-10-0401-01 (formerly CANSIM 379-0029): Gross domestic product (GDP) at basic prices, by industry. (accessed May 1, 2019).
    • Natural Resources Canada–Canadian Forest Service’s calculations for 2015–2018 nominal GDP are based on Statistics Canada’s Tables 36-10-0434-01, 18-10-0032-01 and 18-10-0029-01 (formerly CANSIM 379-0031, 329-0077 and 329-0074, respectively): GDP in 2012 constant prices, and estimated industry price deflators indexed to 2010.
  • Statistics Canada. Table 36-10-0402-01 (formerly CANSIM 379-0030): Gross domestic product (GDP) at basic prices, by industry, provinces and territories. Chained (2012) dollars (accessed May 1, 2019).
    • Includes data for NAICS codes 113, 1153, 321 and 322
  • Statistics Canada. Table 36-10-0489-01 (formerly CANSIM 383-0031): Labour statistics consistent with the System of National Accounts (SNA), by job category and industry. (accessed May 22, 2019).
  • Statistics Canada. Merchandise trade data (special extraction, March 11, 2019).
    • “Total all forest products” includes only HS codes 44, 47 and 48.
Photo credits
  • Forklift loading truck. Photo by pixelprof/iStock by Getty Images
  • Spools of paper in warehouse of printing company. Photo by DarioEgidi/iStock by Getty Images.
 

Table of contents — The State of Canada's Forests Report

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