Forest Sector and Valued-added Products:

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).

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.

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.

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.

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.