Canadian Occupational Projection System (COPS)

Industrial Summary

Paper Manufacturing

NAICS 3221; 3222

This industry comprises establishments primarily engaged in manufacturing pulp and paper as well as converted paper products (such as paperboard boxes, corrugated boxes, fibre boxes and sanitary food containers). Pulp and paper is the most important of the two segments, accounting for 53% of production in 2016. Overall, the industry is export intensive as more than two-thirds of its revenues come from foreign markets, largely from the United States. The two segments, however, do not face the same degree of exposure to domestic and foreign economic conditions. Converted paper is highly dependent on domestic demand, with 65% of its production sold within the country. In contrast, pulp and paper is far more sensitive to foreign demand, with exports accounting for more than 85% of its production, largely shipped to the United States (60% of exports) but also to China (23%). The industry employed 60,200 workers in 2016 (3.6% of total manufacturing employment), with 59% in pulp and paper and 41% in converted paper products. Employment is mainly concentrated in Quebec (36%), Ontario (34%) and British Columbia (14%), and the workforce is primarily composed of men (81%). Key occupations (4-digit NOC) include:

  • Paper converting machine operators (9435)
  • Labourers in wood, pulp and paper processing (9614)
  • Papermaking and finishing machine operators (9433)
  • Power engineers and power systems operators (9241)
  • Supervisors, forest products processing (9215)
  • Pulp mill machine operators (9432)
  • Plateless printing equipment operators (9471)
  • Chemical engineers (2134)
  • Pulping, papermaking and coating control operators (9235)

* Key occupations for manufacturing industries in general also include: Manufacturing managers (0911); Construction millwrights and industrial mechanics (7311); Material handlers (7452); Shippers and receivers (1521); Transport truck drivers (7511); Industrial engineering and manufacturing technologists and technicians (2233); Industrial electricians (7242); and Industrial and manufacturing engineers (2141).

The industry has been through difficult times since the early 2000s as the rapid increase in the digitization of information and media has led to a long-term structural decline in demand for paper products, particularly newsprint. Moreover, stronger competition from abroad, notably from South American producers, combined with the significant appreciation of the Canadian dollar, left many pulp and paper mills facing competitiveness challenges. These problems were compounded by the collapse of the U.S. housing market, which led to numerous closures in domestic sawmills. Sawmill closures damaged supply chains further downstream, hampering the ability of many pulp and paper mills to gain a steady supply of key inputs into their own production processes. These factors, combined with the global recession of 2008-2009, have forced firms to undertake major restructuring by consolidating and upgrading facilities and closing less efficient plants through mergers and acquisitions. Real GDP in the industry fell almost continuously from 2007 to 2013, before improving modestly in recent years, with the gradual re-orientation of production toward segments that have stronger demand profiles, such as paperboard containers and sanitary paper products. Employment, however, continued to contract as productivity gains were notable, supported by improving per-worker investment into machinery and equipment. On average, real GDP and employment fell at an annual rate of 2.6% and 4.3% respectively over the period 2007-2016. During that period, the industry lost 33,000 workers, representing about one-third of its workforce.

Real GDP in the paper manufacturing industry is projected to remain essentially stable over the period 2017-2026, while employment is projected to keep declining, albeit at a slower pace than the previous ten years. Production is expected to be primarily supported by exports as a result of a relatively low Canadian dollar, a stronger U.S. economy, and continued expansion into niche market opportunities. Since most of paper products are priced in U.S. dollars, a weaker currency will increase the effective price Canadian firms receive for their products, boosting revenues and profitability. Beyond the U.S. market, exports could benefit from growing opportunities in Asian markets such as China, India, Indonesia, Japan and South Korea. Furthermore, the rise in e-commerce, both globally and in Canada, is expected to boost demand for packaging, supporting the production of paperboard containers. The outlook for sanitary paper products also remains largely positive. On the negative side, growing production from competing suppliers in South America and Asia will keep putting pressures on Canadian manufacturers to consolidate operations, as firms in these regions are able to produce at lower costs and can also benefit from their closer proximity to key emerging markets. In addition, timber supply constraints in Canada and the recent imposition of duties on Canadian exports of softwood lumber to the United States are expected to hurt domestic lumber production and boost the price of this key input for paper manufacturing. The industry is unlikely to expand production beyond current level as the increasing use of electronic media and growing environmental concerns will continue to reduce demand for traditional reading and writing papers. On average, real GDP is projected to increase marginally from 2017 to 2026, up by 0.1% per year, while employment is projected to contract by 0.8% annually. While a more positive outlook for production may help mitigate the severity of future employment declines, retirements and automation will continue to put downward pressure on the size of the industry’s workforce throughout the projection period. Indeed, an aging workforce is expected to result in an increasing number of retirements, while occupations consisting of repetitive and routine tasks, such as those performed by labourers and operators, should continue to be replaced by machinery.

Real GDP and Employment Annual Average Growth Rate in Paper Manufacturing

Figure showing the annual growth of real GDP and employment over the periods 2007-2016 and 2017-2026 for the industry of Paper Manufacturing. The data is shown on the table following this figure

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

Text Version of Figure Real GDP and Employment Annual Average Growth Rate in Paper Manufacturing, 2007-2016 and 2017-2026, in Percent
  Real GDP Employment
2007-2016 -2.6 -4.3
2017-2026 0.1 -1.2

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).


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