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Capital Investments in the Canadian Forest-Product IndustriesHistorically, capital investment in the Canadian forest sector has beensubstantial and has accounted for an important share of expendituresfor plant and equipment in the economy as a whole. In 1971, 1976, and1981, for example, capital expenditures in the forest sector amountedto $1145 million, $1939 million, and $4442 million or 4.5 per cent, 3.7 percent, and 4.4 per cent respectively of total capital expenditures in theCanadian economy in those years. Even in 1984, a year when capitalexpenditures in the forest sector declined, they still accounted for 3.4per cent of the total (Table 5.1). In most years the forest sectoraccounts for about one-quarter of capital expenditures in themanufacturing sector. If construction expenditures are excluded therelative importance of the forest sector increases by about 4 per centwith respect to capital and repair expenditures on machinery andequipment and about 3 per cent with respect to capital expendituresonly (Table 5.2).Within the forest sector the paper and allied industries accountfor the lion's share of capital expenditures (Table 5.3). In the peak yearof 1981,for example, paper and allied industries accounted for 69.0 percent of total expenditures and 77.6 per cent of capital expenditures onmachinery and equipment. The wood-processing industries typicallyaccount for about 20 per cent of Canadian expenditures whether totalcapital expenditures or only capital expenditures on machinery andequipment are compared. Forestry, however, is relatively more importantwhen total expenditures are compared than when machineryand equipment only are compared.In fact, technology in the form of plant and equipment hasbecome increasingly important during the 1970s especially in the pulpand paper industry. In 1973, for example, about $8.86 billion worth ofcapital was employed in the pulp and paper industry; in 1983 thisfigure had increased to $36 billion.' Associated with this trend is asharp increase in the level of capital intensiveness as measured bycapital employed per employee. As Woodbridge notes, "in 1950, foreach employee, the industry invested $22000 of capital. Even asrecently as 1970, this was still around $81000 per employee, in currentdollars. By 1983, capital employed was an estimated $385000 peremployee."3 Similar trends can be seen in the forestry and in thewood-processing industries. This rapid rise in capital intensivenessreflects the incorporation of expensive pollution controls, large-scaleproduction units, rising capital costs, and the rapid development ofnew and expensive technology.During the 1970s, capital investments grew more in centralCanada than in British Columbia. In 1971, British Columbia, Ontario,84
Table 5.1: Capital Expenditures in the Canadian Economy, ManufacturingSector, and the Forest Sector, 1971-84Capital Expenditures ($M)Forest Sectoras Percentage ofCanadian Manufacturing Forest Canadian ManufacturingTotals Sector Sector Total Sector1971 25621 4378 1145 4.5 26.21976 53088 7890 1939 3.7 24.21981 100456 17383 4442 4.4 25.61984 100801 14689 3424 3.4 23.3Source: Statistics Canada, Private and Public Investment in Canada (Ottawa:Minister of Supply and Services, 1971,1976, 1981, and 1984), cat. no. 61-206.Note: The forest sector includes the forestry, wood processing, and paperand allied industries.Table 5.2: Capital Expenditures for Machinery and Equipment, notIncluding Construction Costs, in the Canadian Economy and the ForestSector, 1971-84Total CanadianExpenditures ($M)Forest Sector as Percentage ofCanadian Total:Capital Capital Capital Capitaland Repair Only and Repair Only1971 9974 6674 8.7 7.71976 21317 15011 7.2 5.51981 43501 30712 8.4 7.51984 44688 29594 6.5 4.7Source: Statistics Canada, Private and Public Investment in Canada (Ottawa:Minister of Supply and Services, 1971,1976,1981, and 1984), cat. no. 61-206.Table 5.3: Capital Expenditures within the Forestry Sector, 1971-841971 1976 1981 1984Total expenditures ($M) 1145 1940 4442 3424Forestry (%) 14.8 18.6 14.3 15.6Wood-processing (%) 20.2 20.0 16.7 20.5Paper/allied (%) 65.0 61.3 69.0 63.9Capital expenditures onmachinery andequipment« ($M) 515 823 2313 1384Forestry (%) 8.0 11.1 7.4 7.2Wood-processing (%) 21.9 20.3 15.1 20.5Paper/allied (%) 70.1 68.6 77.6 72.3Source: Statistics Canada, Private and Public Investment in Canada (Ottawa:Minister of Supply and Services, 1971,1976, 1981, and 1984), cat. no. 61-206.a This category excludes all construction and repair expenditures onmachinery and equipment.85
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Science Council of Canada100 Metcal
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ContentsForewordAcknowledgments1113
Page 7 and 8:
In-House R&D by Equipment Suppliers
Page 9 and 10:
Table 2.5: R&D Employment in 10 Can
Page 11 and 12:
ForewordTechnological innovation an
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adapted sufficiently rapidly to the
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Finally, the author interviewed sen
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Table 1.3: Degree of Foreign Contro
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Figure 1.1: Innovation Patterns and
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Since 1945 the pace of technologica
Page 24 and 25:
Toward Reliance on Research rather
Page 26 and 27:
science occurred between 1900 and 1
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Forestry Sector R&D SystemIn Canada
Page 30 and 31:
up its forestry research group at N
Page 32 and 33: and one other that was strongly ori
Page 34 and 35: closely involved in the establishme
Page 36 and 37: to vet and control research priorit
Page 38 and 39: In-House R&D by Equipment Suppliers
Page 40 and 41: product. One, by no means atypical,
Page 42 and 43: only internal source of dissolving
Page 44 and 45: of which only 18 per cent came from
Page 46 and 47: New information can be generated by
Page 48 and 49: Chapter 3The R&D System andHow It W
Page 50 and 51: Table 3.2: Summary Characteristics
Page 52 and 53: Sixteen firms provided details on s
Page 54 and 55: The Opco Process: A Case Study of I
Page 56 and 57: however, within the last two decade
Page 58 and 59: in 1959, and a full-scale experimen
Page 60 and 61: Papritection was developed as follo
Page 62 and 63: Further tests were conducted in 198
Page 64 and 65: fully automatic machines, and its s
Page 66 and 67: Chapter 4Technological Capability a
Page 68 and 69: Table 4.2 provides measurements of
Page 70 and 71: forest-product equipment patents, w
Page 72 and 73: Foreign-Ownership and In-House R&DT
Page 74 and 75: Technological Liaisons: Forest-Prod
Page 76 and 77: for this deficiency the federal gov
Page 78 and 79: On the other hand, three of the lea
Page 80 and 81: one of Sweden's forest-products gia
Page 84 and 85: and Quebec accounted for 33.9 per c
Page 86 and 87: Table 5.5: Canadian Forest-Product
Page 88 and 89: Scandinavian manufacturers are in t
Page 90 and 91: was implemented smoothly and manage
Page 92 and 93: the foundations were poured, until
Page 94 and 95: inherent capabilities were never fu
Page 96 and 97: especially in the east, has receive
Page 98 and 99: "export staples mentality." The bel
Page 100 and 101: size of the conglomerates would cer
Page 102 and 103: the concept of flexibility explicit
Page 104 and 105: This author therefore recommends th
Page 106 and 107: with respect to technology transfer
Page 108 and 109: of the R&D system and influence the
Page 110 and 111: operations, attitudes toward innova
Page 112 and 113: limited R&D base, but they do empha
Page 114 and 115: The small size and non-innovative n
Page 116 and 117: Promoting In-House R&D in the Fores
Page 118 and 119: Notes1. The Technological Challenge
Page 120 and 121: 7. For example, nj. Daly, "Weak Lin
Page 122 and 123: 7. P.G. Mellgren and E. Heidersdorf
Page 124 and 125: this R&D facility has become even s
Page 126 and 127: 3. K. Noble, "Forest Industry Urged
Page 128 and 129: Publications of the ScienceCouncil
Page 130 and 131: Reports on Matters Referred by the
Page 132 and 133:
No. 40. Government Regulation of th
Page 134 and 135:
1981An Engineer's View of Science E
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