Sale of Canada’s public forests: Economically non-viable option

Abstract

In recent years, some economists and journalists have argued that since only 7% of Canadian forests are under private ownership, Canadian public forests should be sold to private companies. In this paper, I examine and analyze global forest ownership and recent trends in the change in forest land ownership. In Canada, 26.5 million ha of forest land are under private ownership, while the area of forest land (of each country) of more than 200 countries, including Sweden, Finland, Germany, France, Japan, and New Zealand, is less than the area of Canada’s private forest land. Similarly, the forest industry in Canada owns more forest land available for wood supply than the forest industry in any other developed country except the USA and Sweden. There is no direct relationship between private forest ownership and the economic performance of forest industry in a country. I examine 3 cases of change in forest land ownership: Timber Investment Management Organizations and Real Estate Investment Trusts in the USA, restitution of forest land in economies in transition, and sale of plantations in Chile. None of the cases provide economic evidence in support of sale of Canadian public forests. I conclude that the sale of the Crown forest land will not only be environmentally, socially, and politically unacceptable, but will not be economically viable. Key words: Canada, economic performance, forest ownership, forest tenure, privatization, restitution of forest land, timber investment management organizations, wood supply