Addressing Economic Sustainability Challenges

With New Forest Products Overview of Canada’s approach

Glenn MasonDirector General – Policy, Economics and Industry Branch

Canadian Forest Service

Presentation Overview Economic context

Forest Sector economic importance in Canada Changes and challenges

Focus on innovation Diversified forest products for the Green Economy The biorefinery model: Increasing the efficiency of

the sector New products:

Emerging and breakthrough technologies Supporting increased use of wood in buildings

Market Access and Acceptance

Canadian Forest ServiceStrategic Priorities

Support Forest Sector Competitiveness Driving sector transformation through innovation and

market expansion

Optimize Forest Value Optimizing the socio-economic benefits from forests to

industry and communities

Advance Environmental Leadership Creating competitive advantage through strong

environmental performance

Healthy Economics Needed

Sustainable forest management is an interplay between three realms:

Environment

Society

Economy

Economic Context – Importance of Forest Sector in Canada Economy

Contribution to GDP: 1.9% Exports: $26.4B (+$17.2B to balance of trade)

Exports Three of Canada’s top 15 exports are forest products:

Softwood Lumber: $5.2 B Pulp: $7.5 B Newsprint: $2.8 B Other paper: >$7.0 B

Employment 234,000 forest industry jobs in all regions of Canada

Major aboriginal employer About 200 communities are highly dependant on forest

sector

Economic Context – Change and Challenges Structural changes

Canadian dollar appreciation Decline in North American newsprint demand Increased competition internationally

Short term challenges Collapse of the US housing market Slow recovery from the global recession

Impacts major forest firms in financial difficulty large number of mill closures Important jobs losses

Focus on Innovation – Forest products for the Green Economy

High value products

A “Green” alternative

Lumber

Paper

Market Pulp

Products

GWD/TMP

Kraft

Processes

Sawmill

Forest

“Primary”“Secondary”

Energy

Black liquor

BiomassBoiler

Bark

Bark

Bark

BiomassSteam

Sawdust

Boards

BiorefiningBiofuels

Biochemicals & Lignin

Bio-ethanol, bio-diesel

Biochemicals

By- & 2°-products burning

“Future”

Lign

in &

cel

lulo

se

Residuals

Chip

s

Integration of new processes within existing traditional mills

Focus on Innovation – Increasing economic efficiency: The Biorefinery Model

Diversification including chemicals and energy from residues

Result in greater efficiency, new revenue streams

Focus on Innovation – Emerging and Breakthrough technologies: Nanocrystalline Cellulose

Focus on Innovation – Increasing the use of wood in buildings: Cross-Laminated Timber

Market Access and Acceptance

Proactive approach toward appropriate recognition of forest products in: Laws and regulations Codes and standards Environmental rating systems Ecolabels Green building initiatives Procurement policies Renewable energy initiatives

Comments and Questions Welcome!

A vibrant forest industry is able to take its rightful place in the Green Economy