International Comparison of Forest S&T Funding and Management

in Canada, the United States, Sweden and Brazil

Prepared for the Canadian Forest Service

by

Stargate Consultants Limited

July 1999


EXECUTIVE SUMMARY

Previous studies in the past decade on investment in science and technology (S&T) in the Canadian forest sector have stated implicitly or explicitly that the level of investment is low in relationship to the importance of the forest sector to the Canadian economy. This study attempts to compare the level of forest sector S&T funding in Canada with that of the United States, Sweden and Brazil, which are some of its major competitors. It also outlines the forest management S&T structure in the four countries and identifies issues and areas of concern.

Canada uses the term S&T to incorporate research and development (R&D) and related scientific activities that encourage innovation and technology transfer. As the other countries incorporate some "related scientific activities" under R&D, R&D has been used as a synonym of S&T in this study.

Collection of data on funding levels for S&T activities in the four countries proved to be difficult as none of the countries has a central agency that collects statistics on forest sector S&T. The sources of statistics therefore include previous reports and publications, government department and agency budget information, annual reports of research organizations, figures provided by interviewees on their own organizations and their best estimates on other organizations, and extrapolations from limited company data to the industry as a whole. The data therefore give only a very general comparative picture of forest sector S&T funding.

Traditionally, the governments in Canada, Sweden and the US have been regarded as custodians of their nations' forests, regardless of ownership of the forested land. The government of Brazil has acquired the role of custodian of the country's Amazonian rain forest. All four countries have also committed to sustainable management of their forests. In Canada, the US and Brazil, over 85% of public investment in total forest sector S&T is in forestry. In Sweden, just over 50% of public investment is in forestry.

In Brazil, about one third of public investment in forestry goes to an institute that conducts research on exotic species used in the plantations. The remainder is on native species. Funding for rainforest research in Brazil also comes from international sources, including one program sponsored by the Group of Seven Countries. The total program funding is US$324 million over five years, to which the Brazilian government contributes about 12%.

One of the major differences between Canada and the US and Sweden is the investment in forest sector S&T by the private sector. The investment by the Canadian private sector was less than 6% of that of the US and about 40% of that of Sweden. Since 1997, MacMillan Bloedel has closed its research centre in BC and Canadian private sector investment is even lower.

The available data show that in comparison with the US and Sweden, Canada underinvests in forest products S&T at all levels. In 1997, the latest year for which comparative figures are available, less than 50% of total private and public forest sector S&T investment in Canada was in forest products. In the US and Sweden, around 80% of the total S&T effort was in forest products. In Brazil, about 40% of total S&T investment was classed as forest products.

Public investment in forest products research is also lower in Canada - about 15% of that of the US and 20% that of Sweden. Since 1910, the US has had a Forest Products Laboratory that comes under the US Forest Service. Public funding for forest products research is also provided through a federal allocation to the Office of Industrial Technologies (OIT) of the US Department of Energy. Most of this is expended through the universities. Sweden does not have a system of state research laboratories but funds forest products research directly though grants to and funding agreements with forest sector research institutes and grants to universities, and indirectly through various ministries and funding agencies. Sweden also receives forest sector funding through the European Research fund to which the country contributes. In Brazil, at least one research institute receives public funding for forest products research, and considerable research effort at the universities is on plantation forestry and products. In Canada, public funding for forest products research is mainly through comparatively small grants or loans to research institutes and through the universities. Canadian public funding for forests products S&T does not reflect the importance of the industry to the Canadian economy.

In all four countries, about 80% of forest products S&T funding is directed to pulp and paper with the remainder to wood products.

The major issue in management of forest sector S&T is coordination of resources and efforts. None of the countries has a separate department dedicated to the forest sector as a whole. In the US, Sweden and Brazil, forestry is associated with departments of agriculture; in Canada it falls under the Department of Natural Resources. With the exception of the Forest Products Laboratory in the US, and grants to Feric and Forintek through the Canadian Forest Service, forest products S&T falls under departments concerned with industry. This results in problems of communications and in coordinating or focusing S&T efforts to assist the industry.

The US has taken steps to address this problem through Agenda 2020, a compact between government and the forest products industry that provides a vision for the forest products industry which embraces the concepts of sustainable forest management. It also provides an implementation plan that identifies and prioritizes research areas that need to be addressed to achieve the vision, and funding for the research through the OIT and the industry. Although Canada has a vision for its forests of the future, that vision does not specifically address its forest products industry of the future. A vision of a vibrant forest industry based on sustainably managed forests would help to provide a focus for Canadian S&T efforts and investments.

The declines in government funding for forest sector research in Canada, Sweden and the US have resulted in formation of various combinations of government/university/industry research consortia or networks that have resulted in greater industry input to research programs and address more directly the research needs of industry. Research institutes in Brazil were founded in association with universities to direct research efforts to the needs of the plantation forest industry. However, some authors have expressed concern that increased privatization of decision making in forestry research has resulted in a move towards shorter-term, faster pay-off research.

Forest products research conducted through research institutes and at the universities address more directly the needs of industry, although the ability of the industry to implement some of the results is a concern.

Some of the issues and concerns in the literature and expressed by participants in this study, relate to sustainability of the forests and the need for industry in the northern hemisphere to improve productivity in the face of growing competition from countries with short-rotation, high yield plantation crops, low labour costs and modern mills. More R&D effort will be required to ensure the Canadian forest products industry has a continual supply of high quality raw material, harvested by enviro-gentle methods and converted to high value added products in modern mills.

Forestry is now a knowledge based industry but this message has not reached the general public. The educational levels of forestry and mill workers, and of management is also a major concern. New harvesting equipment and methods, and new technologies for modern mills require personnel with different education and skills than in the past. Managers who understand the new technologies will be less risk averse, able to implement the technologies into their operations, and be better able to recognize opportunities for productivity gains through use of new equipment or methods.


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