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 and 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 & trapping are based on harvesting a renewable resource—one which, if properly managed, can be sustained indefinitely as long as there are no natural disasters. 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. Continued extraction of these resources depends on exploration or prospecting to locate new sites where the resource already exists, or on the development of new technologies that make it possible to exploit resources that were previously not practical to develop. For example, with horizontal drilling techniques, it’s now possible to get access to oil fields that were not accessible using traditional drilling methods.

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 are more complicated. For example, gold ore 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 & trapping, and mining, oil & 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 these 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 & food sector, and the mining & 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 14% of the total workforce in the late 1980s. Currently, only 8% of BC workers have jobs in the resource sector, as total employment in the sector has remained flat, while the number of jobs in other industries has increased significantly.

Employment in resource-based industries has been flat since 1990

The forest sector

The forest sector includes forestry & 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.

British Columbia 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. However, wood and paper production together accounted for just 30% of the total value of manufacturing shipments in 2008, the lowest share in nearly 50 years³². Forest products usually account for between 40% and 50% of the total value of manufacturing shipments in BC.

The forest sector has been undergoing tremendous changes in recent years. 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 US and Europe. The US is still our biggest international customer, but Japan, Korea, and other Asian nations are also important markets.

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, including the mountain pine beetle epidemic, 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. The global economic situation has had a crippling effect on the forest sector, which was already struggling before the downturn in the US housing market occurred.

There have been significant job losses in the logging, paper and wood industries since 1990

In 2008, there were 64,900 forest sector workers employed in BC. More than half (34,300) of them worked at sawmills and other wood manufacturing establishments. Logging, reforestation, and related activities employed 17,400 people and there were 13,200 people working in the paper industry.

Employment in BC’s wood industry was relatively stable during most of the period since 1990, but has begun to decline. In 2008, the number of people working in the industry was down 26% from the 1990 level. The paper (-32%) and logging (-34%) industries have seen employment decline even more.

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 & food sector includes agriculture, fishing, hunting & trapping, as well as food, beverage & 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 66,600 British Columbians in 2008, exceeding the number working in the forest sector. Fishing, hunting & trapping (2,200), aquaculture (fewer than 1,500), and seafood processing (2,800) activities accounted for less than 10 percent of the jobs. Most of the people working in this industry were employed in agriculture (33,700), food (19,500, excluding seafood processing) and beverage & tobacco (6,200) manufacturing. Bakeries (7,200) and meat processors (5,300) were the biggest employers in the food industry.

The number of jobs in agriculture and food & beverage manufacturing has increased

Mining & mineral products

This sector includes mining, oil & gas extraction, as well as non-metallic mineral production, primary and fabricated metals, and petroleum & 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 & coal products industry refines crude petroleum and coal into intermediate products.

Minerals and metals are used to make a lot of 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.

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

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 & mineral products sector was 57,400 in 2008. Metal fabricating (16,400) is the biggest employer in the sector. This industry has seen significant job growth since 1990, 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 (6,800), or in machine shops (4,600).

Primary metal manufacturing employed 5,000 British Columbians in 2008. Nearly 40% (1,900) of them worked in the aluminium industry. Cement (4,300) and glass (1,500) production dominates in the non-metallic mineral products industry, where employment totalled 7,600 in 2008. The rest of the workers in the sector are employed in mining, oil & gas extraction (25,800), or in the petroleum & coal products industry, which has fewer than 1,300 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 & electronics, aerospace, and other related products are all included in the definition of the high tech sector.

An estimated 14,600 people were employed in high tech manufacturing in 2007³³. Employment in this sector peaked at about 15,200 in 2001, but 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.

Employment in high tech manufacturing has begun to rise but has not yet returned to pre-2001 levels

High tech industries became an important force in the economy during the 1990s, a period during which computer and related electronic products were beginning to be widely used by businesses and individuals. These industries experienced very rapid growth during the 1990s³⁴.