Ontario's Forest Industry

Introduction

In Ontario, there are a wide variety of coniferous and deciduous trees that support a healthy forest-products industry.

For the past 100 years, Ontario has supplied world markets with a growing array of high quality forest products from pulp and paper to lumber and veneers.

Forests have always had a central role in the cultural, economic and social development of Ontario. Ontario’s Aboriginal people depended on the forest for their food, shelter and clothing as well as for their spiritual needs. When the Europeans first arrived, they viewed the forest as a source of furs or an obstacle to agriculture and industry. As time went on, the forests of Ontario were used as a source of wood for the development of the great European navies of the 18th and 19th centuries.

In the 20th century, the forest supported the rapid development of the pulp, paper, veneer and sawmill industries. Today, Ontario’s forests play a critical role in the province’s economy. They contribute to a good standard of living by supporting more than 81,000 direct jobs in the forest industry. Another 324,000 people in 260 communities throughout Ontario owe their livelihood to Ontario’s forests. These jobs include employment in forest-based tourism businesses, fishing and hunting, equipment manufacturing, transportation, trapping and retail and service industries,

Forest Sector Industries

Ontario's forest products companies are leaders in sustainable forest management. Through effective government regulation and company initiatives, Ontario's forest products companies are in an excellent position to meet emerging international standards of forest sustainability and environmental protection.

Ontario has a forest products industry comprised of the logging industry and two major forest sector industries: the wood products manufacturing industries, and the paper and allied industries.

The logging industry is made up of both large and small contractors, as well as large, mill-owned operations. The contractors may work independently or directly for company-owned mills.

The wood products manufacturing industries include businesses such as sawmills, veneer mills, and structural board and lumber plants producing construction materials and specialty wood products. Pulp and paper mills are the largest types of plants for converting timber fibre to forest products.

Mills that use more than 1,000 cubic metres of timber must obtain a facility licence from the government. There are about 192 such licensed facilities in Ontario.

Licences

In Ontario, forest industry companies gain access to timber supplies through Forest Resource Licences. The larger licences are referred to as Sustainable Forest Licences (SFL), which are in effect for 20 years. They are renewed every five years based on results of independent reviews. Licences require forest products companies to collect information, prepare forest management plans, implement and monitor forest operations, protect the environment, construct access roads, and pay a price for the forest resources they harvest. More...

Crown Timber Charges

In Ontario forest products companies pay a stumpage fee to the Crown for every cubic metre of timber harvested. A market-based pricing system is used by MNR to calculate the stumpage fees that companies and individuals pay. When market prices are strong for forest products, the stumpage system charges higher fees. In times of poor market prices, harvesters pay lower fees.  

Sustainable Forest Management

Ontario’s forest products companies must insure sustainable forest management. Effective government regulation and company mandates are putting Ontario’s forest products companies in a position to independently meet international standards of forest sustainability and environmental protection, which is an increasingly important factor in the forest products marketplace. Ontario is committed to forest policy and legislation that ensures sustainable forest management. On April 1, 2004, the Minister of Natural Resources announced his intention to require that all Sustainable Forest Licence (SFL) holders be certified to an accepted performance standard by the end of 2007. To date 31 of Ontario’s 47 SFLs have been certified. More...

Keeping Ontario Open for Business

Ontario's forest products sector makes a significant contribution to the provincial economy. In 2005, the forest products sector shipped over $18 billion worth of forest products. Wood products industries accounted for over $6.0 billion of that total, while paper and allied industries amounted to over $10.0 billion. Logging activity in Ontario was valued at approximately $2 billion.

The sale of forest products abroad is also important to the province's balance of trade. In 2006, the value of forest products exports, primarily to the United States, was $6.9 billion and its contribution to Ontario’s balance of traded was $1.4 billion. The main products being exported are softwood lumber, wood pulp and newsprint.

Many communities in northern Ontario depend on the forest industry. However, thousands of jobs in southern Ontario also depend on forest products such as paper, lumber and other by-products. The industry continues to diversify and evolve through better use of timber and timber by-products and value-added manufacturing. Products such as medium-density fibreboard and oriented strand board have added to this diversification.

In addition to being a major employer, the forest industry makes significant investments in capital improvements and mill expansions each year. In 2005, capital expenditures by the forest industry totalled about $1.2 billion.

The following chart illustrates recent significant capital investments made in the province.