Canadian Forest Sector is a Productivity Powerhouse

The Canadian forest products industry is well positioned for a bright future after making robust advances in labour productivity even while facing one of its worse downturns in history.

A Detailed Analysis of Productivity Trends in the Canadian Forest Products Sector was undertaken by the Centre for the Study of Living Standards (CSLS) for the Forest Products Association of Canada (FPAC). The independent study shows that between 2000 and 2012 the labour productivity of the Canadian forest products industry grew at a compound annual rate of 2.5%, well above the overall Canadian business sector growth of 0.7%. The industry had the second highest labour productivity growth rate from 2000-2012 for all Canadian industry sectors.

It is remarkable to see this excellent productivity performance considering the jolts that hit our industry since the beginning of the 21st Century,” says the President and CEO of FPAC, David Lindsay in reference to an unprecedented confluence of near-term shocks such as the higher dollar and sluggish U.S. economy, and structural changes such as the precipitous drop in paper use in the wake of the digital revolution.

“These positive results speak to the resilience of our industry and the creativity and sound business decisions made by companies in the sector both pre and post-recession,” says Lindsay. “This study underscores how our companies weathered a difficult economic storm leaving them well positioned to grow and seize opportunities in the days ahead.”
FPAC believes that a renewed focus on leveraging productivity gains through investment and innovation is the key to the industry’s future as the sector moves from an established commodity industry to a nimble green industry serving wider markets and driven by the opportunities of the emerging bio-age.

Building on the productivity performance will also help the industry reach the sector’s Vision2020 including the ambitious goal of producing another $20 billion dollars in economic activity and refreshing the workforce with 60,000 new recruits by the end of the decade.

“We now have a solid foundation for our transformation agenda, but we need to find ways to continue on this path of productivity to ensure the industry remains a major contributor to Canada’s economy and job creation, especially in rural Canada. Industry needs to puts its shoulder to the wheel and governments need to continue its strategic support for innovation,” says Lindsay.

FPAC is recommending a renewed focus on investing in both human and physical capital as well as strong spending on research and development.

FPAC provides a voice for Canada’s wood, pulp, and paper producers nationally and internationally in government, trade, and environmental affairs. The $57-billion-a-year forest products industry represents 2% of Canada’s GDP and is one of Canada’s largest employers operating in hundreds of communities and providing 230,000 direct jobs across the country.