Markets for Western Canada's Forest Products in East Asia

By Peter, Brian | American Review of Canadian Studies, Summer 2007 | Go to article overview

Markets for Western Canada's Forest Products in East Asia


Peter, Brian, American Review of Canadian Studies


Introduction

While the United States has long been the most important destination for western Canada's forest products, markets in Asia have also played an important role in the development of western Canada's forest industry. Japan has been an especially significant market, although demand for western Canada's exports in Japan has fallen in recent years. Western Canada's reliance on U.S. demand has increased as a result, and a strong economy and a widespread construction boom in the United States have provided a further pull toward this market. However, U.S. demand has recently weakened, creating risks to the sustainability of an industry that plays a critical role in western Canada's economy. At the same time, the economic landscape in Asia is shifting, creating both opportunities and threats for western Canada's forest sector.

This article will discuss several topics related to the role of East Asia's markets in western Canada's forest industry. First, the history of western Canada's forest industry and export trends will be reviewed. The current state of forest product markets in Asia will then be examined. Some specific trends that may affect future demand for forest products in Asia will be identified, and overall economic trends in some key markets will be summarized. Examples of initiatives to improve Canada's forest product trade with Asia will be outlined. Finally, advantages that western Canada's forest product exporters have and some of the challenges they face in the region will be discussed.

The Early Development of Western Canada's Forest Industry

The first recorded export of forest products from western Canada took place in 1788, when a ship set sail from Vancouver Island's Nootka Sound carrying planks and spars to be sold in China (Mackay 1982). While the value of western Canada's forests was recognized by early explorers and settlers, shipments such as this were incidental through the late 18th and early 19th centuries, and most timber was harvested for local use. Indeed, western Canada's Aboriginal people have harvested timber and other forest products for local use for thousands of years. Aboriginal communities historically used timber for constructing houses, canoes, totem poles, and boxes, and made items such as baskets, hats, mats, rope, and clothing from yellow and red cedar. They also used timber and other vegetation for fuel, food, medicines, and a variety of other domestic uses (Turner and Cocksedge 2001). However, by the early 1860s, some of the newly arriving settlers on Canada's west coast had established sawmills on southern Vancouver Island and the mainland (around what is now the City of Vancouver), and shipments to a variety of destinations in the Pacific Rim began to occur. Lumber and spars were shipped to markets in the United States, Mexico, Hawaii, China, Australia, Peru, and Chile (Lawrence 1957). Beams made of prime British Columbia timber were shipped to China for use in the Imperial Palace in Beijing (Mackay 1982). The early industry struggled: many sawmills operated for only a year or two before going out of business or changing hands.

The arrival of the Canadian Pacific Railroad in 1886 "swept the industry out of its pioneer stage and into growth and change" (Mackay 1982, 16). The timber needs of the railroad itself were a source of demand, and once in operation, the railroad provided a ready means for transporting products outside the region. The railroad also helped financial and human capital flow into western Canada, facilitating the region's economic growth (Lawrence 1957). However, the arrival of the railroad also shifted the focus of western Canada's forest industry toward supplying markets in the east, especially in the rapidly growing prairie region, rather than overseas.

By the end of the First World War, markets in the east had declined, and lumber manufacturers on Canada's west coast once again looked across the Pacific for opportunities. …

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