The federal government needs to offer money, training and incentives to ensure a technological revolution in the forestry industry creates well-paid jobs at home rather than abroad, according to a new study Natural Resources Canada commissioned to find ways to support Canada’s billion-dollar forestry-equipment sector.
Canada’s traditional forestry products — softwood lumber and pulp-and-paper — have struggled in recent years, as American housing construction fell sharply after the 2008 global meltdown and as more consumers get their information digitally rather than on paper.
The bio-fuels and biomaterials industries, which provide new uses for wood fibre, offer fresh opportunities for Canadian producers to make up for the losses — but the high-tech equipment to produce them is increasingly coming from abroad.
The entire forest sector in Canada saw net operational losses in 2008 and 2009, and still has not recovered to pre-recession levels. Quebec alone has seen the loss of some 30,000 jobs since 2008.
A report by Groupe DDM says Ottawa and the provinces should start offering incentives for mills to buy Canadian technology rather than looking to foreign manufacturers.
The federal government also needs to provide more worker training, and to finance marketing campaigns to help sell these new high-tech Canadian products to more customers.
Forest Equipment Funding
A copy of the $76,000 study was obtained by The Canadian Press. There are an estimated 365 Canadian firms in the forestry-equipment manufacturing sector, employing more than 57,000 people and worth about a billion dollars annually.
Canada’s traditional expertise is in sawmill-equipment manufacturing, but many firms have struggled in the wake of the American housing downturn.
Even with recent improvements in housing construction south of the border, and rising demand from China, South Korea, India and elsewhere, the sector remains battered, according to the 38-page report.
“One of the Canadian anchor forest industries, the sawmill equipment manufacturers, finds itself in a dire situation, as their traditional customers, saw mills, do not seem capable of investing and upgrading their assets.”
“One of the reasons comes from the fact that lenders have been recently hurt by the sector and commercial credit has become hard to obtain.”
The authors suggest Ottawa should help these struggling manufacturers get better access to bank credit.
A spokesperson for the department says officials are still reviewing the findings.