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Indicator: Forest sector gross domestic product

In 2019, the forest sector contributed $23.7 billion (1.1%) to Canada’s nominal GDP. The forest sector contracted by 7% in 2019, while the overall economy grew by 1%.

  • The real GDP of both the wood product manufacturing subsector and the pulp and paper manufacturing subsector decreased by 6.0% and 7.9%, respectively. Weak global demand and domestic wood fibre supply challenges caused significant structural changes for both subsectors.
  • The contribution of the forestry and logging subsector to Canada’s real GDP decreased significantly (by 9.0%) between 2018 and 2019, because of constraints on the availability of wood fibre.

Gross domestic product (GDP) is the total value of all final goods and services produced annually in a country. It can be thought of as the size of a country’s economy. In 2018, the World Bank ranked Canada as the 10th largest economy in the world.

Canadian forest sector's GDP, 2009 to 2019

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Graph summaries

Graph 1: Nominal gross domestic product (GDP) of the Canadian forest sector increased 10% in 2010, to about $19 billion, then decreased 3% in 2011 to about $18.6 billion. It then increased on average 4% annually from 2012 to 2018, when it reached about $26 billion. In 2019, nominal GDP declined 9% to about $23.7 billion.

The forestry and logging subsector contributed between $3.5 billion and $4.6 billion each year to the forest sector’s nominal GDP.

The wood product manufacturing subsector increased its annual contribution from about $6.1 billion in 2009, to a high of $11.4 billion in 2018. In 2019, the subsector’s contribution decreased for the first time in six years to $10.5 billion.

The pulp and paper manufacturing subsector contributed between $7.7 billion and $8.7 billion each year from 2009 to 2016, and then grew to $9.1 billion in 2017, and $10.1 billion in 2018. The subsector decreased in 2019 to $9.1 billion.


Graph 2: Real gross domestic product (GDP) growth of the Canadian forest sector shrank by about 19% in 2009, but grew in 2010 and 2011 by about 9% and 1%, respectively. In 2012, real GDP shrank again by 1%, then grew for 5 years in a row at about 1% to 4% growth per year. Real GDP of the Canadian forest sector shrank by about 1% in 2018 and 7% in 2019. Comparatively, the total annual real GDP growth for all industries decreased by about 3% in 2009, and then increased annually by 1% to 3% until 2018. In 2019, the forest sector annual real GDP growth declined 7% while total annual real GDP for all industries grew by 1%.

Graph data
Table showing the contribution, in billions of dollars, of three subsectors of the forest sector (forestry and logging, wood product manufacturing, pulp and paper manufacturing) to nominal GDP for each year from 2009 to 2019
Year Forestry and logging Wood product manufacturing Pulp and paper manufacturing
2009 3.50 6.11 7.71
2010 3.64 6.81 8.58
2011 3.85 6.53 8.18
2012 3.94 7.40 7.47
2013 3.39 8.79 7.42
2014 3.73 8.72 7.93
2015 3.99 8.96 8.58
2016 4.09 9.99 8.61
2017 4.16 10.84 9.12
2018 4.61 11.35 10.05
2019 4.08 10.48 9.13
 
Table showing the percentage of real GDP growth for the total of all industries and for the forest sector for each year between 2009 and 2019
Year Total all industries
(percent)
Total forest industry
(percent)
2009 -3.3 -18.8
2010 3.5 8.6
2011 3.3 1.3
2012 1.8 -1.4
2013 2.6 1.7
2014 2.8 4.0
2015 0.9 3.2
2016 1.1 0.2
2017 3.5 1.1
2018 2.4 -1.0
2019 1.5 -7.3

Why is this indicator important?

  • Contribution to nominal GDP is one of the primary indicators used to gauge the size and health of Canada’s forest sector compared with the size and health of other economic sectors in a year.
  • Real GDP allows analysts to gauge the health of the Canadian forest sector’s economy to that of the entire national economy. It measures the year-over-year change in the size of the forest sector’s economy, taking into account inflation.

What is the outlook?

  • Demand for traditional paper products is expected to continue falling in 2020, while household paper and packaging are expected to remain solid.
  • Overall, the Canadian forest sector was expected to grow in 2020, however, the COVID-19 pandemic has created uncertainty. Stronger demand for Canadian lumber, stimulated by expected increases in United States housing starts, were expected to support that growth, but this may materialize later than expected depending on how North American and global economies perform following the COVID-19 pandemic.

What reporting frameworks does this indicator support?

Sources and information
  • Nominal GDP
  • Real GDP
    • Statistics Canada. Table 36-10-0434-01 (formerly CANSIM 379-0031) Gross domestic product (GDP) at basic prices, by industry, monthly (x 1,000,000). (accessed March 16, 2020).
      • Real GDP in 2012 constant prices.
      • Nominal and real GPD vary in that real values are adjusted for inflation whereas nominal values are not. Therefore, real GDP is used to account for differences between time periods (e.g. comparing 2017 and 2018 GDP).
      • Data from Statistics Canada’s Natural Resources Satellite Account (NRSA) are a key source of information on the economic contribution of the forest sector in Canada. The NRSA, the result of collaboration between Natural Resources Canada and Statistics Canada, is able to capture economic activity in forest industry segments that have traditionally been difficult to measure, such as wood furniture manufacturing. According to data from the NRSA, the forest sector directly accounted for $26.4 billion (or 1.2%) of Canada’s nominal GDP in 2019.
 

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

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