Saw mill and planing mill product prices, similarly, re- 

 mained relatively low, but were consistent during the latter 

 three-quarters of 1970. However, financial outlays for hous- 

 ing, the major consumer of these products, turned up 

 sharply towards the end of 1970 and continued into 1971 

 increasing the demand and, in turn, the price levels of saw 

 mill products. In 1970, there was a 9.5 per cent decrease 

 in the number of dwelling starts in Canada as compared to 

 the preceding year, but the removal of certain monetary re- 

 straints and the lowering of the prime interest rate, coupled 

 with the expanded federal and provincial government hous- 

 ing programs, began to improve the market condition for 

 the saw mill and planing mill industry by the first quarter 

 of 1971. 



The lumber output of Ontario saw mills during 1970 was 

 down approximately four per cent over the previous year 

 for softwoods, and hardwood lumber production declined 

 by almost 13 per cent when compared to 1969 production. 



In contrast, the production of pulp chips from saw mill 

 waste material reached a total of 773,871 bone dry tons in 

 1970 which represents an increase of almost 74,000 tons, 

 or 10.5 per cent for the year. While the pulp chip produc- 

 tion graph for the 1960-68 period corresponded very closely 

 to a 19 per cent compound interest curve, this rate has since 

 decelerated, and the earlier anticipation of reaching the 

 one-million-ton production mark during 1972 may not be 

 realized. 



The export-oriented pulp and paper industry suffered 

 heavily because of the unpegging of the Canadian dollar. 

 Due to the ensuing appreciation of the Canadian dollar, 

 relative to United States currency, this decision resulted in 

 an immediate seven per cent decrease of revenues for pulp 

 and paper firms selling in United States markets. Further- 

 more, Canadian pulp and paper shipments to the United 

 States dropped by almost 10 per cent for some months im- 

 mediately ensuing the unpegging, thus decreasing these 

 shipments by almost two per cent for the year. 



The world market for pulp and paper products softened 

 once again, while domestic production rates dropped by 

 approximately 10 per cent to almost 80 per cent of rated 

 capacity. Another consequence of the unpegged dollar was 

 that the Canadian pulp and paper industry was no longer 

 able to compete in certain market areas of the United States. 



The Forest Economics Unit is fundamentally concerned 

 with economic analyses pertaining to the production, util- 

 ization, and marketing of timber and its products. Its other 

 functions include the promoting of the provincial forest 

 products industry, the gathering and compiling of certain 



forest products industry information, and the developing of 

 the Timber Branch library. The Unit, also, performs a service 

 function by providing advice and information relating to 

 forest products industry development to other government 

 agencies and private firms or individuals. 



SELLING PRICE INDEXES (1961 =100)* 



Veneer Saw Mills Pulp 



and and and 



Plywood Planing Paper 



Mills Mills Mills 



Year Month 



1970— April 126.3 122.6 118.7 



May 128.6 123.1 118.7 



June 129.2 122.5 116.2 



July 127.5 121.3 116.6 



August 123.8 123.1 115.6 



September 127.5 123.8 114.9 



October 129.2 121.8 115.6 



November 129.8 120.3 115.7 



December 131.0 119.5 115.1 



1971— January 132.3 122.0 115.1 



February 133.8 129.4 114.7 



March 136.7 135.0 114.8 



'Source: Statistics Canada, Prices and Price Indexes 162-002). 



LICENSING OF MILLS 



Mills licensed under The Crown Timber Act, Section 45, are 



distributed as shown in the following table. The trend to- 

 ward fewer primary mills still continues. 



Licensed Mills 



1968 



1969 



1970 



SAW MILLS 



Lumber capacity over 50 M fbm .... 27 



Lumber capacity 10 to 50 M fbm ... 101 



Lumber capacity under 10 M fbm . . 593 



Miscellaneous sawn products 99 



VENEER MILLS 29 



PULP MILLS 25 



TOTAL 874 



869 



858 



116 



