Marie, September 26-27, 1968. A total of 101 new scalers 

 were licensed at these courses, and 1,573 licences were 

 renewed for a three-year period. 



MARKETING AND 

 FOREST ECONOMICS 



Throughout the 1968-9 fiscal year, Canada's economy as a 

 whole might be described as buoyant. Within this general 

 context, the principal components of the forest-based in- 

 dustries provide a splendid example of the effect of the 

 forces of supply-demand on product prices, as shown 

 below: 



Industry Selling Price Indexes* 

 (1956=100) 



'Source: Canadian Statistical Review. 



The causative events underlying these figures, which are 

 for Canada, mostly lie outside this province. New construc- 

 tion of pulp mills had added capacity at a faster rate than 

 the increase in demand, forcing prices downward. The cur- 

 rent surplus in newsprint (due in part to a decrease in 

 newspaper advertising) has held in check a general rise in 

 paper prices. On the other hand, lumber and plywood have 

 been in very short supply because British Columbia exper- 

 ienced unusually heavy snowfall, which prevented logging 

 and hauling operations, and mills closed as their inventory 

 of wood was drawn down. Since March, prices of these 

 products have reverted to normal levels. 



The total volume of Crown timber cut in the province in 

 1967-8 was 436 million cubic feet (up three per cent from 



the previous year). Early indications are that the 1968-9 cut 

 may be somewhat less than the above figure. 



In contrast, the production of pulp chips from mill waste 

 reached a total of 670,764 bone dry tons in 1968, an increase 

 of almost 140 thousand tons or 26.4 per cent for the year. 

 The production graph since 1960 corresponds very closely 

 to a 19-per-cent compound-interest curve. 



The highlight of this Unit's activity for the year is repre- 

 sented by the report entitled "The Ontario Forest Industry: 

 Its direct and indirect contribution to the economy". In 

 this study, which was directed by Hedlin, Menzies and 

 Associates Ltd., the objective was to measure the total 

 revenue to governments that could be attributed to em- 

 ployment and manufacturing in the forestry sector. Much 

 of the research in statistics, on which the analysis was based, 

 was carried out through this Unit. 



The report shows that the Northwestern Economic Region 

 has the greatest dependence on forest industries, and that 

 69 per cent of all manufacturing employment in that area is 

 wood oriented. A total of 78,000 man-years of employment 

 is provided by Ontario forest industries; an additional 

 135,000 in service and supporting industries gain employ- 

 ment by virtue of timber utilization. This is a ratio of 1 :1.73 

 in direct to indirect employment. 



It is estimated that $104.3 millions of the provincial 

 revenue, and $184.2 millions of the federal revenue, in 1968, 

 can be traced to forest-based activities, at the primary level 

 of cash flow. Through respending, these amounts would 

 have a multiplier effect on government revenues. 



A very large part of the information provided in this 

 report has never been available previously, and it makes 

 interesting statements on the relationship between indus- 

 tries. For example, some 28 million tons of raw materials 

 and finished commodities hauled by the transportation in- 

 dustry, representing a massive 25 per cent of rail freight 

 revenues, originated with the forest industry. Another im- 

 portant item shown in the report is that the degree of woods 

 industry manufacturing in Ontario is much greater than for 

 the rest of Canada. For every 100 cubic feet of roundwood 

 processed, the value added by manufacture is $107 in 

 Ontario, $65 in Quebec, and $37 in British Columbia. 



In addition to this special assignment, the Unit continued 

 to promote industrial expansion, carry out economic analysis 

 of timber production, collect and compile statistics, and to 

 license mills. Preliminary work was undertaken for a survey 

 to determine the characteristics and attitudes of private land 

 owners in southern Ontario particularly with respect to 

 recreation, hunting and fishing, and commercial timber pro- 

 duction. The survey, itself, will be carried out during the 

 1969-70 fiscal year. 



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