A number of forest products which produce exceptional levels of economic impact have been identified: papers containing high proportions of recycled fibre, hardwood plywood, flooring and converted paper and paperboard products, including bags, boxes and wallpaper. Manufactured wooden products which have undergone two or three stages of processing, such as doors, windows, wooden boxes, coffins, prefabricated buildings, wooden cabinets, etc, probably generate similar impacts, although we have been unable to confirm this assumption. However, products of this kind account for only an infinitesimal proportion of the forest resource and, even if they were able to quadruple their markets, would require no more than a very small proportion of the Canadian forest resource to meet the demand.

Products producing high and average economic impacts account for the roundwood equivalent of one-quarter of all Canadian exports. These include newsprint, lightweight coated paper, hardwood lumber, shingles and uncoated woodfree paper. All these export products have significant economic impact per roundwood equivalent and markets large enough to absorb a major proportion of Canada's forest resources. In comparison, our results indicate that there is little to be gained from developing exports of softwood lumber or bleached softwood kraft pulp. These products contribute relatively modestly to the Canadian economy for each cubic metre of roundwood used.

The results indicate that it is wrong to assume that lumber generates greater economic impact than paper, even taking into account the fact that most sawmill residues can be used by paper mills. If a choice must be made between the production of lumber, with the residues going to paper mills, or directly producing paper, our results show that paper should be directly produced. Obviously, if enough wood is available to permit both industries to develop simultaneously, there will be no need to choose between the two industries.

It should be noted that the results of this document are valid only under certain conditions. First of all, they are based on average real export prices for the five-year period from 1989 to 1993 inclusive. Some products, including lumber, represent groupings of a number of products which differ in size and quality, and therefore in price. A given group of products may have an average economic impact lower than that of another group but include a number of higher-impact products. For example, certain high-end lumber products may have greater economic impact than paper, despite the fact that the impact of lumber is, on average, lower than that of paper. In addition, lumber prices rose sharply in 1993-94. As a result, the economic impact of lumber was comparable to that of paper. However, the recent increase of paper prices accompanied by a decline of lumber prices cancelled out the gains made by lumber in 1993-94, re-establishing the relative position of those two products in the value-added scale.