Replica | No, the forestry industry is not highly subsidized

The Quebec Forest Industry Council would like to respond to the assertion of columnist Philippe Mercure according to which the Quebec forest industry is “highly subsidized^⁠1 ».

The latter is based on a limited number of sources and ignores certain elements that we consider fundamental to forest management.

From the outset, we must keep in mind that the government of Quebec is the largest forest owner in North America with a forest territory of 900,000 km^⁠2. This territory is developed responsibly, balancing portions devoted to environmental protection with those having a social vocation and those having an economic vocation.

As such, the State has the responsibility to maintain a healthy forest and the expenditures of SOPFEU and SOPFIM serve this purpose, without regard to the purpose of the forest, whether commercial or not.

The responsibilities of the State as owner

With their objective of curbing the spread of insect infestations regardless of whether the areas are intended for forest harvesting or whether they are located in conservation or recreational tourism areas, SOPFIM’s actions benefit everyone.

Same thing for SOPFEU, whose mission and priorities have changed since the adoption of Bill 50. It must now prioritize the protection of communities and strategic infrastructure, with forest assets being relegated to a secondary role.

It is therefore surprising, in our opinion, to read that IRIS, in a study cited by Philippe Mercure, considers these investments as subsidies to the forestry industry.

Investments in nurseries and those intended for silvicultural work are costs that every forest owner must assume to grow their assets. It is only with silvicultural work carried out over long periods that a producer can maximize the socio-environmental benefits generated by the forest or the income he obtains from the sale of the wood he chooses to put up for sale. .

A subsidized industry?

To rule on this question, it would have been wise, in our eyes, to refer to the panel of the World Trade Organization (WTO) which had to deal with the complaint filed against Canada and Quebec by the American government. To process the case, this body used a team of independent international experts who examined the accounting books of the government and the companies concerned.

After in-depth study and full access to all the information, the finding is unequivocal: Canada and Quebec do not subsidize their forestry industry to the point of justifying the imposition of compensatory tariffs.^⁠2.

That being said, the forestry industry, like many other sectors of activity, benefits from general, non-specific support from the Quebec state. Workforce training, risk coverage or financing programs are not exclusive to it. Again, the WTO does not consider these programs to be direct subsidies.

Wood drives the economy

Regarding the part of the territory that the State chooses to devote to the harvesting and valorization of trees, a study carried out by PricewaterhouseCoopers (PwC) in 2021^⁠3 indicates that 10% of state revenue comes from cutting rights, while 90% is linked to taxation and parafiscal charges from wood processing. The higher the quality of the wood, the greater the added value obtained. The State therefore has every interest in taking care of its forests.

Present in all regions of Quebec, the forestry industry supports some 130,000 jobs. With average salaries today around $90,000, these are paying and very structuring jobs.

It is not surprising that so many elected officials and chambers of commerce are panicked by the announced temporary closures. As for Quebec taxpayers, they should also be concerned about the situation since each cubic meter transformed by the forestry sector brings in more than $200 to governments, or nearly $6 billion annually. Maintaining our social safety net needs this income.

No wood, not much

So, is the forestry industry highly subsidized? Not at all!

The Quebec state, the owner of the forest, is responsible for its health. He chooses to invest sums to protect his forest against fires and insects and to ensure that it continues to generate economic, social and environmental benefits.

The forest is essential to achieving the objectives that Quebec has set for itself. It is thanks to the renewable material it provides, wood, that we will replace single-use plastics and build greener. It is thanks to the forest that we will build tomorrow and offer Quebecers a prosperous and sustainable future.

1. Read the column “Yes, our taxes support the forest industry”

2. Read the full World Trade Organization report

3. Consult the PricewaterhouseCoopers study

What do you think? Participate in the dialogue