Fall 2017 Executive Summary Canadian forests are the foundation of our natural heritage, our national identity, and economy. With the third-largest forested area in the worldi, Canada represents 9% of world’s forests and 24% of the world’s boreal forests, with approximately 348 million hectares of sustainable forests. Accounting for 55 million hectares of public forest land, British Columbia (BC) is a world leader in sustainable forest management, is home to more than 7,000 sector-related businesses, and employs 66,918 people across the province.1 The forestry sector in BC is one of the world’s largest exporters of wood products contributing to 36% of BC’s total exports for 2015 and accounting for $12.9 billion in revenue (up 29% from 2011).1 This profile examines the forestry sector in the province, and explores its contributions to the Columbia Basin-Boundary region. This report looks specifically at the following indicators:    Forest sector establishments; Economic contributions; and Employment within the forestry sector. The following page presents relevant sector highlights. This document was updated November 3, 2017. i Russia accounts for 22%, Brazil 12%, Canada 9%, USA 8%, China 5%, and the rest of the world accounts for 46% of the world’s forests.6 Forest sector establishments The Columbia Basin-Boundary region is home to approximately 246 forestry related businesses.2 Additionally, it is estimated that 22 primary forest products manufacturing facilities (10% of provincial establishments) are located in the Columbia Basin-Boundary region.3 Cranbrook has the most forestry related businesses in the region, followed by Nelson, Golden, and Nakusp. Economic contributions As an economic contributor, in 2016 the sector contributed $218,755 million to the total BC Gross Domestic Product (GDP), accounting for 3.4% of the total provincial GDP.4 Forest sector exports in 2016 totalled $39,011 million.4 Forestry in BC is comprised of 55 million hectares of public forest land, 52 million hectares of which is certified.15 The Interior produces more than 80% of BC’s softwood lumber, accounts for half of the province’s pulp and paper production, and 74% of BC’s timber harvest volumes.5 Employment within the forestry sector Forestry makes a significant contribution to British Columbia’s economy and employs approximately 66,918ii people province-wide (up 0.6% from 2014 and 18% from 2009)5 and accounts for 2.8% of the total employment in BC in more than 7,000 forestry-related businesses in over 140 rural communities.1 A total of 134,700 job openings are expected in BC’s South East region, which includes the Columbia Basin-Boundary, by 2025.iii,6 Three in ten openings in the forestry sector are due to economic growth and the remainder (70%) are required to replace retiring workers. This is in keeping with the forecast provincially across all sectors which anticipates that by 2025, 69% of all job openings will be due to retirements and deaths.6 Silviculture and forestry workers (National Occupation Classification - NOC code 8422) are in the top 10 occupations forecasted to expand the fastest in the South East region at a rate of 2.8%, and is the only forestry related occupation listed in the top 10.6 Projected job openings in the Kootenay Development Region are highest for transport truck drivers, heavy equipment operators (except crane), and heavy-duty equipment mechanics. Occupations in the forestry sector with the highest, sustained demand in the South East Region between 2015 and 2025, include transport truck drivers, heavy equipment operators (except crane), construction managers, and heavy-duty equipment mechanics. ii Includes private and public sector employees. The South East region includes the Thompson-Okanagan and the Kootenay Development Regions. Note that while the Kootenay Development Region does not match the Columbia Basin-Boundary region it covers the majority of the region except for Valemount which is located in the Cariboo Development Region. iii Lab ou r Ma r ket Pr of i l e: Fo re s t ry 2 Fal l 2 0 1 7 Introduction This report is part of a Social Sciences and Humanities Research Council of Canada (SSHRC) funded project entitled, Regional Workforce Development in Rural BC. The purpose of this profile is to identify current forestry sector market trends and issues, including current and projected labour market needs to help workforce development partners within the Columbia BasinBoundary region understand and respond to changing labour market demands. This forest sector labour market profile identifies characteristics that comprise the BC forest sector, including performance in terms of production, and contribution to the regional economy. The guiding research questions include: 1. 2. What is known about the forest sector within the Columbia Basin-Boundary region and how does the region compare provincially and nationally? What are the current and projected labour market needs for the Columbia BasinBoundary region? Methodology The Forestry Labour Market Profile was prepared by reviewing the following sources (see Appendix A: References and Resources):  Industry research of publically available studies and reports;  Industry data and statistics collected from publically available sources such as Statistics Canada, BC Stats, Natural Resources Canada, The Ministry of Forests, Lands and Natural Resource Operations, as well as other relevant industry associations;  Secondary research documents, such as forestry plans, situation analyses and various regional economic studies; and  Labour Force Survey purchased through Statistics Canada. Data related specifically to the labour market for the forestry industry was selected, as well as economic data that illustrates the status of the labour market. Additional information on a sector in the Columbia Basin-Boundary region may be available as part of the State of the Basin report prepared by the Columbia Basin Rural Development Institute. Statistics are not frequently reported for the Columbia Basin-Boundary region making it challenging in some instances to report on statistics for the Columbia Basin-Boundary in its entirety. For instance some data is collected at a Development Region level and the Columbia Basin-Boundary covers three Development Regions: Revelstoke and Golden in the Thompson-Okanagan region, Valemount in the Cariboo region, and the entirety of the Kootenay Development Region (see Figure 1). In other instances, data is reported for the South East region, including the Thompson-Okanagan and Kootenay Development Regions, but excludes Valemount. Figure 1: BC Development Regions as defined by Work BCi,7 This report was researched and prepared between January 2, 2017—May 31, 2017. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 3 Fal l 2 0 1 7 The Columbia Basin-Boundary Located in the southeast corner of British Columbia, the Columbia Basin-Boundary region (see Figure 2) includes the Regional Districts of East Kootenay, Central Kootenay, Kootenay Boundary, in addition to Revelstoke, Golden, Valemount and Columbia Shuswap Regional District Areas A and B. With an approximate land area of 83,171 square kilometres, the region accounts for 9% of the size of British Columbia, and is abundant with valleys and mountain ranges including the Purcells, Selkirks and Monashees. Figure 2: The Columbia Basin-Boundary Region8 With a regional population of 162,900, it accounts for 3.5% of the provincial population.9 The overall population is aging and while different communities have different population projections the overall regional population projection is steady with no large gains or losses.9 The economy is primarily resource-based with forestry and mining as key economic drivers. The region’s hydro-electric power generation accounts for approximately 44% of electricity generated in the province and the region is home to British Columbia’s largest coal fields.10 The Columbia Basin-Boundary region is also amenity-rich, supporting a vibrant tourism industry. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 4 Fal l 2 0 1 7 The labour market in the Kootenay Development Region is currently strong with the second highest job growth of the seven development regions reported between 2010-2015 (3.5%).10 However, while 54.2% of residents have some post-secondary education, only 5.1% have a university certificate, diploma, or degree above a bachelor’s degree, and 9.9% have a university bachelor’s degree.11 These are both lower than BC and Canada, where in BC 8.1% have a university certificate, diploma, or degree above a bachelor’s degree, and 14.0% have a university bachelor’s degree. For Canada, it is 7.5% and 13.3% respectively.11 It is important to note that provincially more than 78% of all future job openings will require post-secondary education, including 36% that will require a bachelor's, graduate or first professional degree and/or significant work experience.6 The unemployment rate in the Kootenay Development Region in March of 2017 is 6.4%.12 Characteristics of the Forestry Sector Forestry in Canada Canadian forests are the foundation of our natural heritage, our national identity and economy. With the third-largest forested area in the worldiv, Canadian forests are a key contributor to the Canadian economy. Canada represents 9% of world’s forests and 24% of the world’s boreal forests: approximately 348 million hectares of sustainable forests. The forest industry is an export-oriented manufacturing sector, accounting for almost 7% of all Canadian exports in 2015 ($32.7 billion).13 Traditional forest products form the backbone of the Canadian forest sector and Canada is the world’s largest producer of newsprint and northern bleached softwood kraft pulp and one of the world’s largest producers of softwood lumber.14 As shown in Figure 3, the forest sector contributed 22.1 billion (1.2%)13 to Canada’s gross domestic product (GDP) in 2015, and generated 201,645v13 jobs nationally. Although it contributes less to the total GDP than other resource sectors do, the forest sector creates more jobs and contributes more to the balance of trade for every dollar of value added than do the minerals and metals or the energy sectors.13 iv Russia accounts for 22%, Brazil 12%, Canada 9%, USA 8%, China 5%, and the rest of the world accounts for 46% of the world’s forests.6 v 9,500 of these jobs were located in Indigenous communities. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 5 Fal l 2 0 1 7 Nominal GDP (billions of dollars) $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 Wood product manufacturing Pulp and paper manufacturing Forestry and logging $5.00 $0.00 Figure 3: Canadian forest industry’s GDP, 2005-201513 Forestry in BC Forestry in BC is comprised of 55 million hectares of public forest land, 52 million hectares of which is certified.15 The forest sector has long been a cornerstone of economic activity and continues to be the foundation of BC′s economy. The sector consists of a number of separate, but inter-connected activities such as planning, planting, and forest management; road-building and harvesting; wood product manufacturing (primary and secondary); pulp, paper and biorefining; and forest product marketing.4 The forest sector in BC is primarily comprised of small businesses in forestry and logging operations, many of which are independent contractors with a small number of employees. Independent operators typically contract their services to forest tenure holders, mostly for the purpose of harvesting timber and hauling logs for processing and manufacturing. Much of the work is specialized, mostly seasonal, and takes place on variable work sites, contributing to a degree of irregular and part-time work. In contrast, regular and full-time employment is much higher among forest product manufacturers, as these businesses are operated year-round in permanent locations. An important feature of BC’s forest sector is that it is integrated. The logging and harvesting industry and forestry management (replanting and managing forests) feeds into the lumber and other wood products industries. At the same time, the by-products from wood manufacturing (as well as lower-quality logs) provide fibre for BC’s pulp and paper industry (see Figure 4). Lab ou r Ma r ket Pr of i l e: Fo re s t ry 6 Fal l 2 0 1 7 10% Pulp & paper manufacturing 16% Wood manufacturing 26% Forestry & logging 48% Support activities for forestry Figure 4: BC forest sector by industry16 Additionally, the sector is made up of various public and private entities, including forestry and logging companies, manufacturers of wood and paper products, suppliers of commercial equipment and professional services, regulatory agencies, land use planners, forestry schools and colleges, research institutes, and other non-government organizations. The BC forest industry is divided into two main regions: the Coast and the Interior—each unique in terms of growing conditions, climate, topography, timber species, and industrial operations. The Coastal region encompasses the regions of Vancouver Island and Coast, Lower Mainland, and Southwest and North Coasts. These regions produce high-quality products of large diameter logs from Douglas-fir, Hemlock, and Western Red Cedar. Fibre costs are high in the Coast region, and the industry focuses on making products that maximize values. The Interior region primarily produces products from smaller diameter logs from Spruce, Pine, and Fir and includes the Nechako, Northeast, Cariboo, Thompson-Okanagan, and Kootenay Development Regions. The Interior produces more than 80% of BC’s softwood lumber, accounts for half of the province’s pulp and paper production, and 74% of BC’s timber harvest volumes (see Figure 5).5 26% Coast Interior 74% Figure 5: BC forest harvest volumes: Coast & Interior regions, 20155 Lab ou r Ma r ket Pr of i l e: Fo re s t ry 7 Fal l 2 0 1 7 Forestry makes a significant contribution to British Columbia’s economy. The sector employs approximately 66,918vi people province-wide (up 0.6% from 2014 and 18% from 2009)5 and accounts for 2.8% of total employment in BC (see Table 1) in more than 7,000 forestry-related businesses in over 140 rural communities.1 Employment Growth (Average Annual Rate) Employment 2016 Number of workers 11,971 Share of BC 0.5% 20162020 1.10% 20202025 0.30% Forestry & logging Wood product manufacturing 36,038 1.5% -1.0% -1.6% Paper manufacturing 9,216 0.4% -1.6% -3.4% Support forestry activities 9,693 0.4% 0.6% -0.2% Total 66,918 2.8% -0.9% -5.2% BC all industries 2,332,051 100% 1.20% 1.20% Table 1: Industry employment & job openings in BC, 2015-2025vii, 17 Job Openings 2015 - 2025 Number of job openings (10yr sum) 2,294 Share of BC 0.20% 6,178 0.7% 927 0.1% 3,091 10,196 933,618 0.3% 1.3% 100% 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Agriculture, forestry, fishing and hunting Mining, quarrying, and oil and gas extraction Utilities Construction 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Manufacturing 2005 Millions of Chained (2007) Dollars As shown in Figure 6, the agriculture, forestry, fishing, and hunting goods producing industry is fourth largest contributor to the provincial GDP. The BC Jobs Plan: 5-Year Update reports forest products account for 36% of BC’s total exports for 2015, accounting for $12.9 billion in revenue in 2015 (up 29% from 2011).1 Figure 6: BC GDP by goods producing industry - NAICS aggregations, 2005-201518 vi vii Includes private and public sector employees. Does not include indirect employment statistics. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 8 Fal l 2 0 1 7 As an economic contributor, in 2015 the sector contributed $7,190 million to the total BC GDP (up 2.9% from 2014)4 (see Table 2). Forest Sector 2011 ($) 2012 ($) 2013 ($) 2014 ($) 2015 ($) Forestry & logging 1,787.60 1,833.40 2,008.30 1,819.30 1,906.80 Support activities for forestry 586.8 577.3 615 630.7 696.2 Wood product manufacturing 2,773.50 2,971.00 3,147.60 3,246.30 3,397.10 Pulp, paper & paperboard mills 1,179.20 1,053.90 1,005.70 1,101.20 1,089.80 Converted paper product mfg. 95.30 106.90 98.50 96.50 100.60 Total Forest Sector 6,422.40 6,542.50 6,875.10 6,894.00 7,190.50 Total BC GDP 188,788.90 193,667.20 197,400.90 203,067.30 209,110.30 Table 2: Forest sector gross & total BC domestic product in millions of chainedviii 2007 dollars, 2011-201519 Countries Regarding BC forest product exports and balance of trade, BC is in a surplus. The United States of America (USA) was BC’s largest market in 2015 valued at $6.1 billion (+10.8% increase from 2014). Exports to China were valued at $3.7 billion (-1.6% from 2014) (see Figure 7).20 Other export markets United States Taiwan South Korea South and Central America Oceania Middle East Japan India European Union China Africa $0.49 $6.00 $0.20 $0.35 $0.11 $0.13 $0.06 $1.18 $0.07 $0.45 $3.69 $0.00 $- $4.00 $8.00 Billions Figure 7: Total exports of primary wood products, pulp & paper, & wood-fabricated materials 2015 ix,20 The ongoing softwood lumber trade dispute with the USA will impact the forestry industry in BC. The impacts remain to be seen as forestry companies respond and adjust to duties imposed by the U.S.21 Forestry Sector Classifications: NAICS viii Chained dollars is a methodology implemented by Statistics Canada which takes into account fluctuations in relative prices and the composition of output over time. In "Canadian Industry Statistics", Gross Domestic Product at basic prices by industry is presented in chained dollars.33 ix Note: Figure 5 represents the ‘balance of trade’ as the difference between the value of the goods and services that a country exports domestically and the value of the goods and services that it imports. If a country’s exports exceed its imports, it has a trade surplus. If its imports exceed exports, the country has a trade deficit. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 9 Fal l 2 0 1 7 The North American Industry Classification System (NAICSx) defines the “forest industry” to include companies operating in forestry and logging (NAICS code 113), support activities for forestry NAICS code (115), wood products manufacturing (NAICS code 321), and pulp and paper manufacturing (NAICS code 322). The practical reality is that in BC these four industries are interrelated and make up what is known as the “forest products cluster”. Refer to Appendix B for a detailed list of NAICS codes relating to the forest sector. Forest Sector Composition The BC forest industry can be categorized into six main sectors. These include primary manufacturing, secondary manufacturing, fibre supply and wholesale, silviculture, forest innovation, and forest management. 1. Primary manufacturing sector Primary manufacturing facts in BC22  Estimated revenue of $10.8 billion  Employment created 82,843 FTEs  Largest manufacturing sector in the province  Largest producer of softwood lumber products in Canada The primary manufacturing sector is the forest industry’s largest sector and produces a broad range of products including commodity products (dimensional lumber, panels, pulp and paper), speciality products, and niche products. The Interior accounts for approximately 70% of revenues from the primary manufacturing sector.22 Primary manufacturing facilities convert whole logs into lumber products. Wood residuals, such as chips and hog fuel are by-products of the manufacturing process and are used by pulp and bioenergy operations. Primary manufacturers process about 91% of all logs harvested, and accounted for 30% of total BC exports in 2013.22 Since manufacturing is capital intensive, most facilities are operated by large companies. 2. Secondary manufacturers Secondary manufacturers produce semi-finished and finished products and components. These include engineered wood, mouldings, window and door frames, cabinets, furniture components, log pallets, and log homes. Total sector revenue is estimated to have been $2 billion in 2013. Of this revenue, approximately 66% was generated on the Coast and 34% in the Interior.22 There were approximately 1,284 secondary manufacturing businesses in BC at the end of 2013.4 3. Fibre supply and wholesale sector The fibre supply and wholesale sector is comprised of wholesalers and brokers that trade logs, wood chips and wood products both domestically and internationally. In 2013 there were 493 lumber, plywood, and millwork wholesalers operating in BC.23 The sector is estimated at $463 million and of this revenue; approximately 56% was generated from the Interior and 44% from the Coast region.22 4. Silviculture x The North American Industry Classification System (NAICS) is an industry classification system composed of sectors (two-digit codes), subsectors (three-digit codes), industry groups (four-digit codes), industries (five-digit codes) and country specific industries (six-digit codes) Lab ou r Ma r ket Pr of i l e: Fo re s t ry 10 Fal l 2 0 1 7 Silviculture involves tending to forest stands and regeneration. These two activities include products and services supplied by seed orchards and forest nurseries, site preparation, planting, vegetation management, spacing, pruning, fertilization, brushing, commercial thinning, and site rehabilitation activities. Almost 50% of all silviculture expenditures in Canada occur in BC.22 The demand in the silviculture sector is strong in BC, as millions of hectares of pine beetle diseased timber and wildfire mitigation is required. As of 2013 there was an estimated 292 firms operating in BC and of the $100 million in revenues, the Interior generated 85% with 15% generated from the Coast region.22 5. Forest Innovation Sector The forest innovation sector is focused on finding ways of extracting maximum value from the forest resource. This generally includes research into new and more effective silviculture methods, forest management and next generation manufactured products. The Forest Products Association of Canada has partnered with FPInnovations and Natural Resources Canada to create a blueprint to help guide the Canadian forest industry toward innovation and new forest products. They have identified a potential global bio-based market of $200 billion, and a potential biochemical market of $62 billion24 and are researching the next generation of engineered wood products, new building techniques, biochemical and wood-based bioenergy products. It is estimated that universities and research organizations received more than $124 million in research funding in 2013.22 6. Forest Management Sector The forest management sector is comprised of companies that produce services to support sustainable forest management, land ownership and tenure arrangements, forest inventory and valuations, planning and protection activities, road construction, maintenance and deactivation, and timber harvesting. The Interior accounts for 61% of revenues from the forest management sector.22 Forest Sector Trends & Outlook in the Columbia Basin–Boundary Region The following indicators will be examined within the Columbia Basin-Boundary region:    Forest sector establishments; Economic contributions; and Employment within the forestry sector. These indicators are presented in detail below, including a description of what is measured and its importance, as well as current data and trends where available. Forest sector establishments In 2015 a list of mills in BC was compiled by the Ministry of Forests, Lands and Natural Resource Operations and estimates 22 primary forest products manufacturing facilities (10% of provincial establishments) to be located in the Columbia Basin-Boundary region (see Table 3) and 215 in the province.3 A decrease is observed provincially from 247 in 2014 to 215 as reported in 2015.22 Lab ou r Ma r ket Pr of i l e: Fo re s t ry 11 Fal l 2 0 1 7 Primary Forest Products Manufacturing Facilities Number in BC Number in the Columbia Basin-Boundary Lumber 59 7 Veneer, Plywood, OSB & Other Panel Mills 26 3 Pulp & paper 23 2 Chip mills 20 0 Shake & shingle mills 32 2 Types of Pole Mills 18 6 Pellet 14 0 Log Homes 23 2 Total 215 Table 3: List of primary forest products manufacturing facilities in BC3 22 In 2015, there were 7,000 forestry-related businesses provincially in over 140 rural communities.1 While calculating the exact number of businesses within the Columbia BasinBoundary region is difficult, we know that in 2016/2017 there are 2462 establishments registered with the BC Forest Safety Council directly in the region (see Figure 8).xi Cranbrook has the most businesses in the region with 34 establishments (14%) registered with the BC Forest Safety Council (see Figure 8). Nelson is home to 31 businesses (13%), Golden has 28 (11%) and Nakusp has 20 (8%). Overall, forest sector-related businesses registered with the BC Forest Safety Council are well represented throughout the Columbia Basin-Boundary indicating that this sector is an important economic driver. xi While all businesses within BC are required to register with the BC Forest Safety Council in order to bid on Provincial contracts, there may be some forestry-related businesses that have not registered with the BC Forest Safety Council and are therefore not captured in this data. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 12 Fal l 2 0 1 7 Community Warfield Radium Hot Springs Montrose Greenwood Trail Silverton Elkford Slocan Park Rossland Fruitvale Sparwood Salmo New Denver Kimberley Midway Canal Flats Kaslo Fernie Invermere Grand Forks Creston Valemount Revelstoke Castlegar Nakusp Golden Nelson Cranbrook 0 0 0 0 1 1 1 2 2 2 3 3 3 3 4 4 5 5 13 14 15 16 18 18 20 28 31 34 0 5 10 15 20 25 30 35 40 # of Companies Figure 8: Number of forestry-related businesses registered with the BC Forest Safety Council in the Columbia Basin-Boundary, 2016/2017.2 Economic contribution While it is difficult to accurately determine the overall economic contributions of the Columbia Basin-Boundary to the provincial GDP, examining regional wood and pulp productions, and harvest volumes, can provide insight into the sector’s economic impacts. Wood and pulp production As noted in the BC Forest Industry Impact Study (2015) the total wood and pulp manufacturing sector revenue was estimated at $10.8 billion in 2013 and accounted for 27% of all manufacturing sales in BC.22 It is estimated that approximately 70% of the revenue was generated in the Interior region.22 Harvest volumes Lab ou r Ma r ket Pr of i l e: Fo re s t ry 13 Fal l 2 0 1 7 There is variation from year to year due to variable lumber prices or shutdowns related to high fire hazard. Harvest volumes saw a low of 4,675,927.99 cubic meters in 2012 to a high of 5,336,968.5 cubic meters in 2013. The government legislated Annual Allowable Cut determines the volume of trees that tenure holders are permitted to harvest. 5,336,968.50 5,400,000.00 5,131,652.12 Cubic Metres 5,200,000.00 5,000,000.00 4,800,000.00 4,738,888.44 4,675,927.99 4,801,759.66 4,600,000.00 4,400,000.00 4,200,000.00 2012 2013 2014 2015 2016 Year Figure 9: Total volume cut in cubic metres on crown land in the Kootenay-Boundary Natural Resource Region, 2012-2016xii,25 Median hourly rate Median Hourly Wage Rate Figure 10 illustrates a steady increase in the median hourly wage rate in the forest, fishing, mining, quarrying, oil and gas sectors. In 2015, the Kootenay Development Region exceeded both the federal and provincial averages for the first time over a 10 year period with a median hourly rate of $37.00. As this data includes fishing, mining, quarrying, and the oil and gas sectors it is not clear how this rate reflects the hourly rate for the forestry sector only. 40.00 35.00 30.00 25.00 20.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Year Canada British Columbia Kootenay xii The Kootenay-Boundary Natural Resource Region includes the Selkirk Forest District, Arrow-Boundary Forest District, Columbia Forest District, Kootenay Lake Forest district and the Rocky Mountain Forest District, and appears to cover much of the area of the Columbia Basin-Boundary, with the exclusion of Valemount.34 Lab ou r Ma r ket Pr of i l e: Fo re s t ry 14 Fal l 2 0 1 7 Figure 10: Median hourly wage rate, total employed in the forest, fishing, mining, quarrying, oil & gas sectors, 2006 - 201526 Employment participation Since the 1980’s the province’s economy has grown and diversified and overall employment in the BC forest industry has declined (see Figure 11). Although provincial dependence on the industry has decreased, many small and rural communities are still heavily dependent on the industry. More than 40% of BC’s regional economies are estimated to be dependent on harvesting and processing of forest products.22 40.0 Thousands of Persons 35.0 30.0 25.0 20.0 15.0 10.0 5.0 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Forestry and Logging with support activities Figure 11: British Columbia employment by detailed industry, annual averages, 1987 – 201627 It was not possible to isolate the data for the number of employees for the forestry sector, however data for the forest, fishing, mining, quarrying, oil and gas sectors combined is provided. Figure 12 indicates that the total number of employees has been on a steady increase in these sectors between 2006 and 2015. The total number of employees in the Kootenay Development Region has nearly tripled over that 10 year period for a total of 6,600 employees in 2015. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 15 Fal l 2 0 1 7 Total Number of Employees (in thousands) 400.0 350.0 300.0 250.0 302.6 278.1 292.0 292.8 270.9 279.5 323.9 322.7 334.2 317.2 200.0 150.0 100.0 50.0 0.0 32.5 2.7 2006 38.7 4.5 2007 35.4 5.9 2008 31.8 4.8 2009 32.9 4.8 2010 35.9 5.2 2011 37.0 6.8 2012 41.6 5.4 2013 45.2 7.1 2014 42.3 6.6 2015 Year Canada British Columbia Kootenay Figure 12: Total number of employees in the forest, fishing, mining, quarrying, oil and gas sectors, 2006 - 201526 Employment forecast A total of 134,700 job openings are expected in the South East region by 2025 across all industries.xiii,6 Three in ten openings are due to economic growth and the rest are to replace retired workers. Employment demand in the region is forecast to increase each year by 1.1 % on average, the same rate as the provincial average.6 As shown in Figure 13, in BC the forestry and logging subsector will see the highest average annual growth rate of employment between 2016 and 2025 at a rate of 1.2%, while the paper manufacturing subsector will see a decline of -2.6%. In the Kootenay Development Region, the support activities for forestry and agriculture will see the highest rates of growth at 2.1%. Similar to the provincial situation, the paper manufacturing subsector will see a decline of-1.1%. xiii The South East region includes Thompson-Okanagan and Kootenay Census Economic Regions. Note that while this area does not match the Columbia Basin-Boundary region it covers the majority of region except for Valemount located in the Cariboo Census Economic Region. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 16 Fal l 2 0 1 7 2.1% 0.2% 1.2% 1.8% Paper Manufacturing Forestry & Logging -1.1% -2.6% Support Activities for Forestry and Agriculture -1.3%-0.5% Wood Manufacturing Percentage 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% Forestry Subsectors BC Kootenay Figure 13: Average annual growth rate of employment, forestry subsectors, 2016 - 202517 Within the Kootenay Development Region approximately 1,650 job openings are estimated by 2025 in the Forestry sector.17 As shown in Figure 14, the ’Support Activities for Forestry and Agriculture’ subsector will see the most number of job openings between 2015 and 2025 with 578 positions. This accounts for 19% of all jobs in the ’Support Activities for Forestry and Agriculture’ subsector in the province (3,091 provincially). The support activities for forestry and agriculture subsector expects below average growth, with above average replacement demand. It is important to note that this subsector includes some aspects of agriculture; therefore, not all 578 positions will be directly related to forestry. The wood manufacturing subsector (476), forestry and logging (343), and paper manufacturing (253) are all subsectors which will see higher number of job openings in the region. Interestingly, 27% of all provincial job openings in the paper manufacturing subsector will occur in the Kootenay Development Region. The paper manufacturing subsector is expected to continue in a slow decline due to timber supply limitations, productivity improvements, the decline in paper consumption, and stronger competition from international paper producers. The forestry and logging subsector’s overall industry employment provincially is forecast to decline, with a forecasted average annual demand growth of -0.3% between 2015 and 2015.28 The decline is attributed to the mountain pine beetle infestation and resulting negative impact on future supplies, the industry also faces continued consolidation, and productivity improvements. In spite of these factors, the Kootenay Development Region remains stable. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 17 Fal l 2 0 1 7 Job Openings 700 600 500 400 300 200 100 0 578 476 343 253 Wood Manufacturing Support Activities for Forestry and Agriculture Forestry & Logging Paper Manufacturing Forestry Subsectors Kootenay Figure 14: Industry job openings, Kootenay Development Region, 2015-202517 Occupational forecastxiv Silviculture and forestry workers (NOC code 8422) is in the top 10 occupations forecast to expand the fastest in the South East region at a rate of 2.8%, and is the only forestry related occupation listed in the top 10.6 Labour demand-supply projection The labour force supply less demandxv (see Table 4) looks at the occupations related to the forestry sector in the South East region and examines the supply of workers against the demand for workers. Labour force demand is an estimate of the number of workers needed (employment) as well as the number of workers that are normally unemployed (due to transitioning between jobs, responding to seasonal fluctuations, or lack of skills match). Labour force supply represents the possible labour force, including supply from new entrants and from migrants. Labour supply projections assume that the relative attractiveness of occupations in the forestry sector will not change as the forecast progresses. This means that basic job responsibilities, wages relative to other sectors and, if applicable, access to education or training programs will all remain constant over the forecast horizon. While this may not necessarily prove to be true, it provides a reasonable starting point, given that the forest sector will have to compete with other sectors of the economy for available workers.29 As shown in Table 4, transport truck drivers, heavy equipment operators (except crane), construction managers, and heavy-duty equipment mechanics are the occupations with the highest, sustained demand in the forestry sector until 2025 in the South East Region. xiv Labour demand and labour supply projections were calculated by identifying the four major industry groupings of the forest sector. The North American Industry Classification System (NAICS) defines the “forest industry” to include companies operating in forestry and logging (113), support activities for forestry (115), wood products manufacturing (321), and pulp and paper manufacturing (322). The occupations (National Occupation Classification or NOC codes) have been selected for analysis, as they best represent the core occupations within the forest sector. See Appendix B for a list of NAICS and NOC codes. xv Labour Force Supply Less Demand: The difference between the Labour Force Supply and Labour Force Demand. If this value is positive, then Labour Force Supply is greater than Labour Force Demand. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 18 Fal l 2 0 1 7 Labour Force Supply Less Demand – South East Region Forestry 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total 0811 Managers in natural resources production and fishing 0 -5 -3 -6 -6 -8 -7 -5 -3 -3 -3 -49 2122 Forestry professionals 12 -2 -5 -8 -8 -10 -9 -7 -4 -4 -4 -49 2223 Forestry technologists and technicians 26 -5 -9 -13 -13 -16 -13 -10 -6 -6 -6 -71 2224 Conservation and fishery officers 3 -1 -1 -1 -1 -1 -1 -1 -1 -1 -1 -7 8211 Supervisors, logging and forestry 1 -5 -2 -4 -4 -5 -5 -3 -2 -2 -2 -33 8422 Silviculture and forestry workers 12 -5 -3 -4 -4 -5 -4 -3 -2 -2 -2 -22 Road Building 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total 0711 Construction managers 9 2 -16 -22 -22 -29 -24 -21 -14 -13 -12 -162 7302 Contractors and supervisors, heavy equipment operator crews -6 -1 -8 -12 -13 -16 -14 -11 -7 -6 -6 -100 7372 Drillers and blasters surface mining, quarrying and construction -1 0 -1 -2 -2 -3 -2 -2 -1 -1 -1 -16 Labour Force Supply Less Demand – South East Region 7521 Heavy equipment operators (except crane) 1 7 -23 -43 -43 -56 -46 -37 -24 -23 -20 -307 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total 2272 Air traffic controllers and related occupations 0 -2 -2 -2 -2 -2 -2 -2 -1 -1 -1 -17 2273 Deck officers, water transport 1 0 0 0 0 0 0 0 0 0 0 1 7511 Transport truck drivers -287 64 -10 -69 -82 -100 -95 -73 -46 -46 -44 -788 8241 Logging machinery operators 3 -20 -5 -9 -9 -14 -12 -9 -5 -5 -4 -89 8616 Logging and forestry labourers 16 -8 -5 -7 -6 -8 -7 -5 -3 -3 -3 -39 Multi-Phase Operators 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total 7301 Contractors and supervisors, mechanic trades 1 -1 -4 -5 -4 -5 -5 -4 -3 -3 -3 -36 7312 Heavy-duty equipment mechanics -6 2 -13 -24 -24 -29 -25 -19 -12 -12 -11 -173 Pulp & Paper Manufacturing 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total Logging Lab ou r Ma r ket Pr of i l e: Fo re s t ry 20 Fal l 2 0 1 7 Labour Force Supply Less Demand – South East Region 2233 Industrial engineering and manufacturing technologists and technicians 1 0 -1 -1 -1 -1 -1 -1 -1 -1 -1 -8 7311 Construction millwrights and industrial mechanics -5 1 -10 -19 -19 -22 -19 -14 -8 -8 -7 -130 9215 Supervisors, forest products processing -2 -1 -3 -5 -4 -5 -4 -2 -1 -1 -1 -29 9432 Pulp mill machine operators 0 0 -2 -4 -4 -4 -3 -2 -1 0 -1 -21 Table 4: Labour force supply less Demand, South East Region30 Lab ou r Ma r ket Pr of i l e: Fo re s t ry 21 Fal l 2 0 1 7 Labour demand due to growth & attrition Table 5 presents the estimated total number of job openings for the Kootenay Development Region between 2017 and 2025 due to expansion and replacement. Note that the Kootenay Development Region represents a slightly smaller geographic area than the Columbia BasinBoundary region in so far as it excludes Valemount, Revelstoke and Golden. Provincially, by 2025 it is expected that 69% of job openings will be due to retirements and deaths.6 In the Kootenay Development Region, the top occupations expected to generate the largest number of new openings (full year job openings) between the years 2017 – 2025 include: transport truck drivers, heavy equipment operators (except crane), and heavy-duty equipment mechanics. TOTAL job openings (2017-2025) Kootenay Development Region 0811 Managers in natural resources production and fishing 78 2122 Forestry professionals 65 2223 Forestry technologists and technicians 134 2224 Conservation and fishery officers 10 8211 Supervisors, logging and forestry 48 8422 Silviculture and forestry workers 46 0711 Construction managers 169 7302 Contractors and supervisors, heavy equipment operator crews 183 7372 Drillers and blasters - surface mining, quarrying and construction 24 7521 Heavy equipment operators (except crane) 426 2273 Deck officers, water transport 9 7511 Transport truck drivers 728 8211 Supervisors, logging and forestry 48 8241 Logging machinery operators 64 8616 Logging and forestry labourers 56 7301 Contractors and supervisors, mechanic trades 23 7312 Heavy-duty equipment mechanics 344 7311 Construction millwrights and industrial mechanics 173 9215 Supervisors, forest products processing 82 9432 Pulp mill machine operators 49 8421 Chain saw and skidder operators 28 2271 Air pilots, flight engineers and flying instructors 35 Table 5: Summary of potential job openings due to growth & attrition (in full-year jobs) by industry & occupation in forestry-related industries (2017-2025), Kootenay Development Region31 Lab ou r Ma r ket Pr of i l e: Fo re s t ry 22 Fal l 2 0 1 7 Conclusion The purpose of this report was to identify current forestry sector market trends and issues, including current and projected labour market needs to help workforce development partners within the Columbia Basin-Boundary region understand and respond to changing labour market demands. Within the Columbia Basin-Boundary region approximately 1,650 job openings are estimated by 2025 in forestry and logging (343), support activities for forestry (578), wood products manufacturing (476), and pulp and paper manufacturing (253). Job openings for specific occupations relating to the forestry sector are highest for transport truck drivers, heavy equipment operators (except crane), construction managers (road building), construction millwrights and industrial mechanics and forestry technologists and technicians. It is expected all sectors relating to forestry will be limited in growth and expansion through to 2025 as annual harvest reductions are forecasted to decline due to the mountain pine beetle infestation’s negative impact on future timber supplies. Other factors influencing the forestry sector include timber supply limitations, productivity improvements, the decline in paper consumption, stronger competition from international paper producers, and trade restrictions to the US market due to the softwood lumber trade dispute. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 23 Fal l 2 0 1 7 Appendix A - References & Resources 1. Province of British Columbia. BC Jobs Plan: 5-Year Update. (2017). 2. BC Forest Safety Council. Data Request. (2017). 3. Ministry of Forests Lands Natural Resource Operations. Major Primary Timber Processing Facilities in British Columbia, 2015. (2017). 4. Forestry Innovation Investment. B.C. Forest Sector Data and Stats 2017. (2017). Available at: http://www.bcfii.ca/sites/default/files/BC Forest Sector Data and Stats 2017.pdf. (Accessed: 12th September 2017) 5. Ministry of Forests Lands Natural Resource Operations. 2015 Economic State of the BC Forest Sector. (2016). 6. WorkBC. 2025 Labour Market Outlook. (2016). 7. WorkBC. Regional Profiles. (2017). Available at: https://www.workbc.ca/Labour-MarketIndustry/Regional-Profiles.aspx. (Accessed: 15th May 2017) 8. Selkirk College. Columbia Basin-Boundary Map. (2017). 9. Columbia Basin Rural Development Institute. Trends Analysis: Demographics. (2016). 10. Columbia Basin Rural Development Institute. Our Region. (2017). Available at: http://www.cbrdi.ca/about-us/our-region/. (Accessed: 5th September 2017) 11. Columbia Basin Rural Development Institute. Trends Analysis: Education and Learning. (2016). 12. WorkBC. Regional Profile: Kootenay. (2017). Available at: https://www.workbc.ca/Labour-Market-Information/Regional-Profiles/3. (Accessed: 3rd June 2017) 13. National Resources Canada. Canadian Forest Service’s calculations based on Statistics Canada’s table 379-0031: GDP in 2007 constant prices, and estimated industry price deflators. (2017). 14. Natural Resources Canada. Forest products and applications. Available at: https://www.nrcan.gc.ca/forests/industry/products-applications/13317. (Accessed: 10th June 2017) 15. Forest Products Assocation of Canada. Provincial Statistics. (2016). Available at: http://www.certificationcanada.org/en/statistics/provincial-statistics/. (Accessed: 12th September 2017) 16. Chartered Professional Accountants of British & Columbia. Overview of BC Forest Industry. CPABC Ind. Updat. 34 (2015). 17. WorkBC. Industry Outlook Profile (NAICS 115, 322, 321, 113) 2015-2025. (2015). 18. BC Stats. BC GDP by Industry (Chained Dollars). Statistics Canada (CANSIM table 3790030). (2016). 19. Statistics Canada. BC GDP by Industry - NAICS Aggregations, 2011-2015: (CANSIM table 379-0030). (2016). 20. Statistics Canada. Merchandise trade data (special extraction). (2016). Lab ou r Ma r ket Pr of i l e: Fo re s t ry 24 Fal l 2 0 1 7 21. Ministry of Forests Lands Natural Resource Operations. Frequently Asked Questions Softwood Lumber Dispute. (2017). 22. Council of Forest Industries. BC Forest Industry: Economic Impact Study. (2015). 23. Statistics Canada. CANSIM Table 551-0005. (2013). 24. Forest Products Assocation of Canada. The New Face of the Canadian Forest Industry Biopathways. (2011). 25. Ministry of Forests Lands Natural Resource Operations. Mark Monthly Scaling History Report on Crown Land in the Kootenay-Boundary Natural Resource Region, 2012 - 2016. (2017). 26. Statistics Canada. Labour Force Survey, custom tabulation V1012_11_Table072.ivt. Employed employees and wages by industry for Canada, British Columbia and its’ economic regions for age 15 years and over. (2015). 27. BC Stats. British Columbia Employment by Detailed Industry, Annual Averages. Statistics Canada. Labour Force Survey (2017). 28. WorkBC. Industry Profile: Forestry and Logging with Support Activities. (2017). Available at: https://www.workbc.ca/Labour-Market-Information/Industry-Profiles/8. (Accessed: 12th September 2017) 29. The Canadian Tourism Research Institute & The Conference Board of Canada. The Future of Canada’s Tourism Sector: Shortages to Resurface as Labour Markets Tighten. (2012). 30. Ministry of Jobs Tourism and Skills Training - Labour Market Information. 2015-2025 Labour Market Outlook Occupation Supply and Demand for BC and Region. (2015). 31. Ministry of Jobs Tourism and Skills Training - Labour Market Information. 2015 - 2025 Labour Market Outlook Occupations Job Openings for BC and Region. (2016). 32. Statistics Canada. North American Industry Classification System. (2017). 33. Statistics Canada. Glossary. (2017). Available at: https://www.ic.gc.ca/eic/site/cissic.nsf/eng/h_00005.html#c. (Accessed: 5th September 2017) 34. Ministry of Forests Lands Natural Resource Operations. Region and District Offices. (2011). Available at: https://www.for.gov.bc.ca/mof/maps/regdis/regdismap.pdf. (Accessed: 12th September 2017) Lab ou r Ma r ket Pr of i l e: Fo re s t ry 25 Fal l 2 0 1 7 Appendix B - BC Forest Sector NAICS & NOC Codes BC Forest Sector NAICS Codes The following lists the broadly defined industrial groups within the forestry sector as defined by NAICS.32 Forest Industry (Direct) Industries (NAICS) Description Forestry & Logging Forestry & Logging (113) - Logging (113311) - Contract Logging (113312) - Timber Tracts (1131) Establishments primarily engaged in cutting, hauling and transporting timber (within logging limits). Support Activities for Forestry & Agriculture (115) - Support Activities for Forestry (1153) Establishments primarily engaged in performing support activities related to timber harvesting, hauling and forest resource management. Support Activities for Forestry 113—Forestry and logging: This sector comprises establishments primarily engaged in growing and harvesting timber on a long production cycle (of ten years or more). Long production cycles use different production processes than short production cycles, which require more horticultural interventions prior to harvest, resulting in processes more similar to those found in the Crop production subsector. Consequently, Christmas tree production and other production involving production cycles of less than ten years are classified to the crop production subsector. Industries in this subsector specialize in different stages of the production cycle. Reforestation requires production of seedlings in specialized nurseries. Timber production requires natural forests or suitable areas of land that are available for a long duration. The maturation time for timber depends upon the species of tree, the climatic conditions of the region, and the intended purpose of the timber. The harvesting of timber, except when done on an extremely small scale, requires specialized machinery unique to the industry. The gathering of forest products, such as gums, barks, balsam needles and Spanish moss, are also included in this subsector. 115—Support activities for agriculture and forestry: This sector is comprised of establishments primarily engaged in Lab ou r Ma r ket Pr of i l e: Fo re s t ry 26 Fal l 2 0 1 7 Forest Industry (Direct) Industries (NAICS) Description providing support services that are essential to agriculture and forestry production. Forest Products Manufacturing Wood Product Manufacturing (321) - Sawmills & Wood Preservation (3211) - Veneer, Plywood & Engineered Wood (3212) - Other Wood Products (3219) Establishments engaged in manufacturing solid wood products, including lumber, veneer, and plywood, as well as millwork, wood doors and windows, mobile homes and prefabricated wood manufacturing. Paper Manufacturing (322) - Pulp, Paper & Paper Board Mills (3221) - Converted Paper Products Manufacturers (3222) Establishments engaged in manufacturing pulp and paper products, as well as manufactured paper products from purchased paper and paperboard. Forest Sector (Indirect) Industries (NAICS) Description Forest Products Transportation Forest Products Trucking – Local (484223) Establishments primarily engaged in local trucking of forest products, including logs and wood chips, for processing and manufacturing. Logging Road Construction Heavy & Civil Engineering Construction (237) Establishments primarily engaged in constructing heavy and civil engineering works. 321—Wood product manufacturing: Is comprised primarily of establishments engaged in manufacturing products from wood. The three industry groups in this subsector comprise establishments engaged in sawing logs in lumber and similar products, or preserving these products; making products that improve the natural characteristics of wood, by making veneers, plywood, reconstituted wood panel products or engineered wood assemblies; and making a diverse range of wood products, such as millwork. 322—Paper manufacturing: This industry is comprised of establishments primarily engaged in manufacturing pulp, paper, and paper products. The manufacture of pulp involves separating the cellulose fibres from other impurities in wood, used paper or other fibre sources. Lab ou r Ma r ket Pr of i l e: Fo re s t ry 27 Fal l 2 0 1 7 Forest Industry (Direct) Industries (NAICS) Description Commercial Equipment Suppliers Construction and forestry machinery, equipment and supplies (417210) Construction, transportation, mining, and forestry machinery and equipment rental and leasing (53241) Establishments that supply commercial equipment or rent/lease equipment (without operator). Repair & Maintenance Commercial and industrial machinery and equipment repair and maintenance (8113) Professional, Scientific & Technical (541) Business to Business, electronic markets (419) Insurance Carriers & Related (524) Establishments that maintain and repair construction and forestry machinery and equipment. Provincial Government (912) Federal Government (911) Aboriginal Public Administration (914) Education & Training (6112, 6113, 6115) Agencies involved in the regulation of the forest resource and provision of public and private training services. Professional & Business Services Regulatory & Training Establishments primarily engaged in activities in which human capital is the major input. Establishments that provide financial and other business services. BC Forest Sector Priority National Occupation Classification (NOC) Codes Production Phase Forestry Priority Occupation (26) Code NOC Occupation (26) Manager, Forestry Operations Forestry Professional (e.g., registered professional forester) Forestry Technologist & Technician (e.g., cruiser, surveyor, resource officer, fire suppression) Conservation & fishery officer Supervisor, Forestry (e.g., forestry operations) Forestry Worker (e.g., forest firefighter, burner, spacer, silviculture) 0811 2122 Primary Production Manager Forestry Professional 2223 Forestry T & T 2224 8211 8422 Conservation Supervisor, Forestry & Logging Silviculture & Forestry Worker Lab ou r Ma r ket Pr of i l e: Fo re s t ry 28 Fal l 2 0 1 7 Production Phase Priority Occupation (26) Code NOC Occupation (26) Road Building Construction Manager (e.g., project manager) Supervisor, Heavy Equipment Operators Drillers & Blasters Heavy Equipment Operator (e.g., backhoe, dozer, excavator, grader) 0711 7302 7372 7521 Construction Manager Supervisor, HEO Drillers & Blasters Heavy Equipment Operator Logging Manager, Logging Operations Supervisor, Logging (e.g., logging crew boss, yard supervisor, boom master, quality control) Supervisor, Falling Logging Machinery Operator (e.g., skidder, feller buncher, loader, processor, tower crane, yarder) Hand Faller Ground Worker (i.e., bucker) Logging Worker (chaser, choker setter, landing worker) Boom Man Helicopter Pilot Tugboat Captain (e.g., boom boat operator) Logging Truck Drivers 0811 8211 Primary Production Manager Supervisor, Forestry & Logging 8211 8241 Supervisor, Forestry & Logging Logging Machinery Operator 8421 8421 8616 8616 2271 2273 7511 Chainsaw & Skidder Operator Chainsaw & Skidder Operator Logging & Forestry Labourer Logging & Forestry Labourer Helicopter Pilot Tugboat Captain Truck Driver Multi-Phase Operators Master Mechanic (e.g., Supervisor, Mechanic Trades) Heavy Duty Mechanic 7301 Master Mechanic 7312 Heavy Duty Mechanic Pulp & Paper Manufacturing Industrial Engineering and Manufacturing Technologists & Technicians Supervisor, Forest Products Processing 2233 Ind. Eng. and Mfg T & T 9215 Pulp Mill Machine Operator Maintenance Mechanic (e.g., Millwright) 9432 7311 Supervisor, Forest Products Processing Pulp Mill Machine Operator Millwright Lab ou r Ma r ket Pr of i l e: Fo re s t ry 29 Fal l 2 0 1 7