Forest Industry in Canada

Forestry is a major industry in Canada in light of the fact that forests cover over 40 percent of the country’s land. The sector is also a major employer in provinces such as Ontario, British Columbia, and Quebec.


Major subsectors include logging and forestry, paper and pulp product manufacturing, and engineered wood and soft lumber product manufacturing.


Businesses engaged in logging and forestry specialize in timber harvesting and contribute some 20 percent to the sector’s contribution to GDP. They include companies that harvest and deliver pulpwood and logs and produce products such as wood chips, fuelwood, fence posts, pilings, poles, pulpwood, and bolts and logs.

Paper and Pulp

Businesses specializing in paper and pulp product manufacturing mainly operate in Quebec and Ontario and contribute about 36 percent. They produce an array of different products such as household tissue, packaging and cardboard products, paper towels, etc. Paper and pulp products also include building board and paper, sanitary wrapping, books, converted paper, and newsprint. Businesses operating in this sector include asphalt roofing businesses, paperboard and newsprint mills, and pulp mills.

Solid Wood

Companies that manufacture solid wood products contribute about 44 percent and are engaged in the manufacturing of engineered wood and millwork products and structural and lumber panels.

Canadian businesses also produce wood-fabricated materials such as pallets and boxes, bathroom vanity, kitchen cabinets, and coffins. They specialize in waferboard, particleboard, and plywood, veneer, shakes and shingles, and lumber. Companies producing wood-fabricated materials include plywood and veneer mills, shake and shingle mills, planing mills and sawmills, and others.

Canadian Companies

Canada ranks 1st for the production of newsprint and softwood kraft market pulp and 2nd for the production of wood pallets, oriented strand board, and softwood lumber. Leading Canadian companies that produce paper and lumber products include Millar Western Forest Products, West Fraser Timber, Resolute Forest Products, and Domtar Inc. West Fraser specializes in paper, pulp, engineered wood products, and panels while Resolute Forest Products produces specialty papers, newsprint, tissue, wood products, and market pulp. Millar Western Forest Products is engaged in the production of pulp and lumber while Domtar produces technical and specialty papers, publishing and printing papers, office papers, and other products.

Statistics by Product and Province

British Columbia has the highest number of businesses operating across sectors, followed by Quebec and Ontario. Logging businesses are mainly concentrated in Quebec, Ontario, and British Columbia. The largest number of communities that are dependent on the forestry industry are found in British Columbia and Quebec.


Companies specializing in wood processing mainly export products to the U.S., Japan, and markets in Europe. Other export partners include South Korea, China, India, and Taiwan. Markets such as Thailand, Mexico, Taiwan, Indonesia, and India account for 7.8 percent of Canada’s export markets. Some 87 percent of products are exported to Japan, China, and the U.S., with some 44 percent of wood pulp being exported to China. The United States is the main export market for structured panels and writing and printing paper products. Plywood is mainly exported to Australia, the United Kingdom, and the U.S. while the major export markets for oriented strand board are China, Japan, and the U.S. Dissolved pulp is exported to China, Indonesia, and India while wood pellets are exported to Japan, the United Kingdom, and the United States.

The main export products include softwood lumber, newsprint, writing and printing paper, structural wood panels, and wood pulp. Softwood lumber is the main export product, followed by northern bleached softwood kraft and oriented strand board. Softwood lumber is processed and exported as softwood boards, machine stress rated lumber, appearance-grade lumber, and dimension lumber. Exports of primary wood products include wood chips, pulpwood, and bolts and logs. Companies specializing in paper and wood products mainly export wood pulp, recovered paper, newsprint, and converted paper. Forest products are exported to more than 180 countries and make for 7 percent of the country’s total exports.

British Columbia and Quebec are the leading exporters of softwood lumber, wood pulp, and structural wood panels, followed by Ontario, Saskatchewan, New Brunswick, Manitoba, and Nova Scotia. The main export markets of lumber businesses in British Columbia are China and the U.S. while businesses in Quebec mainly export to the U.S.

Wood Industry Business Loans in Canada

A wood industry business can be a highly profitable one given that Canadian companies have access to markets in Asia and Europe. Many startups, however, require financing to fund their wood processing or timber export business. The good news is that there are different ways to finance operations, from small business loans to peer-to-peer financing.

Canada Small Business Financing Program

One option for wood industry businesses is government loans for the purchase of equipment, buildings, and land. Start-ups and small businesses that have gross revenues of up to $10 million a year qualify for financing. Applicants can choose from a fixed-rate or floating-rate principal, and 85 percent of the borrowed amount is guaranteed by the Canadian government. The term depends on the loan purpose and is 15 years for the purchase of real property, 7 years for leasehold improvements, and 10 years for the purchase of equipment. Financing is available through partnering institutions across Canada, among which the Bank of Nova Scotia, Sunova Credit Union, Access Credit Union, and Canadian Imperial Bank of Commerce.

A number of forestry funding programs are also available, among which the Forest Innovation Program, Expanding Market Opportunities Program, and Indigenous Forestry Initiative.

Private Providers

Banks and other providers offer financing in the form of working capital, loans, and leases. Some companies offer to lease forestry equipment such as feller bunchers, trailers, log trucks, chippers, and harvesters. Other types of equipment that can be leased include skidders, munchers, and attachments. The main benefits for businesses include steady, fixed monthly payments and customizable plans. Another option is to apply for commercial equipment financing or heavy machinery equipment financing. The loan amount typically varies from $1,000 to $1,000,000, and the interest rate can be as low as 4.9 percent. The term also varies by provider and is usually between 3 and 84 months. Businesses applying for a loan are asked to provide details such as liabilities and assets and commercial and personal information. Applicants state amounts for assets such as vehicles, RRSPs, home value, savings, and cash. They also fill in information about liabilities such as second property mortgages, auto loans, taxes payable, credit card balances, and bank loans.

Business loans are also offered by big Canadian banks and come with floating and fixed interest rates and no prepayment penalties. Many banks offer secured loans to businesses that can provide collateral in the form of margin or liquid security, residential or business real estate, or business assets. Lines of credit are also available to business owners and come with a preapproved limit and a choice of a secured or unsecured rate. Lending packages are also offered and feature a combination of a loan and a line of credit to purchase assets and equipment and cover operating expenses. Some banks offer business loans with a maximum amortization term of 15 years and blended interest and principal. The loan repayment schedule is usually based on the useful life of the asset or equipment purchased. You can find more information about it here.