Wonderful. Thank you very much, Mr. Chair.
Good morning, committee members. I would like to begin by recognizing that we are on the ancestral land of the Algonquin Anishinabe people.
I'm Greg Smith. I'm the director of the economic analysis division of Natural Resources Canada's Canadian Forest Service. I'm here representing the trade, economics and industry branch in the Canadian Forest Service. Thank you for inviting me.
Canada is a steward of a vast forest resource. Our 367 million hectares represent 9% of the world's forests.
From harvesting trees to producing everyday essential goods, the forestry sector is a key pillar of the Canadian economy. Contributing approximately $33 billion to GDP, it directly employs over 200,000 people, including 11,000 indigenous people.
The forestry sector is particularly important in many rural, remote, and indigenous communities, where it is often a primary source of jobs and income. Forests also sustain over 1,400 indigenous businesses and joint ventures across the country.
Nearly 90% of Canada's forests are owned by provincial and territorial governments that have jurisdiction over the management of these forests.
Canada's forest laws are among the strictest in the world. The provinces and territories develop and enforce laws and policies that protect our forests, and ensure that sustainable forest management practices are followed across the country. They manage forests for multiple public policy objectives, including conservation, water, soil quality, biodiversity, socio-economic benefits and climate resilience. In fact, nearly 160 million hectares, or about 70% of our managed forests, are third party certified.
These certifications complement Canada's comprehensive and rigorous forest management laws and regulations and provide assurance that a forest company is operating legally, sustainably and in compliance with world-recognized standards. A certification is issued only after a thorough review by a third party auditor determines that, among other things, the long-term harvests are sustainable and there is no unauthorized or illegal logging, wildlife habitat is preserved, and soil quality is maintained.
Canada harvests over 700,000 hectares of forest area each year, about 0.2% of our total forest area. In comparison—and we worked on this comparison for a while—that's roughly the size of a smartphone on a ping-pong table.
The pulp and paper industry is a key segment in Canada's forestry sector supply chain, consuming residual material from sawmills to create pulp and paper products. Across Canada, there are over 80 operating pulp and paper mills and facilities. Quebec houses the lion's share of these facilities, with about 43%. Quebec has also been a leader in developing its bioeconomy by exploring innovative uses of forest biomass and supporting the development of higher value-added products from harvested wood.
Part of managing a forest sustainably means adjusting annual harvest levels over time to account for changes in the forest, such as disturbances from forest pests and wildland fire. Over the last decade, these natural disturbances have had a significant impact on sustainable harvest levels and, consequently, on the wood fibre available to make forest products. This challenge has urged Canada's forestry industry to increase the value it receives from what is harvested. Obtaining more value for every cubic metre harvested allows Canada to position itself as a leader in a growing global bioeconomy and enhance its economic resilience in the forestry sector.
At Natural Resources Canada, we work with provinces, territories and industry stakeholders to ensure that Canada's forestry sector has the support it needs to take advantage of the opportunities presented by the growing bioeconomy, and to continue to support workers and communities across the country.
One of our objectives is to develop strategies to help strengthen competitiveness and the overall health of Canada's forest sector, and to support the future livelihoods of workers in their communities in a transition to a low-carbon global economy.
Budget 2023 proposes to provide $368 million over three years, starting in 2023-24, to renew and update forestry sector support, including for research and development, indigenous and international leadership, and data.
Thank you for inviting me. I would be happy to answer any questions about the forestry sector and its management in Canada.