Selective Cuttings

East and West – a shift of the historical distribution and dynamics of Canadian pulp production

July 23, 2015

It has long been accepted as a fait accompli that Eastern Canada is dominated by pulp and paper product manufacturing while Western Canada is dominated by wood product manufacturing. However, with 67% of all Canadian wood pulp exports, British Columbia, Alberta and Saskatchewan are the powerhouse of Canadian market pulp.

So let’s have a closer look at the distribution of wood pulp production in Canada.

Looking beyond exports to actual production, Eastern provinces do indeed produce more total wood pulp than the Western provinces although this hegemony breaks down at the level of specific types of pulp (see graph). Noticeably, British Columbia does remain the lead producer of Northern Bleached Softwood Kraft (NBSK) with 57% of Canadian production but Quebec tops semi-chemical pulp production (46%). The most significant difference between east and west is that a large proportion of the pulp produced in eastern provinces is used in the manufacture of paper products.

Annual wood pulp production by region (2013)

 Tonnes per year pulp production at the lines level, as of the first quarter of 2014. Only pulp made from wood fibre is included.

British Columbia pulp producers share with British Columbia lumber producers the benefit from easier access to key Asian markets, which have grown to become Canada’s top pulp export market by value – with the majority of the exports coming from British Columbia. With a decline in demand from such traditionally important markets as the US and Western Europe, access to the growing Asian market has sustained solid exports from British Columbia and Alberta, while Eastern Canada pulp producers, remaining highly dependent on the US have seen shipments of both pulp and paper weaken.

 Graph 2. Total pulp exports (encompassing everything under HS Code 47) to China/Taiwan/Hong Kong, to the United States, and to the rest of the world from 1995-2014.  Graph 3. Total pulp exports (encompassing everything under HS Code 47) by region to China, Taiwan and Hong Kong from 1995-2014.

Looking ahead, Asian markets will be key to the ongoing strength of western Canada pulp production while eastern Canada pulp production is vulnerable to the ongoing decline of printing and writing paper in North America and could therefore continue to experience curtailments.