Just 17 Per Cent of BC’s Secondary Processors Are ‘Fully Efficient’

Why It Matters

The low efficiency undermines a long‑standing policy goal of diversifying BC’s forest economy, while representing sizable cost savings and competitive disadvantages in a market pressured by U.S. import duties.

Key Takeaways

• Only 17% of BC secondary wood firms are fully efficient.
• Firms could cut wood and labor use by 14‑49% without output loss.
• Furniture firms most efficient; millwork and cabinets among least.
• Sector contributes ~$3.3 B USD sales and ~17 k jobs in BC.
• Productivity gap with sawmills widening since the 2007‑09 crisis.

Pulse Analysis

The Natural Resources Canada Pacific Forestry Centre used Data Envelopment Analysis on 143 BC secondary wood processors, treating wood purchases and labour as inputs and sales as the sole output. The aggregate efficiency score sits at just 0.17, while technical‑efficiency scores suggest a 14‑49 percent input slack across the sector. By pairing firm‑level data with a Malmquist productivity index through 2024, the researchers showed sawmills and panel makers pulling ahead, widening the gap that began after the 2007‑09 financial crisis.

For policymakers, the findings challenge the assumption that value‑added wood manufacturing automatically boosts provincial resilience. With an estimated $3.3 billion USD in sales and nearly 17 000 full‑time equivalents, the sector could unlock significant cost savings and improve margins by tightening input use. Reducing wood consumption also aligns with sustainability targets, especially as U.S. import duties and declining timber supplies pressure traditional lumber markets. The inefficiency is not confined to a few laggards; it is systemic, varying by product type, with furniture firms near optimal performance and millwork, cabinets, and remanufactured products lagging far behind.

Closing the technical‑efficiency gap will likely require a blend of lean manufacturing practices, investment in advanced machining and digital design tools, and targeted workforce training. Government incentives that reward input‑reduction innovations could accelerate adoption, while industry associations might facilitate best‑practice sharing across sub‑segments. If firms can achieve even modest input cuts, the sector stands to improve its competitiveness, sustain jobs, and contribute more robustly to BC’s diversified forest economy in the face of external trade pressures.