Resource-based Industries and High-tech Manufacturing

 

The link between primary industries and manufacturing

The primary industries include establishments that raise, harvest or extract renewable or non-renewable resources. There are strong links between these industries and the resource-based manufacturers that process the raw materials they produce.

Renewable and non-renewable resources

Forestry and fishing, hunting and trapping are based on harvesting a renewable resource-one which, if properly managed, can be sustained indefinitely as long as there are no natural catastrophes. Forests can be replanted, and fish stocks can usually be replenished, given enough time. Agriculture is considered a resource-based industry because, like forestry and fishing, the industry involves cultivating, raising and harvesting living things that occur in nature.

In contrast, the mining sector is engaged in extracting a non-renewable resource. The ores, sand, stone, coal, oil and gas that are mined in the province occur in nature, but once they are removed they cannot be replaced. The ability to continue extracting these resources over time is limited because there may only be a finite amount of the resource available, and the ability to continue extracting it depends on exploration or prospecting to locate new sites where the resource already exists.

Most of these resource products have only limited usefulness in their raw form. They must be processed and transformed into other products before they can be used, either as inputs into further production, or as a final product.

These processes may be as simple as cleaning and packing fish, or grinding wheat into flour. Sometimes they're more complicated. For example, gold that has been dug out of the ground (or panned from a stream) must first be refined to remove any impurities or other trace metals. The refining process can be simple or complex, depending on the amount of metal that's in the ore. Refined gold is then formed into bullion or bars which can be sold to investors or manufacturers of jewelry and other ornamental products. The processing may be done on site at the mine, or the ore may be shipped offsite to a smelter or refinery.

The resource sector

Agriculture, forestry, fishing, hunting and trapping and mining, oil and gas extraction are the main suppliers of raw materials for many of the province's manufacturing industries. For this reason, resource-related manufacturing is sometimes lumped together with the primary industries in order to highlight the inter-relationships.

We call these industry groupings sectors, and there are three main resource-related sectors in the BC economy: the forest sector, the agriculture, fishing and food sector, and the mining and mineral products sector. The resource sector includes all three of these groups. It used to employ about half of the people working in goods-producing industries, and 13% of the total workforce. Currently, about 9% of BC workers have jobs in the resource sector.

Employment in resource-based industries has been flat since 1990

The forest sector

The forest sector includes forestry and logging, as well as wood and paper manufacturing. Wood manufacturing includes producers of lumber, plywood, veneer and other wood products such as doors, windows, pallets and particle board. The paper industry includes producers of pulp, newsprint, cardboard, stationery, paper towels and other types of paper products.

BC is one of the world's largest suppliers of pulp and paper, and is the biggest producer of softwood lumber in the country. The province is a major source of lumber that's used in housing construction in the US as well as other parts of Canada. Wood and paper production together accounted for 41% of the total value of manufacturing shipments in 2005.

The forest sector has been undergoing tremendous changes. A lot of millwork used to be done in small mills located near the forest resource. Many of these mills have now closed and timber is being shipped for processing by more efficient, larger mills in central locations. Our major trading partners used to be the United States and Europe. The US is still our biggest international customer, but Japan, Korea, and other Asian nations now account for a larger share of BC's exports than Europe does.

Due to its reliance on world markets, the forest sector is particularly susceptible to economic upswings and downturns in the rest of the world. The industry is also facing a number of challenges such as coping with concerns about environmental issues and dealing with competition from producers of wood and paper in Europe and Asia. New technology and changes in the demand for forest products have also had a major effect on BC's forest sector.

In 2005, there were 79,700 forest sector workers employed in BC. More than half (45,800) of them worked at sawmills and other wood manufacturing establishments. Logging, reforestation, and related activities employed 21,600 people and there were 12,300 people working in the paper industry.

Despite the effects of the ongoing softwood lumber dispute with the US, employment in BC's wood industry has been relatively stable during the last fifteen years. However, there are a lot fewer people working in the paper (-36%) and logging (-18%) industries.

There have been job losses in the logging and paper industries

Much of the province's paper production takes place in the Vancouver Island and Lower Mainland areas. On Vancouver Island, these workers are mainly located in the central and northern areas of the island. Mainland/Southwest and Cariboo are other regions where there are a lot of forest sector jobs. Sawmills are located in the Interior as well as in Coastal areas of the province.

Agriculture, fishing & food

The agriculture, fishing and food sector includes agriculture, fishing, hunting and trapping, as well as food, beverage and tobacco manufacturing. Food manufacturers produce fish, meat and dairy products, as well as frozen and canned fruits and vegetables, and other more highly processed products such as baked goods and confectionery. Beverage manufacturing includes wineries, as well as producers of soft drinks, beer and other types of alcohol.

The agriculture, fishing and food sector employed 72,300 British Columbians in 2005, only slightly less than the number working in the forest sector. Fishing, hunting and trapping (2,100), aquaculture (2,100), and seafood processing (3,700) activities accounted for 11% of the jobs. The rest of the people worked in agriculture (38,700), food (22,700 excluding seafood) and beverage and tobacco (5,100) manufacturing. Bakeries (7,500) and meat processors (5,200) were the biggest employers in the food industry.

The number of jobs in agriculture and food & beverage manufacturing is climbing

Mining & mineral products

This sector includes mining, oil and gas extraction, as well as non-metallic mineral production, primary and fabricated metals, and petroleum and coal products. Non-metallic mineral products include cement, concrete, gypsum, clay and glass. Primary metals are metals that have been smelted or refined, and are shaped into simple forms, such as ingots, rods, bars, sheets, pipes and tubes. Fabricated metals are in more complex forms: boilers, tanks, containers, hardware, nuts, bolts, doors, cutlery and so on. The petroleum and coal products industry refines crude petroleum and coal into intermediate products.

Minerals and metals are used to make many different products ranging from TV sets, CDs, computer chips, telephones, cars, trains, and bikes to food, medicine and vitamins.

Companies in the mineral products industries process ores and smelt them into bars and ingots, or use metals and other mineral products to produce doors, pipes, wire, tools, nuts and bolts and so on.

Many of the raw materials used by the mineral products industry are mined in BC, but there are some key exceptions. Aluminum manufacturing is one of the main activities in BC's primary metal manufacturing industry.

However, neither bauxite nor alumina, the raw materials used to make aluminum are found in the province. The industry relies on alumina imported from Australia, from which aluminum metal is extracted using chemical and electrolytic processes. BC's aluminum industry exists mainly because of its access to cheap electricity, since a lot of electric power is consumed in the smelting process. In the case of the Alcan smelter in Kitimat, a hydroelectric generating station was built at Kemano to provide power to the smelter. Aluminum is used to make doors, window frames and other construction materials, as well as containers and packaging, consumer durables and machinery and equipment.

The lead-zinc smelter in Trail relies on power produced by a dam owned by the company, and also supplies BC Hydro with its excess power. Ore from Alaska, other parts of the US and South America is smelted in Trail.

Total employment in the mining and mineral products sector was 45,700 in 2005. Metal fabricating (18,100) is the biggest employer in the sector. This industry has seen significant job growth during the last fifteen years, nearly doubling the number of people on the payroll. Most of the workers are employed making structural metal products such as doors and other architectural products (7,900) or in machine shops (6,400).

The number of jobs in metal fabricating has nearly doubled since 1990

Primary metal manufacturing employed 6,700 British Columbians in 2005. Nearly half (3,000) of them worked in the aluminium industry. Cement (3,000) and glass (1,700) production dominates in the non-metallic mineral products industry, where employment totalled 6,600 in 2005. The rest of the workers in the sector are employed in mining, oil and gas extraction (13,800), or in the petroleum and coal products industry, which has fewer than 1,000 workers.

High-tech manufacturing

BC's high-tech sector includes both manufacturing and service sector activities. Manufacturers of pharmaceuticals, semiconductors, telecommunications equipment, navigational equipment, computers and electronics, aerospace and other related products are all included in the definition of the high-tech sector.

An estimated 13,100 people were employed in high-tech manufacturing in 2005. Employment in this sector peaked at about 15,200 in 2001, but the industry in BC was affected by a global downturn in high-tech industries that occurred at the beginning of this decade. Employment in high-tech manufacturing industries has been declining during most of the period since then.

High-tech industries became an important force in the economy during the 1990s, a period during which the computer and related electronic products were beginning to be widely used by businesses and individuals. These industries experienced very rapid growth during the 1990s. Unfortunately there isn't a consistent set of data for the high-tech sector that goes all the way back to 1990. The earliest year for which the information is available is 1997.

Employment in high-tech manufacturing is still declining