Forest Sector and Valued-added Products:

With vast tracts of forest area, Northern Ontario continues to support a vibrant forestry industry. More value-added production can increase the volume and range of forest exports from the North.

Profile:

Ontario's forest resources cover 690,000 square kilometres -- 17 percent of Canadian forests and two percent of the world's forests. In 2003, the value of Ontario's forest products exports was estimated at $8.5 billion. Ontario exports are predominantly primary or commodity products such as newsprint, market pulp, lumber and composite panels.

Ontario's forest product industry makes a significant contribution to the provincial economy. In 2001, the forest products sector shipped approximately $18 billion worth of forest products. Wood product industries accounted for $5.7 billion of that total, while paper and allied industries amounted to $11.1 billion. The balance of $1.2 billion, was the value of logging activity within the province.

The Northern Ontario boreal forest accounts for 76 percent of the province's woodland and supports most of Ontario's forest industry. Northern Ontario is home to 16 of the province's 33 pulp and paper mills and accounts for all of Ontario's annual market pulp production (approximately 1.9 million tonnes). Ontario's 25 largest sawmills produce 80% of the province's lumber. Twenty-two of these sawmills are located in the North. Northern Ontario also produces approximately 70% of the province's newsprint (1.2 million tonnes).

Source: Ontario Forest Products Where Investment Opportunities "grow on trees" & Ministry of Natural Resources Ontario's Forest Industry

The forest products industry in Ontario employed 88,000 people in 2003. This included 3,000 in forestry services, 6,000 in logging, 37,000 in the wood industry and 42,000 in paper and allied products.

A major contributor to North's economy, the forest industry employs at least 20 percent of the labour force in as many as 50 communities, mostly located in Northern Ontario. Nearly one-third of northern communities are highly dependent on the forest industry with the most prominent districts being Thunder Bay, Cochrane, and Kenora. In 2000, Ontario's Northwest region was named Forest Capital of Canada.

Of the $1.4 billion spent on major capital improvements in the Ontario forest industry since 1995, approximately 90 percent was associated with projects in Northern Ontario. These include environmental controls, effluent treatment facilities, and upgrading of mill machinery to improve quality and efficiency.

About 90 percent of Ontario's woodlands are publicly owned. Of the total forest area, about 560,000 square kilometres of Ontario's forest area is considered productive forest and 329,000 square kilometres of this area is licensed for harvest. The Ontario Forestry Accord, signed with the forestry industry and environmental organizations in 1999, sets the stage for new wood fibre sources to be developed. Most of the unallocated forest area is in Ontario's Far North.

Opportunities:

Continued high demand for timber and forest products

The Food and Agriculture Organization of the United Nations predicts a 56 percent increase in global industrial timber demand between 1993 and 2010.

Demand for paper and pulp is also expected to outstrip supply despite significant increases to paper and pulp capacity globally. New paper-making capacity in other countries is not expected to seriously challenge the North's newsprint and higher value-added papers sector because of the high quality softwood fibres in Northern Ontario.

Value-Added Forest Products

Northern Ontario offers excellent investment opportunities in secondary product manufacturing. Investors can take advantage of the large production capacity of primary manufactures of solid wood and pulp and paper products.

The forests of Northern Ontario are managed to internationally recognized standards of sustainability, and the quality of the wood fibre produced is excellent. The region is strategically located, providing access to major world markets. The United States, especially the Great Lake States, is a key market for Ontario wood and paper products. Emerging markets in Mexico and Chile also offer unique opportunities for Ontario based forest product companies.

The forest products industry in Northern Ontario is continuously adapting to maintain its competitive position in the global marketplace. Companies are looking toward value-added products such as engineered wood, speciality papers, and pre-fabricated buildings and components.

Ontario's forests also offer significant opportunities for specialized products derived from non-timber forest resources. Producers of nutraceuticals, pharmaceuticals, gourmet/speciality foods, naturopathic products and consumer goods benefit from the advantages of locating in Northern Ontario.

Forest research centres in Northern Ontario, such as the Great Lakes Forestry Centre, the Ontario Forest Research Institute, and the Centre for Northern Forest Ecosystem Research, complement the many academic institutions offering forestry related programs.

In addition, northern forest industry communities offer modern infrastructure, an ample supply of skilled labour, and provide an outstanding quality of life for residents.

Did you know...

In 2004, Tembec Industries planted its 250 millionth tree in the Gordon Cosens Forest, Kapuskasing, near Timmins, Ontario, as part of the company's ongoing sustainable forest initiative. Today, Tembec's engineered wood products are increasingly popular because of their versatility, flexibility and workability versus steel and concrete-not to mention being environmentally friendly as a renewable resource.

Trus Joist, a Weyerhaeuser subsidiary, recently opened a $250-million state-of-the-art engineered-wood plant in Kenora.

A Focus on Sustainable Development

The government's land use strategy, adopted in July 1999, is focused on the protection and sustainable management of Ontario's natural resources. A key component of the strategy is the Ontario Forest Accord, which provides long-term security for resource-based industries and fosters a business climate that attracts investment and encourages growth. The accord is a precedent-setting approach by government, the forest industry and the environmental community to work together in establishing new protected areas while considering the needs of the forest industry for a sustainable wood supply. Also part of the government's land use strategy is a five-year, $7-million commitment for data collection and research on increased timber utilization, tree improvement and intensive silviculture.

Resource Stewardship Agreements between the resource-based tourism industry and the forest industry will also help the economy by providing greater certainty about available land base. This in turn means more long-term investment security.

A Wealth of Expertise

Opportunities also exist to export environmental technologies and research and development in silviculture, forest management and stand production. Forest research centres in Northern Ontario such as the Great Lakes Forestry Centre, the Ontario Forest Research Institute and the Centre for Northern Forest Ecosystem Research focus on understanding forest ecosystems and advancing sustainable development. This research has improved Northern Ontario's competitiveness in the forest industry, led to innovations that safeguard Northern forests, and established the region as an international leader in sustainable forest management.

Ontario is also world-renowned for fire management expertise. Four Northern Ontario communities recently provided training in air attack and ground-based forest fire management to senior fire managers from the People's Republic of China.