In the past two years, more than
3800 Albertans have lost their forest industry jobs - about the same number of people living in Alberta towns like Grande Cache or High Level.
Alberta's forest products industry - a renewable resource sector, an $11 billion economic contributor and the steward of our forestlands - faces a crisis.
WHAT CAN YOU DO?
Look for green products: your forest industry offers certified products from sustainably managed forests—buy Alberta wood
Learn more about your forest: your forest industry consults extensively on forest management and land use—join their public advisory committees, visit their open houses, ask questions and share ideas
Lobby for change: ask your government representatives what they are doing to support the forest sector, and all the communities across Alberta that rely on its health
For more information, call the AFPA at (780) 452-2841 or contact your local forestry company.
CATALYSTS TO A CRISIS
An unprecedented mix of challenges has contributed to Alberta's forest industry crisis:
GLOBAL RECESSION
The global financial crash of late 2008 has brought market demand and prices for forest products to historic lows for lumber and panelboard and seen sharp slides in markets for pulp, newsprint and other products.
ERODED COMPETITIVE ADVANTAGE
Alberta has significantly higher costs for energy and utilities, transportation (both road and rail) and labour than other jurisdictions. These disadvantages are magnified by rising municipal tax rates for facilities, machinery and equipment - which penalize innovation and deter capital investment.
HOUSING CRASH
In the past two years, US housing starts have fallen by 66% and Canadian housing starts by about 25%. These numbers are expected to fall further before recovery begins. This serious decline in new home construction has caused record low prices for lumber and panelboard - essential components in house building.
MOUNTAIN PINE BEETLE
Ongoing efforts to combat the mountain pine beetle infestation in Alberta have increased costs to forest companies - as they meet government mandates for harvesting in beetle-infested areas and for beetle control measures. Beetle populations are still increasing in Alberta, causing further threats to Alberta's forest resources and increased costs to forest companies.
CURRENCY FLUCTUATIONS
The Canadian dollar has fluctuated wildly against the US dollar - from a low of $.62 in January 2002 to a high of $1.10 in July 2007. These rapid shifts have significantly impacted the health of the export-dependent forest industry. Each annualized one-cent difference in the Canadian-US dollar exchange rate means a $40 million swing in revenues for Alberta forest products companies.
WHY SHOULD YOU CARE?
A healthy forest industry is vital to all Albertans. Forest companies convert renewable resources into useful products, creating jobs and stimulating economic activity across the province. Even more important, the industry develops and applies environmental expertise that will serve to protect forestlands for all Albertans, for all time.
A Major Economic Driver
Alberta’s forest industry contributes $11 billion to the provincial economy annually. Though the industry is among the most modern and efficient anywhere, the economic downturn has taken its toll, forcing many companies to curtail production and reduce staff to stay in business. Unaddressed, this crisis will ripple through the entire economy, affecting suppliers and contractors; local hotels, restaurants and other businesses; and all levels of government, who together collect $1.4 billion in taxes from forest industry activity.
Diversification Makes Alberta Stronger
The presence of a strong forest industry contributes to economic diversification, fighting Alberta’s boom and bust cycle by helping the economy withstand single sector downturns. Based on renewable resources, the forest industry has limitless potential and will be generating jobs and wealth for our province long after nonrenewable resources such as conventional oil and gas reserves are depleted.
A Sustainable Business
Alberta’s forest industry manages for long-term sustainability, harvesting at levels below natural growth rates and growing two trees for every tree cut. Healthy, well-managed forests not only produce trees to sustain an industry, but also consume and store carbon through their lifespan, protect air and water quality, and provide habitat for wildlife, plants and people.
Stewards of the Forest
A robust forest sector attracts and retains foresters, technologists and others with the scientific knowledge needed to understand and protect forest ecosystems. The forest industry has amassed vast expertise in integrated land management that will be critical to reducing cumulative impacts and protecting long-term sustainability on Alberta’s public lands.
The Green Choice
Consumers are demanding green products, and Alberta’s forest industry is ready to respond. Throughout their lifecycle, wood construction materials—lumber, plywood, oriented strandboard and other products—are the environmental choice over steel or concrete in building and renovation. And the wood wastes generated in their manufacture are used to make the pulp and paper products found in homes and offices around the world, and even to generate some of the electricity that powers our province.
Creating Jobs, Skills and Technology
The forest industry directly employs 40,000 Albertans on a full-time basis and indirectly provides work for many thousands more. Careers in the forest sector are highly skilled and well paid, spanning fields from forestry to engineering, and wildlife biology to information technology. The industry invests in research and development and promotes technological advancement. A healthy forest sector makes Alberta smarter.
CATALYSTS TO A TURN AROUND
Building Relationships and Taking Action
The forest industry is working diligently to maintain and grow relationships with municipal and provincial politicians, administrators and stakeholder groups to pursue actions that benefit both the forest industry and communities.
Forest Industry Workforce Strategy
The Alberta government, in collaboration with industry, completed A Workforce Strategy for Alberta’s Forest Industry. The Alberta Forest Products Association (AFPA) and industry are taking leading roles in implementing this training and development strategy to help meet our future workforce needs.
Sustainable Forest Management Certification
Canada has the largest area of internationally recognized third-party certified forests in the world. In Alberta, 61% of the province’s forestlands are certified, demonstrating the forest industry’s commitment to sustainable forest management. The pursuit of certification helps the industry satisfy the growing global demand for sustainable products.
WHAT’S NEDED?
Given the industry’s importance to Alberta’s economic and environmental health, our governments should work to find ways to help industry weather this economic crisis by:
- placing fewer cost burdens on a struggling industry—increased taxes and regulation hurt;
- building a business environment that helps Alberta’s industries compete globally;
- helping expand markets for Alberta forest products here at home and around the world;
- partnering with industry to pursue new opportunities in bioenergy and bioproducts.
Action on Forest Industry Competitiveness
The Alberta government has commissioned and received reports on the forest industry’s short- and long-term needs. Their recommendations must be acted on to create a business environment in which the forest industry can survive the current downturn and prosper when markets recover.
Rational Municipal Taxation
Reasonable and predictable municipal taxation rates are needed to keep mills running. From 2004 to 2007, municipal taxes paid by the forest industry increased by about 40% per year, while industry sales revenue was decreasing by 36%.
Investments in Infrastructure
Governments must invest in road, rail and utility infrastructure, including resource roads and environmental inventories and programs that are used by multiple industries and that benefit the province as a whole.
Rebalanced Responsibilities
Alberta’s forestlands are owned by government and managed by industry. The forest industry is facing overwhelming regulatory and costs burdens, many transferred from government. Land management responsibilities and costs should be shared fairly.
Expanded Use of Alberta Wood
Governments should expand the use of renewable wood products in all building maximizing use of Alberta-made products in publicly funded buildings, governments can expand the local market for Alberta’s wood products, help keep mills running and keep Albertans employed.
Green Incentives
The federal and provincial governments have a major role to play in encouraging industry action in greenhouse gas reduction, water conservation, carbon sequestration and bioenergy projects that are based on residuals from wood products manufacturing and well-managed forests.