If a job falls in the forest, does it make a noise?

The reduction in employment in Canada’s forestry industry has been profound in the past two decades.   In 1992, there were over 77,000 people working directly in the forestry sector (not including downstream processing, transportation, etc.) and now it is down to under 39,000.  In New Brunswick, the decline – on a relative basis has been slightly less steep but because we started with a higher base it’s actual impact has been higher.

As shown below, in 1992, there were nearly 18 workers in the forestry sector for every 1,000 in the economy as a whole.  That had dropped to 13 in 2002 and to 7.9 in 2012. In 1992, NB had 2.5 times as many people working in the forestry compared to Canada as a whole and now it is actually up to 3.1 because of the decline elsewhere.

The good news here is that output has rebounded and the value of exports is increasing again.  The industry is smaller but much more productive.   As you can see from the second table below, it takes 9.5 full time equivalent jobs (direct and supply chain) to generate $ 1 million of direct industry output in New Brunswick considerably lower than both Nova Scotia and Quebec and similar to Ontario.  British Columbia sets the pace in Canada for labour market productivity in forestry and logging.

The key here is that the industry is still a substantial economic driver for New Brunswick and will continue to be.

 

 

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One Response to If a job falls in the forest, does it make a noise?

  1. mikel says:

    Before you tout the ‘good news’, do you actually have numbers on royalties and taxes that have been generated with ‘higher output’? Somebody can check, but I used to read the budget and don’t remember forestry royalties climbing or even growing. So just because a few people are making more money off their business, I don’t see any good news when employment is sinking. I think it goes without saying that that brings into question whether it will “continue to be” a “substancial economic driver”. IF royalties stay the same, then the amount the government gets doesn’t change. Its POSSIBLE this may lead to more corporate income tax as output develops, but there are lots of links between those so its not a definite thing. Taking an extreme example, say technology makes it so that ONE GUY can remotely drive the equipment which pushes down the trees, harvests them, then turns them into value added products. That doesn’t bode well for the industry because you only have ONE JOB. Granted there are people who need the make the equipment, but its a pretty safe bet they won’t be local or even regional. I remember researching ten years ago and finding that NB had the lowest number of workers per acre of forestland, including PEI. In short, give me an ‘inefficient’ industry that employs a lot of people anyday over an efficient one with hardly any.

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