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What is next for the forestry sector

Blog – What is next for the Forestry Sector?

1. Lumber prices and shortages - https://www.vox.com/22410713/lumber-prices-shortage
2. USA pushes for a new softwood lumber deal - https://www.theglobeandmail.com/business/article-us-home-builders-push-for-new-us-canada-softwood-deal/
3. Housing market - https://globalnews.ca/news/7835278/toronto-home-sales-up-april-2021-trreb/
4. High costs of construction materials - https://www.stcatharinesstandard.ca/ts/business/2021/05/03/in-your-corner-with-sky-high-construction-costs-should-you-hold-off-on-your-home-renovation.html
5. Lack of capacity - https://seekingalpha.com/news/3689871-lumber-futures-extend-rally-to-all-time-highs-sawmill-owners-eye-more-profits
6. 3-D housing - https://www.wfaa.com/article/news/nation-world/netherlands-3d-printed-homes/507-aca3ad94-7173-47b1-b9a8-f1c2d0d19583
7. Forest management - https://climatenewsnetwork.net/only-intact-forests-can-stave-off-climate-change/
8. Funding / https://www.newswire.ca/news-releases/funding-available-for-canada-s-indigenous-forest-sector-870812531.html
9. Apple/forestry management - https://www.apple.com/newsroom/2021/04/apple-and-partners-launch-first-ever-200-million-restore-fund/
10. Upgrading mills - https://www.woodbusiness.ca/maximizing-potential-industry-veteran-leads-the-charge-to-upgrade-ontario-mill/

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What is next for the forestry sector

  1. 1. What is happening to World’s forest? Paul Young CPA CGA May 7, 2021
  2. 2. Paul Young - Bio • CPA, CGA • Academia (PF1, FA4, FN2, MU1. and MS2) • SME – Risk Management • SME – Close, Consolidate and Reporting • SME – Public Policy • SME – Emerging Technology • SME – Business Process Change • SME – Financial Solutions • SME – Macro/Micro Indicators • SME – Supply Chain Management Contact information: paul_young_cga@hotmail.com
  3. 3. Introduction • Canada forestry sector is key sector to the Canadian Economy • Canada forestry sector has faced protectionism policies - https://www.canadianmanufacturing.com/financing/canfor-to- curtail-operations-at-all-but-one-of-its-sawmills-in-british-columbia- 234114/ • The federal government under Justin Trudeau has done little to support the forestry sector. • Forest Management world-wide crisis • Need for better urban planning
  4. 4. Agenda • Commodity Prices • Global Housing Market outlook • Housing Starts – North America • Merchandise Trade • Wages / Forestry Sector • Employment • Issues facing Forestry • Justin Trudeau and the Forestry Sector • Technology and Forestry Sector • West Fraser and Forestry • Carbon Sink • Government Cutbacks and Audits Global deforestation Poor urban planning Eco-Terrorism Automation / Forestry Management Siberia Forest Fires California / Fires What’s next
  5. 5. Commodity Prices Source - https://www.scotiabank.com/ca/en/about/global-economics/commodity-price-index.html or “Softwood lumber prices slowly recover from recent lows: May 2019” Source - https://www.woodbusiness.ca/softwood- lumber-prices-slowly-recover-from-recent-lows- may-2019/ Source https://us.spindices.com/indices/ commodities/sp-gsci
  6. 6. Housing vs Lumber Costs @SeanFraserMP - cost of materials - availability of land - urban vs rural strategy - cost of living https://www.slideshare.n et/paulyoungcga/housing -cost-of-home- ownership-canada-and- the-usa-march-2021
  7. 7. Global Housing Outlook Source - https://www.investmentexecutive.com/news/research-and- markets/housing-market-to-take-step-back-in-2021-fitch/
  8. 8. Merchandise Trade Source - Stats Canada
  9. 9. Forestry Sector (Wages) Source - https://www.livingin-canada.com/salaries-for-forestry-professionals-canada.html or https://www150.statcan.gc.ca/n1/daily-quotidien/190530/dq190530a-eng.htm Average wages annually $52,800/year • Forestry Sector pays between 25% to 70% higher wages than the service sector • Forestry sector personal income tax ranges are between 35% to 40%
  10. 10. Forestry Employment Source - https://cfs.nrcan.gc.ca/statsprofile/employment/ca
  11. 11. Issue facing Forestry • Softwood Lumber dispute - https://www.bnnbloomberg.ca/economics/video/overall-impact-of-softwood-lumber-dispute-minimal-for- canada-economist~1108540 or https://www.globalwoodmarketsinfo.com/canada-has-filed-appeal-against-wtos-april-ruling-in-softwood- lumber-dispute-with-us/ • Carbon Tax – Carbon tax is added on to the cost of production https://www.bnnbloomberg.ca/commodities/video/applying-carbon-tax- without-cutting-back-regulations-may-be-costly-jack-mintz~1649746 • High stumpage cost - https://www.timescolonist.com/business/teal-jones-shuts-down-logging-in-honeymoon-bay-citing-high-log-costs- 1.23841024 • Hydro Rates - https://www.drydennow.com/local/rickford-aims-to-cut-costs-for-forestry-sector • Excessive regulations - http://www.chamber.ca/media/news-releases/Canada-competiveness-ranking-drops-4-spots-in-2-years/ • Small business tax reforms - https://www.bnnbloomberg.ca/economics/video/cfib-concerned-by-potential-tax-hits-to-small-businesses- in-2019~1560874 • Forestry losses - https://www.wri.org/blog/2020/06/global-tree-cover-loss-data-2019 • PBO / Tree Fund - https://www.570news.com/2021/01/28/liberals-two-billion-trees-promise-to-cost-2-78-billion-more-than-planned-pbo- says/
  12. 12. Justin Trudeau and Forestry Sector Source - https://www.sudbury.com/letters-to-the-editor/forest-industry-isnt-a- priority-for-justin-trudeau-679008 “My predecessor wanted you to know Canada for its resources. I want you to know Canadians for our resourcefulness,” he said. “Pulp and paper workers ask Trudeau to fight for their jobs ”Source - https://unifor.org/en/whats- new/news/pulp-and-paper-workers-ask- trudeau-fight-their-jobs Source – April 13, 2018
  13. 13. Technology / Forestry Sector Source - https://www.woodbusiness.ca/how-technology-is-transforming-bcs-forest-industry- 5248/ • Investment into new technologies is revolutionizing the way Canada’s forest industry does business. The federal government reports between 2005 and 2015, Canada’s forest industry cut its total energy use by 31 per cent and reduced its greenhouse gas emissions by 49 per cent by generating bioenergy from waste products and increasing energy efficiency. • AI and Forestry - https://www.weforum.org/agenda/2018/09/ai-can-help-us-map-forests-down-to- each-tree/ • Automation - https://www.woodbusiness.ca/fully-automated-applying-robotic-solutions-to-the- sawmill/ • Supply Chain/Digital = https://www.poyry.com/news/articles/how-will-digitalisation-boost- forestry-operations • Analytics and Forestry Management - https://www.ibmbigdatahub.com/tag/6399
  14. 14. West Fraser Forestry Source - https://www.canadian manufacturing.com/fina ncing/west-fraser-says- worst-of-its-b-c-mill- cuts-done-after-wave-of- curtailments-236315/
  15. 15. Softwood Lumber - History Source - https://www.citynews1130.com/2019/09/04/b-c-lumber- industry-celebrates-nafta-panel-decision-in-trade-dispute-with-us/
  16. 16. Carbon Sink
  17. 17. De-forestation https://www.nationalge ographic.com/environm ent/global- warming/deforestation/
  18. 18. Poor Urban Planning • Governments around the world need to re- think urban planning - https://www.slideshare.net/paulyoungcga /urban-planning-issues-facing-urban- planners-april-2019 or https://www.slideshare.net/paulyoungcga /urban-and-rural-planning-whats-next
  19. 19. Eco-Terrorism and other ignition points There has been a rise in eco-terrorism • Australia bushfires - https://www.bbc.com/news/world-australia-50568026 • BC Wildfires - https://vancouversun.com/news/local-news/rcmp-say-arson-behind-29-okanagan- wildfires-over-last-four-years • Amazon - https://www.washingtonpost.com/world/the_americas/arsonists-are-torching-the- amazon-this-elite-team-of-firefighters-stands-in-their-way/2019/10/08/525330f4-d8a8-11e9-a688- 303693fb4b0b_story.html • California Appl Fire caused by a poorly maintained car - https://www.mercurynews.com/2020/08/04/apple-fire-at-26450-acres-relief-crews-for-weary- firefighters-arriving/ • Oregon Fires - https://ktvz.com/news/fire/2020/07/28/three-suspicious-la-pine-area-wildfires- investigated-as-arson-tips-sought/ Source - https://www.slideshare.net/paulyoungcga/is-the-world-headed-to-more-ecoterrorism
  20. 20. Forestry Fires Fire was purposely set/Eco-Terrorism San Jose Fire/Cal Fire Power Lines Balloon collides with power line that sent sparks to the ground • Mitigation • More insulation of wires - https://energized.edison.com/stories/insulated-wires-help-reduce-wildfire- risk • Use of AI and Data Analytics in terms of forest prevention/detection
  21. 21. Governmen t Cutbacks / Environme nt/ Audits • Could it be the cuts in key areas along with poor urban planning makes the narrative for the govt look good in terms pro climate change? https://www.slideshare.net/paulyoungcga/urban-planning-issues-facing-urban-planners-april- 2019 or https://www.slideshare.net/paulyoungcga/forest-management-practices-world-april-2019 or https://www.slideshare.net/paulyoungcga/environment-canada-whats-next • Lack of a flood map - https://www.insurancebusinessmag.com/ca/opinion/updated-flood-maps- coming-to-canada-78259.aspx • Rail and Fire - https://www.cbc.ca/news/canada/sudbury/ontario-government-sues-cn-rail-for- millions-in-firefighting-costs-1.2927083?fbclid=IwAR2_hehuCPiCxUrKa16hfbVhf1JXOT- tkwRrNNTZwPu8FFnUxgVVLYx3198 • Parks Canada - https://www.hellulandnews.com/science/2017/8/21/the-failure-of-parks-canada • Budget cuts – Feds - https://nationalpost.com/news/politics/federal-government-cutting-back-on- disaster-assistance-as-floods-become-more-severe • PQ Floods = https://www.theglobeandmail.com/news/national/quebec-floods-recede-but- competing-demands-fill-prevention-debate/article34981361/ • Wildfire mgmt. https://edmontonjournal.com/news/politics/alberta-premier-rachel-notley- defends-cut-in-wildfire-budget • Auditor/Tree planting - https://globalnews.ca/news/5201294/ontario-government-cancels-tree- planting- program/beta/?utm_expid=.kz0UD5JkQOCo6yMqxGqECg.1&utm_referrer=https%3A%2F%2Fww w.google.com%2F “A spokeswoman for Natural Resources and Forestry Minister John Yakabuski said the government is committed to balancing the budget in a responsible manner. Justine Lewkowicz said in a statement that the forestry industry, which depends on a sustainable supply of wood, is a responsible steward of the province’s forests. On average, the forestry industry plants 68 million trees per year, creating jobs for foresters, nurseries, and tree planters,” she wrote.” – This was make work project that never generated the benefits
  22. 22. Automation • Using drones to plant trees - https://www.nextbigfuture.com/2020/06/flash- forest-and-tree-planting-with- drones.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed %3A+blogspot%2Fadvancednano+%28nextbigfuture%29 • Innovation / planting - https://www.fastcompany.com/90504789/these-drones- can-plant-40000-trees-in-a-month-by-2028-theyll-have-planted-1-billion • Tree Planting / Drones - https://www.standard.co.uk/news/world/treeplanting-drones-could-help- restore-world-s-forests-a4116376.html
  23. 23. Canada Boreal Forest • Canada’s boreal forest make up 9% of the world forest - https://www.nrcan.gc.ca/our-natural-resources/forests- forestry/how-much-forest-does-canada-have/17601
  24. 24. Siberia • Eco-Terrorism - https://www.themoscowtimes.com/2020/04/29/siberian-officials- suspected-of-starting-wildfires-a70137 • Lighting strikes - https://www.bbc.com/news/world-europe-49125391 or Zombie fires - https://eos.org/articles/the-rise-of-zombie-fires • Forest management practices - https://www.euractiv.com/section/biomass/news/forestry-seen-as-key-to-russian- climate-change-efforts/ or https://www.latimes.com/world-nation/story/2019-08- 21/russia-siberia-forest-fires-policy-change
  25. 25. Forest Fires – BC and California https://www.linkedin.com/posts/paul-young-055632b_blog-forestry-management-and-california- activity-6703181159909724160-qWzg I think all levels of government need to take a hard look at how they managed their forest to mitigate the impacts of wildfires
  26. 26. Audits • Significant financial-control weaknesses / NS Forestry and Land - https://globalnews.ca/news/6095967/nova-scotia-auditor-general-financial-report/ • Forestry Management / City of Toronto - https://globalnews.ca/news/5221912/toronto-forestry-crews-audit/ • Audit – Clear Cut and Water Management - https://thenarwhal.ca/muddied-waters- how-clearcut-logging-is-driving-a-water-crisis-in-b-c-s-interior/ • Tree planning / Corporations - https://www.terracestandard.com/news/skeena- sawmills-in-terrace-contracts-local-firms-for-2020-reforestation-projects/ • Timber Audits - https://www2.gnb.ca/content/gnb/en/news/news_release.2020.10.0543.html • Australia - https://www.smh.com.au/environment/conservation/multiple-problems- with-state-logging-agency-damning-audit-reveals-20201008-p563dj.html
  27. 27. California / Fires Source - https://www.latimes.com/california/story/2020-09-11/california-wildfires-climate-change-gavin- newsom-trump • California has done poor job with management of its forests - With CA ablaze, Newsom blasts Trump admin for failing to fight climate change Source - https://wattsupwiththat.com/2019/05/14/californias-government- solely-responsible-for-states-forest-management-and-wildfire-debacle/ It is time to for governments to bring in better forest mgmt. practices • https://www.slideshare.net/paulyoungcga/fiscal-and-economic-management-state-and-local-government- united-states
  28. 28. LPC / Tree Planting • https://tnc.news/2020/11/02/government-says-no-plan-or-budget-for-trudeaus-two-billion-trees- promise/ More lies from the Liberals under @JustinTrudeau and @cafreeland when it comes to the environment Here is my work on the environment - https://www.slideshare.net/paulyoungcga/clean-technology- and-the-green-economy-what-is-next (see slide 53 and 57)
  29. 29. Latest / Softwood Lumber • Duties – Softwood - https://www.supplypro.ca/canada-calls-us-softwood- lumber-duties-unfair/ • USA Commerce and Softwood Lumber - https://www.woodworkingnetwork.com/news/woodworking-industry- news/commerce-lowers-canadian-softwood-lumber-duties-reactions-mixed • USA and Trade - https://biv.com/article/2020/11/biden-will-be-better- canadian-resource-exports-analysts-say
  30. 30. What’s next • All level of governments need to work on integrated strategy for Forestry including streamlining regulations, tax fairness, hydro, fees, etc. - https://www.slideshare.net/paulyoungcga/2019-election-canada-and-global-competitiveness-may-2019 • GDP - https://www2.slideshare.net/paulyoungcga/gdp-and-fiscal-management-canada-september-2020 • Next government needs to push for reforms at WTO including a better dispute mechanism, reduction in protectionism policies, etc. - https://www.slideshare.net/paulyoungcga/why-do-we-need-the-wto • The next government needs to stop looking for ways to tax business, i.e. carbon tax or plastic tax or other taxes. – There is a need to reform government - https://www.slideshare.net/paulyoungcga/how-to-reform-local-and-municipal-government • More balance to support natural resources in a sustainable way - GDP growth pre-COVID was running at 2.0% which is about the same rate as the past 20 years - https://www.slideshare.net/paulyoungcga/canada-slow-growth-liberal-party-of-canada-december-7-2016 Trudeau introduce policies that did little to get goods to market or support small business - https://www.slideshare.net/paulyoungcga/canada-whats-next-for-small-business or https://www.slideshare.net/paulyoungcga/canada-natural- resources-sector-whats-next • The next government needs to focus on port expansion as part of supporting getting goods to market. • Investors - https://www.thewhig.com/commodities/agriculture/investors-skittish-on-lumber-companies-despite-record-prices/wcm/390e2df1-e966-4ac5-a307- 99b6a3a84667?video_autoplay=true • Thinning trees - https://www.marketwatch.com/story/better-forest-management-means-thinning-trees-and-will-cost-billions-of-dollars-11602685924 • Climate activism focus on the worse scenarios to push their agenda - https://www.slideshare.net/paulyoungcga/canada-clean-technolgy-and-the-green-economy or https://www.slideshare.net/paulyoungcga/the-real-truth-about-emissions-and-carbon-taxation • All Governments need to re-look at their forest management practices - https://www.pewtrusts.org/en/research-and-analysis/reports/2020/05/how-states-pay-for-natural- disasters-in-an-era-of-rising-costs • BC - https://www.thestar.com/news/canada/2020/10/15/horgan-commits-to-paradigm-shift-in-old-growth-forest-management.html • Quebec / Forest Management - https://www.woodbusiness.ca/mei-quebecs-forest-management-is-leaving-money-on-the-table/

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Blog – What is next for the Forestry Sector? 1. Lumber prices and shortages - https://www.vox.com/22410713/lumber-prices-shortage 2. USA pushes for a new softwood lumber deal - https://www.theglobeandmail.com/business/article-us-home-builders-push-for-new-us-canada-softwood-deal/ 3. Housing market - https://globalnews.ca/news/7835278/toronto-home-sales-up-april-2021-trreb/ 4. High costs of construction materials - https://www.stcatharinesstandard.ca/ts/business/2021/05/03/in-your-corner-with-sky-high-construction-costs-should-you-hold-off-on-your-home-renovation.html 5. Lack of capacity - https://seekingalpha.com/news/3689871-lumber-futures-extend-rally-to-all-time-highs-sawmill-owners-eye-more-profits 6. 3-D housing - https://www.wfaa.com/article/news/nation-world/netherlands-3d-printed-homes/507-aca3ad94-7173-47b1-b9a8-f1c2d0d19583 7. Forest management - https://climatenewsnetwork.net/only-intact-forests-can-stave-off-climate-change/ 8. Funding / https://www.newswire.ca/news-releases/funding-available-for-canada-s-indigenous-forest-sector-870812531.html 9. Apple/forestry management - https://www.apple.com/newsroom/2021/04/apple-and-partners-launch-first-ever-200-million-restore-fund/ 10. Upgrading mills - https://www.woodbusiness.ca/maximizing-potential-industry-veteran-leads-the-charge-to-upgrade-ontario-mill/

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