Renfrew County. Forestry & Value-added Wood Processing Economic Development Committee. Sector Update April 26, 2017

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1 Renfrew County Forestry & Value-added Wood Processing Economic Development Committee Sector Update April 26, 2017

2 Did you know? Ontario has 85 billion trees. Wood is the only building material that is both renewable and recyclable. For every tree harvested, three take root. Only 0.5% of Ontario s trees are harvested annually. (Source: Ontario Ministry of Natural Resources website, 2014)

3 2015 Total Canadian Forestry Related Industry Revenues $63,192,662,000 Other Costs, $11,975,747, 19% Net Revenues, $4,830,081, 8% Total direct & Indirect Labour Costs, $10,072,980, 16% Net Revenues (dollars x 1,000) Total salaries and wages, direct and indirect labour (dollars x 1,000) Total Energy, Water & Fuel costs, $3,348,169, 5% Total cost of energy, water utility and vehicle fuel (dollars x 1,000) Cost of materials and supplies (dollars x 1,000) Other Costs Materials & Supplies Costs, $32,965,685, 52% Total Number of Employees, Direct and Indirect Labour 197,142

4 Total Ontario Forestry Related Industry Revenues $15,664,425,000 Other Costs, $3,657,939, 23% Net Revenues, $1,401,216, 9% Net Revenues (dollars x 1,000) Total Direct & Indirect Labour Costs, $2,759,653, 18% Total salaries and wages, direct and indirect labour (dollars x 1,000) Total cost of energy, water utility and vehicle fuel (dollars x 1,000) Total Energy, Water & Fuel Costs, $609,699, 4% Cost of materials and supplies (dollars x 1,000) Other Costs Materials & Supplies Costs, $7,235,918, 46% Total Number of Employees, Direct and Indirect Labour 54,152

5 Recent Sector Performance Generally it has been reported that overall performance in the Forestry Sector with Renfrew County has been favourable over the past few years Revenues Expenses Canada % % Ontario % %

6 Nature of Businesses within Renfrew County Most businesses are relatively small and family owned without the resources or access to capital of the large corporations For the most part, local businesses have become fairly integrated, somewhat specialized and reliant on one another Generally it is considered that skilled trades are in short supply and that reliable labour is somewhat difficult to attract and retain Over 2,900 forestry & value-added wood related jobs

7 Capital Investment Mills have recognized the need to upgrade equipment in order to create increased efficiencies and productive capacity Some of the larger Mills have been making capital investments in order to remain competitive Though traditional financing can, at times, be difficult to obtain, there are a few programs that can be of support in some situations

8 Importance of Pulpwood & Residuals Loss of pulpwood mills like that in Portage du Fort challenging for the local industry Re-opening of Pembroke MDF has had a significant positive impact Increasing opportunities with Ensyn Technologies beneficial

9 Local Performance Though Markets have improved over the past few years, they are still below what they were in 2004, with the sharp declines after 2007 In the last few years, the low Canadian dollar relative to the U.S. Dollar and the strength of the U.S. Economy has buoyed the sector

10 Sustainable Forestry within Renfrew County Sustainable Forest Management with all public lands within Renfrew County certified Harvests over the last 5 years have been significantly less than sustainable forestry can accommodate for the AFA and OVFI Access to logging in Algonquin Park seen as crucial for the local industry overall

11 Challenges of Increasing Costs of Production Government/Regulatory Costs ESA WSIB WHIMIS Hydro Costs Supply (largely result of regulations) Capital Costs Labour & Training Forest Management

12 Canada U.S. Softwood Lumber Dispute Impacts for Renfrew County Primarily directed against spf (Spruce, Pine, Fir) Negative impact on the whole for the industry, which affects Renfrew County In the short term, some within Renfrew County not quite as significantly impacted given domestic use and the value added nature of many local products (Red & White Pine and Poplar as apposed to Spruce)

13 Opportunities Potential for Biomass Energy Production Potential for value added wood production, i.e. cross laminated timbers Continued support at the County level with respect of advocating to the Provincial and Federal governments for recognition and support of rural and forestry related issues

14 Importance of Messaging

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17 Renfrew County Forestry & Value-added Wood Processing Economic Development Committee Thank you