Forestry Sector Third Highest Contributor to Canadian Economy

on Jun 4, 2012
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Following data that forestry is the third highest contributor to the Canadian economy after energy and minerals, the Canadian Chronicle Herald reported that the federal and local governments are pledging $4.2 million to fund new research into innovation and markets. The newspaper explained that each of the local governments is expected to contribute $1.58 million, and the University of Moncton, where the research will take place, will give $529,000. The remaining funds will come from the private sector.

The new investment venture is intended to expand the value-added wood industry, which is one of the priority sectors under the provincial government’s economic development plan. “Research and innovation are vital to ensuring our forestry industry will be even more important to the future of the economy than it has been to its past,” said New Brunswick Premier David Alward, the region where the research project will be based, and heavily reliant on a thriving forestry sector.

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Prime Minister Stephen Harper asserted: “You know, as they say, money doesn’t grow on trees, but trees can create prosperity. We think it is yet another opportunity to identify possibilities for the growth of this industry in this region. We hope to do practical research here that will result in opportunities to make the industry more profitable and employ more people.”

According to Harper, following the energy and minerals industries, the forestry sector is the third largest contributor to the national economy. The industry’s scope and significance was further highlighted by recent data, which showed that in 2011 Canada was the world’s largest exporter of lumber to China, surpassing Russia for the first time.!m[](/uploads/story/45/thumbs/canadian_logs_inline.png)

An article in the Vancouver Sun stated that Canada continues to dominate the Chinese fast-growing into 2012 as well. The newspaper cited latest statistics from China Customs, which estimated that Canada supplied 1.45 million cubic metres softwood lumber during the first quarter of 2012, claiming 47 percent of the market for softwood lumber in China. Russia came in second with a 35 percent market share.

The Vancouver Sun explained that softwood lumber made from coniferous species like spruce, pine and fir is the dominant wood product manufactured in sawmills particularly in the British Columbia province. B.C. softwood lumber makes up for an estimated 95 percent of all Canadian softwood shipments to China, making the province China’s largest global supplier.
Gerry Van Leeuwen of the Vancouver consultants International Wood Markets Group told the Vancouver Sun: “A number of issues have driven our success but one of the biggest ones is price. As the North American lumber market collapsed in 2005/06 and lumber prices went south – from US$400 a thousand board feet to US$188 – suddenly our lumber became very attractive.”
Van Leeuwen further noted that the total annual demand for timber in China has been growing at a rate of 10 to 15 percent, which also contributed to the increased costs for logs globally. As a result, he said, the lower prices of Canadian lumber have made the locally grown material even more attractive to buyers.

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