Forestry Sector

If your business is in Canada’s forest sector, Canada’s free trade agreements (FTAs) and foreign investment promotion and protection (FIPAs) are creating opportunities for firms like yours. This sector encompasses forestry and logging, as well as support activities for forestry and wood products manufacturing.

Canadian forest products companies are looking beyond the border for new business opportunities, and they are finding them. The United States and Western Europe have long been the major markets for Canadian forest products. In recent years, however, Canada has been transforming its export focus through product innovation and by developing new export markets. Today, for example, China, India and other Asian countries are becoming increasingly significant new markets for Canada’s forest products.

The foresty sector is an important part of the Canadian economy. As an $11.8-billion industry, it represents 7.1 percent of Canada’s manufacturing GDP. The industry is an important employer across rural Canada operating in 200 forest-dependent communities from coast to coast and directly employing 133,895 Canadians. That is why the Government of Canada is ensuring that the needs of companies in this sector are addressed in government-to-government commercial agreements such as free trade agreements.

For example:

  • Canada’s wood exports to the European Union faced average tariffs of 2.2 percent with peaks up to 10 percent between 2009 and 2011. A Canada-European Union comprehensive economic and trade agreement could benefit this sector significantly by removing tariffs and other barriers to trade.
  • Government efforts to facilitate trade between Canada and China could result in better market access for Canadian companies. Canada’s lumber exports to China have grown remarkably in recent years (up more than sixfold over the past five years to over $1.4 billion) and are beginning to expand to higher-value products.
  • The comprehensive economic partnership agreement (CEPA) Canada is negotiating with India could help unlock the significant potential of that market for Canadian exporters. Canada is a key player in India’s imports of wood pulp, selling nearly $100 million in 2012; with a CEPA in place, this figure is expected to grow and new opportunities in other forest products and processes will open up.
  • The Forest Products Association of Canada (FPAC) welcomes Canada’s negotiations toward a free trade agreement with Japan—the third-largest international market for Canada’s forest products. The FPAC agrees that eliminating tariff and non-tariff barriers to the Japanese market will give Canadian companies a “leg-up” on the competition.
  • The Canada-Jordan Free Trade Agreement (implemented in October 2012) eliminates tariffs (which ranged up to 30 percent) on most of Canada’s forest products exports to Jordan.

For more information about new international business opportunities and how Canada’s FTAs and FIPAs can help your company in a particular market, please contact a trade commissioner or check out the Trade Commissioner Service website.