Outlook, Advantages, and Challenges
Forestry... (cont’d)
wood product and pulp and paper exports have been
especially notable in the case of the Chinese marketplace.
Higher Wages and Employee Benefits
All elements of the forest sector are high-productivity
industries and thus generally pay above-average wages.
As is evident in Figure 6, the different parts of the forestry
sector are among the highest-paying industries in the
province. The total compensation per job in the pulp
industry is among the very highest and is more than
double the all-industry average. Total compensation in the
forestry and logging sector is close to that of pulp mills.
Wood products manufacturing also pays excellent wages
– more than 50% higher than the all-industry average.
The majority of jobs in the BC forest sector are located
outside the major population centres. These jobs provide
vital sources of income for families who reside in smaller
communities. More and more younger households are
being pushed out of the Lower Mainland because of
high housing costs or because they are looking to live
in communities where lower home costs mean a higher
standard of living. Forest sector jobs provide an attractive
alternative and also help to support local employment in
other industries as well.
Total Compensation per Job
by Industry, 2013
$
120,000
100,000
80,000
60,000
40,000
20,000
Min
ing
Pulp
m
& o fg
il &
For.
gas
&
Wo loggi
od p
n
rod g
.
F i n . mfg
& in
su
Mfg r.
. (a
ll)
Pro
C
o
n
f. &
st r
Tran tech. s .
e
spo
rt. & rv.
wa
Edu re.
c. se
All
ind rv.
us
Re t t r i e s
ail t
rad
e
0
Figure 6
page 12
|
Source: Statistics Canada.
I N D U S T R Y U P D AT E
The BC forest products cluster is in the midst of an
upswing that should persist for several more years. British
Columbia is well known for its sustainable practices and
sound stewardship of the forest resource. The industry is
also advancing partnerships with First Nations and is an
important source of jobs and income for many Aboriginal
individuals in the province.
However, forestry in BC also faces many challenges.
Because of the mountain pine beetle, the absolute size
of the industry is set to contract in the coming years. BC
is also a complex jurisdiction in which to operate. Among
other things, BC has unsettled First Nations land claims,
often cumbersome environmental regulations, complex
and lengthy permitting processes, and rising operating
costs. The BC carbon tax, steadily escalating power costs,
and hundreds of millions of dollars of extra production
and operating costs for forest products companies as
a result of the shift back to the Provincial Sales Tax in
2013 have all weighed on new investment in the sector.
Some BC forest product companies also suffer from
what is widely recognized to be punitive municipal
property taxation on their capital-intensive manufacturing
facilities. Ongoing trade disputes with the US are another
longstanding challenge for the BC sector. For these and
other reasons, certain US jurisdictions have become
increasingly attractive investment locations for some BC
forest products companies.
In spite of a complex operating environment and some
erosion of the province’s overall competitive position,
the forest products cluster remains one of BC’s most
powerful economic engines. It provides a vital foundation
for jobs and economic activity for dozens of communities
spanning every region of the province. While the fallout
from the pine beetle infestation may limit the prospects
for future growth, forestry is not a sunset industry. Rather,
it is a mature, sophisticated, high-productivity industry
that supports many communities, buys billions of dollars
of local supplies, services, and other inputs, and remains
one of the province’s leading sources of high-paying jobs.
Jock Finlayson is the Executive Vice President and
Chief Policy Officer of the BC Business Council. Ken
Peacock is the Chief Economist