Technology and the Canadian Forest-Product Industries ... - ArtSites

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and Quebec accounted for 33.9 per cent, 16.6 per cent, and 12.2 percent respectively of expenditures. In 1981, the relevant proportionswere 38.6 per cent, 24.7 per cent, and 21.7 per cent. With the exceptionof the boom spending year of 1981, British Columbia's share of paperand allied expenditures has declined significantly (Table 5.4). Theearlier technology gap between east and west has been reduced.From 1981-86 investments have been overwhelmingly concentratedin central and eastern Canada and technological obsolescence is nowa major issue in British Columbia.The effects of the recession of the early 1980s were more stronglyfelt in British Columbia than elsewhere, although the entire industryexperienced serious problems in 1981-82. Large capital investments in1979-81 had generated new capacity just as the worst recession sincethe 1930s began. These investments significantly increased the debtlevels of the forest-product firms. The average debt-equity ratios forwestern forest-product firms escalated from 0.44 in 1979 to 1.07in 1983;Table 5.4: Regional Distribution of Capital Expendituresin the Forestry Sector, 1971-84Percentage of Total ExpenditureBritish ColumbiaForestry Wood Paper/Allied1971 64.7 32.01976 59.7 48.6 21.71981 50.0 59.8 31.11984 56.9 58.0 20.2Percentage of Total ExpenditureOntarioForestry Wood Paper/Allied1971 10.7 18.21976 14.6 14.6 33.11981 19.5 14.7 28.21984 23.6 13.7 29.0Percentage of Total ExpenditureQuebecForestry Wood Paper/Allied1971 10.6 15.41976 15.4 17.3 28.81981 17.7 12.4 24.31984 12.3 18.6 34.2Source: Statistics Canada, Private and Public Investment in Canada (Ottawa:Minister of Supply and Services, 1971, 1976, 1981,and 1984), cat. no. 61-206.86
the corresponding increase for eastern producers was from 0.61 to0.76. 4 With declining demand and profits and increased interest payments,corporate income dropped drastically. The 11 largest publiclyowned producers, for example, enjoyed net incomes of $720.3 millionin 1980 and $411.2 million in 1981 but lost $125.1 million in 1982. 5Clearly, the western-based companies have been hardest hit andhave experienced higher debt-equity ratios, lower profits, and lowernet income. In 1984 and 1985 western firms continued to suffer themost. Greater reliance on solid wood products (as opposed to pulp)and on open market transactions, and emphasis on less processedcommodities and higher debt-equity ratios are important factorsaccounting for the severity of their problems. Eastern firms, in partbecause of their greater share of older plants, had received substantiallymore government assistance during the 1970s and virtually all ofthe $613 million spent in the pulp and paper modernization programthat began in 1979. 6Although the western industry remains stagnant, with a low levelof investment, the eastern industry has been more aggressive in pursuinginvestment, at least in part because of the availability ofsubstantial government subsidies. In principle, however, not manyforest-product firms profess support for these subsidies. The mainconcerns are that they have been awarded for political rather thaneconomic reasons and they have been larger than necessary?Moreover, there are questions about whether the subsidies, whichwere awarded to a large number of firms, enhanced the efficiency ofthe pulp and paper industry.The Role of Imported Machinery and EquipmentTechnology imported in the form of equipment has always beenimportant to the Canadian forest-product industries. During the 1970sand 1980s the value of such imports excluding construction equipmenthas typically been substantially higher than the value of exports(Table 5.5). The forest-product industries have long lobbied for dutyfreeimports of machinery on the basis that access to the lowest pricedand latest technology is essential to their competitiveness. Certainly,imports increased their share of the domestic market from 30 per centin 1965 to over 50 per cent during the 1970s and 1980s (Table 5.5).Admittedly, the export-domestic production ratios of the Canadianforest-product equipment industry has similarly increased (Table 5.5).Nevertheless, Canada has a substantial balance of payments deficit inforest-product equipment trade.87
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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
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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
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science occurred between 1900 and 1
Page 28 and 29:
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 82 and 83: Capital Investments in the Canadian
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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