Canada has lost 100,000 forestry sector jobs over the last decade, thanks to a depressed housing market in the U.S., pressure from environmentalists to change its harvesting practices, declining demand for paper and, more recently, the European financial crisis.
Catherine Cobden, CEO of the Forest Products Association of Canada, says there is reason for optimism, however. While in Vancouver to speak to a meeting of the Canadian Council of Forest Ministers recently, Cobden spoke to Business in Vancouver about the organization’s plan – Vision 2020 – to generate an additional $20 billion in economic activity over the next eight years.
Q: What is the Vision 2020 plan?
A: It articulates three goals. The first goal is on environment. It’s a 35% additional improvement on our environmental footprint. On products, we’re currently a $57 billion industry. We hope to generate an additional $20 billion by 2020. The third goal is in the area of human resources. We need to renew our workforce by an additional 60,000 Canadians. We’re currently at 230,000 [52,000 of which are in B.C.].
Q: The B.C. forestry sector has faced some serious challenges over the last few years. What gives you this kind of optimism?
A: We’re very efficient in our operations, so that helps us a lot. The second area of our strategy has been to diversify our markets. We have been working with the provincial governments – B.C.’s been heavily involved – our federal government and the industry to blaze new trails into China.
Twenty-five mills in B.C. alone restarted and added extra shifts, employing hundreds of people, because of the China demand. At the right time, when the U.S. market was collapsing, we’ve been able to see some growth in China. By being able to send $1.5 billion worth of product to China at the time when we had lost our U.S. markets, it was absolutely a lifeline. But they didn’t throw it to us – it came as a result of fairly significant relationship building.
Q: The U.S. is still our most important market. What is the forecast for that market?
A: It’s a slow rebuild, it’s not a big bounce back. We’re definitely seeing some return in that market, and that’s a very good thing.
Q: How does placing a heavier emphasis on environmental issues help the industry become more productive?
A: Being green is a fundamental imperative of the market. If you are greener than your competition, there is a benefit there. Also, if you are working in a collaborative model rather than a boycott model, there’s obviously a benefit there.
Q: The pulp and paper industry is going through some dramatic contractions. There are fears that one or more of Catalyst Paper’s three mills in B.C. could close. Has the bleeding stopped yet?
A: We have lost many, many jobs across the country, but we do believe we’re through the worst of it. Some of the challenges we’re facing are structural decline in key markets, not in pulp but in paper. The structural decline in the paper market is a global phenomenon. The opportunity to figure out ways to make other products in those mills is what [will make] them more economic and protects jobs.
Q: We’ve had two sawmills go up in flames in recent months, and it is suspected that the problem is the sawdust from pine beetle kill, which is very dry and therefore more combustible. What is the industry doing to address the problem?
A: The industry leadership is seized with this problem. This is a top priority issue. The coal industry and flour industry have a lot more experience in handling highly combustible dust, so we’ve been working with them already to understand best practices and adopt them in the mills.
Q: B.C. is facing skilled-labour shortages. What are some of the challenges for the forestry sector?
A: It would be very hard to attract youth and new employees to our sector if they thought we were a sunset industry. So it’s extremely important to communicate that we’ve turned a corner and have a whole pile of potential.
Q: What are some of the alternative uses for forests that are emerging, besides lumber, pulp and biomass?
A: We believe we can do a lot more things with the trees we cut. Lumber, pulp – all of those things are core. But you can – through the adoption of new technologies – now do much more than just produce green energy. Green energy [biomass power] is a definite opportunity, but it’s kind of a first step. Green biofuels, biochemicals and other green products are the longer-term evolution. We’ve identified a $200 billion marketplace for biochemistry. •
