bc-forest-industry-economic-impact-study

Recommendations

Info

8 2. INTRODUCTION BACKGROUND AND STUDY PURPOSE The BC Lumber Trade Council, Council of Forest Industries, Coast Forest Products Association and Interior Lumber Manufacturers’ Association engaged MNP LLP (“MNP”) to carry out an economic impact study of the forest industry (“the Industry”) in British Columbia (“BC”). The scope of the study included: An overview of the industry, including the development of a value chain to illustrate the linkages that exist between the Industry and other sectors of the economy. An assessment of the economic impacts of the industry and of each of the coast and interior forest regions, as well as the economic impacts of each of the industry’s sectors. Included in the scope of the study were the following six sectors: primary manufacturing, forest management, secondary manufacturing, fibre supply and wholesale, forest innovation and silviculture. A comparison of the economic impacts generated by the industry with those produced by other industries in BC. A description of the social and economic benefits of the industry, highlighted through a series of case studies. STUDY APPROACH In preparing the study, MNP carried out the following activities: Conducted industry research through publicly available studies and reports. Gathered industry data and statistics from publicly available sources such as the BC Ministry of Forests, Lands and Natural Resource Operations, Statistics Canada and BC Stats, as well as other relevant industry associations. Utilised an economic impact model to estimate the economic impacts generated by the industry and its sectors. Developed case studies based on secondary research to demonstrate the broader social and economic benefits of the Industry. REPORT LIMITATIONS The report is provided for information purposes and is intended for general guidance only. It should not be regarded as a substitute for personalized, professional business or financial advice. We have relied upon the completeness, accuracy and fair presentation of all information and data obtained from Industry and public sources, believed to be reliable. The accuracy and reliability of the findings and opinions expressed in the presentation are conditional upon the completeness, accuracy and fair presentation of the information underlying them. As a result, we caution readers not to rely upon any findings or opinions expressed as accurate or complete and disclaim any liability to any party who relies upon them for business or investment purposes. Additionally, the findings and opinions expressed in the presentation constitute judgments as of the date of the presentation, and are subject to change without notice. MNP is under no obligation to advise of any change brought to its attention which would alter those findings or opinions. BC FOREST INDUSTRY: ECONOMIC IMPACT STUDY MNP LLP
9 3. PROFILE OF THE BC FOREST INDUSTRY INDUSTRY OVERVIEW The BC forest industry is a key contributor to the BC economy and is important to the social fabric and economic well-being of many communities throughout the province. Through its many activities, the industry provides employment and economic opportunities, generates government revenue and develops relationships with First Nations communities. In this section, we provide an overview of the industry and its activities. Forest Regions and Fibre Supply In total, roughly 55 million hectares of BC’s total land base is considered productive forests. These forests provide a diverse and abundant supply of timber. Tree species from BC forests are primarily coniferous, and include douglas-fir, western hemlock, amabilis fir, western red cedar, lodgepole pine and interior spruce. The BC government issues timber tenures, allowing companies to harvest timber in exchange for stumpage fees and forest management responsibilities. 24 The industry is divided into two main regions, coast and interior. The coast region produces a wide variety of high-quality products from larger diameter logs and sought-after species, such as douglas-fir, hemlock and western red cedar. Fibre costs are high in the coast region, and the industry focuses on making products that maximize value from the forest resource. The interior region typically produces structural building products from smaller diameter logs and species, such as spruce, pine and fir. The interior mills compete in global commodity markets, and focus on finding efficiencies, maximizing production and minimizing costs. The interior region produces more than 80 percent of BC’s softwood lumber. 25 By 2016, the mountain pine beetle infestation in the interior region is projected to infect or destroy 58 percent of the merchantable lodgepole pine in the province. As a result of the infestation, there has been a 20 percent reduction in the annual allowable harvest from levels prior to the beetle infestation. A tightening timber supply is projected to lead to higher fibre costs as the industry’s sawmill, panel, pulp and paper, wood pellet and bioenergy operations compete for a reduced supply of timber. 26 Sectors and Size of the Industry BC forest industry operations can be categorised into six main sectors. These are: Primary manufacturing. Forest management. Secondary manufacturing. Fibre supply and wholesale. Forest innovation. Silviculture. In aggregate, the total revenue from these sectors was estimated at approximately $15.7 billion in 2013 27 (Table 1). Approximately 62 percent of this revenue is estimated to have been generated from the interior region and 38 percent from the coast region 28 (Figure 1). The largest sectors were primary manufacturing, forest management and secondary manufacturing, which together accounted for more than 95 percent of total industry revenue. Figure 1: Regional Share of BC Forest Industry Revenue 38% Coast 62% Interior 24 Trade and Invest in British Columbia, available here: http://www.britishcolumbia.ca/invest/industry-sectors/forestry.aspx 25 Council of Forest Industries, Forest Facts, available here: http://www.cofi.org/educationcareers/forest-education-links/forest-facts/ 26 Girvan, J., Hall, M. Van Leeuwen, G., “B.C. Mountain Pine Beetle: Evolving Impacts and Opportunities” International Wood Markets, May 2012. Web April 2013 27 MNP estimate. Please see Appendix B for a description of our calculations 28 Ibid BC FOREST INDUSTRY: ECONOMIC IMPACT STUDY MNP LLP
Page 1 and 2: BC Forest Industry Economic Impact
Page 3 and 4: 3 1. EXECUTIVE SUMMARY The BC fores
Page 5 and 6: 5 KEY FEATURES OF THE INDUSTRY In 2
Page 7: 7 The forest industry is an importa
Page 11 and 12: 11 Figure 2: Relationships between
Page 13 and 14: 13 In total, an estimated 14 millio
Page 15 and 16: 15 4. ECONOMIC IMPACT ANALYSIS ECON
Page 17 and 18: 17 Table 3. Estimated BC Government
Page 19 and 20: 19 Table 5. Largest BC-Based Forest
Page 21 and 22: 21 Primary manufacturing is capital
Page 23 and 24: 23 Total GDP impacts of $1.7 billio
Page 25 and 26: 25 Fibre Supply and Wholesale Highl
Page 27 and 28: 27 Table 12. Summary of Forest Rese
Page 29 and 30: 29 provides summer employment oppor
Page 31 and 32: 31 Employment Comparison As shown i
Page 33 and 34: 33 5. SOCIAL AND ECONOMIC BENEFITS
Page 35 and 36: 35 CASE Innovation - Emergence STUD
Page 37 and 38: 37 CASE STUDY Harvesting The BC for
Page 39 and 40: 39 APPENDIX B - ECONOMIC IMPACT APP
Page 41 and 42: 41 and traditional value-add forest
Page 43 and 44: 43 Step 5: Compare Model Results wi
Page 45 and 46: Volume (cubic metres) Housing Start
Page 47 and 48: Selling Price Index US$ 47 Figure D
Page 49: 49 APPENDIX E - ABOUT MNP For more

bc-forest-industry-economic-impact-study

Create successful ePaper yourself

Delete template?

Save as template?