Canada’s forestry sector has survived headwinds in the past couple of years, and despite ongoing uncertainty, is poised for steady growth in the next four years. Record prices and rising demand have supported the Canadian wood and paper products industries. Looking forward, production growth is expected to moderate and even decline through 2019 and 2022. Investment is a key to the future growth in the sector. Paper products firms are already operating at or near capacity and will need to expand operations to meet demand, especially for packaging papers to support e-commerce. Wood products firms are reluctant to invest in new capacity because of concerns about U.S. lumber duties and lower prices in the U.S. market.

The forestry sector is a crucial player in regional economies from coast to coast in Canada. This recorded webinar is for government policy-makers, decision-makers in the sector, regional economic development officials and investors looking to make business decisions about this sector.

Robert Meyer-Robinson, Economist at the Conference Board, presents the latest forecast and the key underlying trends from the Conference Board’s biannual Industrial Outlook, including:

• U.S. duties not a sharp cut yet—Canadian sawmills have managed U.S. lumber duties thus far, thanks largely to record lumber prices. But the likely continuation of duties—and the absence of a resolution in the United States-Mexico-Canada Agreement—means further uncertainty for Canadian lumber producers.
• Export growth to slip—A bigger factor than tariffs in moderating Canada’s exports are climate change (disease outbreaks and wildfires), which is reducing the logs available. Furthermore, producers in both wood and paper are facing new international competitors in their U.S. markets, many of whom have lower production costs than Canadian suppliers.
• Investment urgency— With rising demand and production already at or close to full capacity, capital investment is necessary to capitalize on the market opportunities available to Canadian producers.
• Labour shortages put pressure on wage bills—The sector continues to face difficulties in attracting workers to staff key positions. Industry wages ballooned in 2017 and higher labour costs will weigh on industry margins over the next several years.
• Carbon costs—For industries such as paper product manufacturing that are energy intensive, trade dependent, and heavily geared toward commodity production, carbon pricing could hurt their global competitiveness and overall export performance.

About Robert

Robert Meyer-Robinson joined The Conference Board of Canada in 2015 as an Economist within the Industrial Economic Trends group. In this role, Robert is responsible for conducting regular research on several industries across the Canadian economy, and contributes to industrial outlook analysis. Robert holds a Bachelor of Arts Honours degree in economics and German from Queen’s University, and a Master’s degree in economics from Carleton University.