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The Vancouver Island Regional Supply Chain Study – Executive Summary
The Vancouver Island Regional Supply Chain Study
This project will engage forestry and wood industry stakeholders in a pilot to make avoidable wood waste more accessible to manufacturers while simplifying wood waste management for timber licensees. The project will explore and test options for wood waste management, consolidating waste by sorting according to species, dimension and condition to serve the distinct needs of buyers and sellers of wood fiber. This pilot will focus on building business to business relationships within forestry and wood industries in order to expose and pursue innovative approaches to wood waste management; help mitigate fire hazard by reducing fuel in the forest; and help further wood manufacturing by solving the number one barrier to wood industry investment–secure access to fiber. We will accomplish this by working with industry stakeholders to find mutually beneficial, cost-effective ways to organize waste fiber (such as organizing a central/universal sort area), look for collaborative and innovative approaches to transporting fiber, methods to help ensure forest fire fuel reduction, and to facilitate connection between those who have fiber to sell and those who need fiber for their manufacturing operations.
Prepared for the Vancouver Island Economic Alliance and Foreign Trade Zone Vancouver Island by
Bill Collins and John McCannel
February, 2019
With funding from the Invest Canada Community Initiatives program, Island Coastal Economic Trust, Cowichan Valley Regional District, City of Port Alberni, and Port Alberni Port Authority, VIEA gathered information to develop a portfolio of business cases for specific investment opportunities across the Island, with direct benefit to local government. Public and private stakeholders are invited to help identify local investment opportunities to be marketed internationally.
This work was a direct complement to existing regional and community economic development objectives by developing and marketing sector specific, site specific, tangible, vetted business cases designed to attract the attention of targeted foreign direct investors.
Following was the scope of this initiative:
Educate/Engage Stakeholders
Build understanding of FDI opportunities and assist public/private stakeholders to qualify and quantify their offerings for inclusion in business case development and site selection responsiveness. VIEA will work with transportation providers and goods producers to identify cost-effective value chain opportunities and help increase production with existing companies while foreign direct investment efforts are employed to increase appetite internationally.
Increase Production Volumes for Domestic Markets and Direct Export
VIEA’s analysis of direct export potential for several industry sectors seems to indicate that opportunities are largely contingent on ability to increase predictable production volumes. In many instances, producers are navigating complex, costly and time-consuming transportation sequences that can be improved with industry clustering and increased production volumes. VIEA will work with stakeholders to identify new markets, industry partners, and foreign investors to justify and facilitate production volumes sufficient to meet domestic demand and warrant direct export.
Optimize Usage of Industrial Lands
Coordinate efforts with public and private stakeholders to engage interest amongst prospective foreign investors regarding available commercial/industrial lands. vailable lands that meet specific location requirements will be linked with business cases developed by VIEA. The objective will be to increase investor demand and optimize usage of our considerable inventory of available land and encourage infrastructure improvement.
Attract Foreign Investment
Aligned with Canada’s Global Marketing Action Plan, VIEA will introduce specific investment opportunities with prospective foreign investors focused on sectors with high potential for domestic and export development. Examples exist in the advanced manufacturing sector of European companies using Vancouver Island as their center of excellence for engineering and manufacturing in North America because of the access to skilled labour. Examples, however, are too few because we have lacked the coordinated ability to seize these opportunities. VIEA has developed three business cases for new value added wood manufacturing which are now available to the investment community. VIEA will develop additional business cases in other sectors so as to have specific, detailed opportunities to present to prospective investors.
Diversify and Grow Within Key Sectors
Advanced manufacturing in aerospace, medical devices, biotech, transportation, and marine/environmental sciences, value added wood manufacturing, finfish and shellfish aquaculture, and technology-intense specialty agri-food production—these and other opportunities are ripe for foreign investor attention. FDI marketing will raise international awareness of these and other opportunities on Vancouver Island.
CollinsWorks Ventures of North Saanich was contracted to conduct research and develop this portfolio of business cases. VIEA hosted stakeholder meetings in communities across the Island. This project started in April 2018 and concluded in December 2018.
Prepared for the Vancouver Island Economic Alliance and Foreign Trade Zone Vancouver Island by
Bill Collins and John McCannel
February, 2019
With funding from the Invest Canada Community Initiatives program, Island Coastal Economic Trust, Cowichan Valley Regional District, City of Port Alberni, and Port Alberni Port Authority, VIEA gathered information to develop a portfolio of business cases for specific investment opportunities across the Island, with direct benefit to local government. Public and private stakeholders are invited to help identify local investment opportunities to be marketed internationally.
This work was a direct complement to existing regional and community economic development objectives by developing and marketing sector specific, site specific, tangible, vetted business cases designed to attract the attention of targeted foreign direct investors.
Following was the scope of this initiative:
Educate/Engage Stakeholders
Build understanding of FDI opportunities and assist public/private stakeholders to qualify and quantify their offerings for inclusion in business case development and site selection responsiveness. VIEA will work with transportation providers and goods producers to identify cost-effective value chain opportunities and help increase production with existing companies while foreign direct investment efforts are employed to increase appetite internationally.
Increase Production Volumes for Domestic Markets and Direct Export
VIEA’s analysis of direct export potential for several industry sectors seems to indicate that opportunities are largely contingent on ability to increase predictable production volumes. In many instances, producers are navigating complex, costly and time-consuming transportation sequences that can be improved with industry clustering and increased production volumes. VIEA will work with stakeholders to identify new markets, industry partners, and foreign investors to justify and facilitate production volumes sufficient to meet domestic demand and warrant direct export.
Optimize Usage of Industrial Lands
Coordinate efforts with public and private stakeholders to engage interest amongst prospective foreign investors regarding available commercial/industrial lands. vailable lands that meet specific location requirements will be linked with business cases developed by VIEA. The objective will be to increase investor demand and optimize usage of our considerable inventory of available land and encourage infrastructure improvement.
Attract Foreign Investment
Aligned with Canada’s Global Marketing Action Plan, VIEA will introduce specific investment opportunities with prospective foreign investors focused on sectors with high potential for domestic and export development. Examples exist in the advanced manufacturing sector of European companies using Vancouver Island as their center of excellence for engineering and manufacturing in North America because of the access to skilled labour. Examples, however, are too few because we have lacked the coordinated ability to seize these opportunities. VIEA has developed three business cases for new value added wood manufacturing which are now available to the investment community. VIEA will develop additional business cases in other sectors so as to have specific, detailed opportunities to present to prospective investors.
Diversify and Grow Within Key Sectors
Advanced manufacturing in aerospace, medical devices, biotech, transportation, and marine/environmental sciences, value added wood manufacturing, finfish and shellfish aquaculture, and technology-intense specialty agri-food production—these and other opportunities are ripe for foreign investor attention. FDI marketing will raise international awareness of these and other opportunities on Vancouver Island.
CollinsWorks Ventures of North Saanich was contracted to conduct research and develop this portfolio of business cases. VIEA hosted stakeholder meetings in communities across the Island. This project started in April 2018 and concluded in December 2018.
Prepared for the Vancouver Island Economic Alliance and Foreign Trade Zone Vancouver Island by
Bill Collins and John McCannel
February, 2019
With funding from the Invest Canada Community Initiatives program, Island Coastal Economic Trust, Cowichan Valley Regional District, City of Port Alberni, and Port Alberni Port Authority, VIEA gathered information to develop a portfolio of business cases for specific investment opportunities across the Island, with direct benefit to local government. Public and private stakeholders are invited to help identify local investment opportunities to be marketed internationally.
This work was a direct complement to existing regional and community economic development objectives by developing and marketing sector specific, site specific, tangible, vetted business cases designed to attract the attention of targeted foreign direct investors.
Following was the scope of this initiative:
Educate/Engage Stakeholders
Build understanding of FDI opportunities and assist public/private stakeholders to qualify and quantify their offerings for inclusion in business case development and site selection responsiveness. VIEA will work with transportation providers and goods producers to identify cost-effective value chain opportunities and help increase production with existing companies while foreign direct investment efforts are employed to increase appetite internationally.
Increase Production Volumes for Domestic Markets and Direct Export
VIEA’s analysis of direct export potential for several industry sectors seems to indicate that opportunities are largely contingent on ability to increase predictable production volumes. In many instances, producers are navigating complex, costly and time-consuming transportation sequences that can be improved with industry clustering and increased production volumes. VIEA will work with stakeholders to identify new markets, industry partners, and foreign investors to justify and facilitate production volumes sufficient to meet domestic demand and warrant direct export.
Optimize Usage of Industrial Lands
Coordinate efforts with public and private stakeholders to engage interest amongst prospective foreign investors regarding available commercial/industrial lands. vailable lands that meet specific location requirements will be linked with business cases developed by VIEA. The objective will be to increase investor demand and optimize usage of our considerable inventory of available land and encourage infrastructure improvement.
Attract Foreign Investment
Aligned with Canada’s Global Marketing Action Plan, VIEA will introduce specific investment opportunities with prospective foreign investors focused on sectors with high potential for domestic and export development. Examples exist in the advanced manufacturing sector of European companies using Vancouver Island as their center of excellence for engineering and manufacturing in North America because of the access to skilled labour. Examples, however, are too few because we have lacked the coordinated ability to seize these opportunities. VIEA has developed three business cases for new value added wood manufacturing which are now available to the investment community. VIEA will develop additional business cases in other sectors so as to have specific, detailed opportunities to present to prospective investors.
Diversify and Grow Within Key Sectors
Advanced manufacturing in aerospace, medical devices, biotech, transportation, and marine/environmental sciences, value added wood manufacturing, finfish and shellfish aquaculture, and technology-intense specialty agri-food production—these and other opportunities are ripe for foreign investor attention. FDI marketing will raise international awareness of these and other opportunities on Vancouver Island.
CollinsWorks Ventures of North Saanich was contracted to conduct research and develop this portfolio of business cases. VIEA hosted stakeholder meetings in communities across the Island. This project started in April 2018 and concluded in December 2018.
Prepared for the Vancouver Island Economic Alliance and Foreign Trade Zone Vancouver Island by
Bill Collins and John McCannel
February, 2019
With funding from the Invest Canada Community Initiatives program, Island Coastal Economic Trust, Cowichan Valley Regional District, City of Port Alberni, and Port Alberni Port Authority, VIEA gathered information to develop a portfolio of business cases for specific investment opportunities across the Island, with direct benefit to local government. Public and private stakeholders are invited to help identify local investment opportunities to be marketed internationally.
This work was a direct complement to existing regional and community economic development objectives by developing and marketing sector specific, site specific, tangible, vetted business cases designed to attract the attention of targeted foreign direct investors.
Following was the scope of this initiative:
Educate/Engage Stakeholders
Build understanding of FDI opportunities and assist public/private stakeholders to qualify and quantify their offerings for inclusion in business case development and site selection responsiveness. VIEA will work with transportation providers and goods producers to identify cost-effective value chain opportunities and help increase production with existing companies while foreign direct investment efforts are employed to increase appetite internationally.
Increase Production Volumes for Domestic Markets and Direct Export
VIEA’s analysis of direct export potential for several industry sectors seems to indicate that opportunities are largely contingent on ability to increase predictable production volumes. In many instances, producers are navigating complex, costly and time-consuming transportation sequences that can be improved with industry clustering and increased production volumes. VIEA will work with stakeholders to identify new markets, industry partners, and foreign investors to justify and facilitate production volumes sufficient to meet domestic demand and warrant direct export.
Optimize Usage of Industrial Lands
Coordinate efforts with public and private stakeholders to engage interest amongst prospective foreign investors regarding available commercial/industrial lands. vailable lands that meet specific location requirements will be linked with business cases developed by VIEA. The objective will be to increase investor demand and optimize usage of our considerable inventory of available land and encourage infrastructure improvement.
Attract Foreign Investment
Aligned with Canada’s Global Marketing Action Plan, VIEA will introduce specific investment opportunities with prospective foreign investors focused on sectors with high potential for domestic and export development. Examples exist in the advanced manufacturing sector of European companies using Vancouver Island as their center of excellence for engineering and manufacturing in North America because of the access to skilled labour. Examples, however, are too few because we have lacked the coordinated ability to seize these opportunities. VIEA has developed three business cases for new value added wood manufacturing which are now available to the investment community. VIEA will develop additional business cases in other sectors so as to have specific, detailed opportunities to present to prospective investors.
Diversify and Grow Within Key Sectors
Advanced manufacturing in aerospace, medical devices, biotech, transportation, and marine/environmental sciences, value added wood manufacturing, finfish and shellfish aquaculture, and technology-intense specialty agri-food production—these and other opportunities are ripe for foreign investor attention. FDI marketing will raise international awareness of these and other opportunities on Vancouver Island.
CollinsWorks Ventures of North Saanich was contracted to conduct research and develop this portfolio of business cases. VIEA hosted stakeholder meetings in communities across the Island. This project started in April 2018 and concluded in December 2018.
To help assess the current contribution of the value-added wood manufacturing industry on Vancouver Island, the Vancouver Island Economic Alliance (VIEA) engaged MNP LLP (MNP) to carry out an economic impact study of the industry.
In March/April 2016, VIEA partnered with BC Wood and the Canadian Wood Council to conduct a series of dialogues in 7 communities on Vancouver Island (From Victoria to Port Hardy), engaging more than 100 people in the process who are directly involved with secondary manufacturing, or representing local government, First Nations, provincial and federal agencies. The purpose of this series was to identify concrete actions and ideas that could move the sector forward in tangible ways and in the short term.
Based on our preliminary research and community engagement sessions in 2016, the following trends and information emerged at the forefront:
1) There are currently more than 100 small and medium-sized wood value-added manufacturing businesses on the Island (BC Wood and Canadian Forest Service figures), most typically with less than 20 employees per business. Cluster concentrations exist in the Capital, Cowichan and Nanaimo Regions with strong interest in and potential for growth in the Comox, Strathcona, Mount Waddington and Alberni Regions.
2) Other than some of those businesses being members of BC Wood, they have not coalesced as a collective group to develop specific sector growth strategies.
3) Many of these businesses are focusing their efforts on BC markets, but many have also built client niches across the US and overseas and have developed excellent reputations. Given that the domestic market for Island wood products is under-developed and that the US market for value-added wood products is not subject to softwood negotiations and is 600% larger than the US market for dimensional lumber, significant under-developed market opportunity exists in North America alone.
4) In all meetings except on the North Island, there was often little awareness by stakeholders of which businesses exist in their own locales, or the economic significance, impact, or future potential of their activities. It was identified in almost all communities that showcasing local wood from local businesses would be likely the best way to create awareness, support the sector, and develop the wood culture across Vancouver Island.
5) Hemlock and Balsam represent 60% of the wood fibre grown on Vancouver Island. These species have long been regarded as barriers to industry diversification in our region because they do not fit the standard requirements of the primary forest industries. Finding a solution to this conundrum has been one of the objectives of VIEA’s work over the last two years. In the recent dialogue process and in consultation with BC Wood and Canadian Wood Council, three products that are not manufactured on Vancouver Island and for which there is growing demand have emerged as ideal uses for Hemlock and Balsam—‘Glulam’, Wood Fibre Insulation, and Pressure Treated Wood for exterior applications.
6) There are “scaled” opportunities of larger anchoring product plants that could benefit everyone on the Island and help maximize under-utilized fibre, especially Hemlock and Balsam. Detailing those opportunities for the sector and communities will help create awareness and understanding of the larger potential. This includes the possibility of locating a Glulam plant on Vancouver Island (Only one company in Canada.); a Wood Fibre Insulation plant (Currently none in North America.), Pressure Treated Wood production plant to replace products presently being imported to Vancouver Island, and supporting more deliberate wood-based business clusters.
Findings from this series formed the basis for a project initiated in October 2016 with goals to:
1) Assemble an inventory of Island-based wood manufacturers and identify how to help them increase the distribution of their products;
2) Complete an economic multiplier analysis showing the role of value-added manufacturing in local community economies on Vancouver Island;
3) Develop business cases for three manufacturing plants to produce products presently not made on Vancouver Island that could optimize use of under-utilized coastal species.
The Vancouver Island Economic Alliance has had diversification of the Forest/Wood Industries as a priority for several years based on the opinion that our unique and enviable natural resource (wood fibre) has been under-utilized and that significant potential for family-sustaining employment and regional wealth generation has been unrealized. Our persistent engagement with industry, community and First Nations stakeholders has finally revealed the three distinct opportunities for action towards unravelling this ‘Gordian Knot’ to provide tangible and actionable outcomes to strengthen this industry and our Island economy. The timing is critical. With fibre supply rapidly diminishing in the BC interior as the historic beetle-kill harvest of the last decade begins winding down, the pressure will increase for primary industry volumes to come from the Coastal Region. With Island First Nations gaining more and more control of timber licenses as part of settlements with the government, a window of opportunity exists to help ensure potential for jobs and wealth generation far beyond logging if new industries can be developed. We think that the future of Island forestry and wood manufacturing can be bright AND action must be taken now.
1) Inventory – Conduct industry research to locate and identify value-added wood manufacturers on Vancouver Island and communicate with them regarding their growth potential, limiting barriers, and target market specifics. Assess their desire and capacity to expand as well as their readiness to participate in an Island industry marketing initiative including opt-in web presence and possible Wood Show. In all of this, identify complementary business opportunities for economies of scale and clustering opportunities to further solidify economic viability. (Inventory and Survey research began in January 2017 with results expected by June 2017.)
2) Impact – With inventory complete, analyze available data to calculate the economic impact of value-added wood manufacturing at the community and regional levels. As well, this data will show the relative stability and/or vulnerability of the industry in the context of existing and potential markets along with fibre supply, labour market, etc. Further analysis, using existing data from partnering organizations such as BC Wood and Canadian Wood Council, may also demonstrate the economic and climate change implications of local procurement of Island-made wood products. The services of an economist using established modelling is being employed to complete this economic analysis. (Analysis began in April 2017 with results expected by September 2017.)
3) Report – Conduct Island-wide industry and market research for all three investment opportunities focused on confirming site criteria and availability, scalable capital investment requirements, domestic and international market depth and breadth, fibre sources and supply, domestic and international transportation needs compared with existing capacity, detailed labour requirements, partnership potential and investor appetite. This report will define opportunities for the development of these new industries. (Business case development began in March 2017 with results expected by September 2017.) All three of these project objectives, intertwined yet distinct, will support economic development readiness and investment attraction by providing detailed information to communities, regions, and industry to enable them to make decisions in support of retaining, growing and diversifying existing businesses as well as developing business cases designed to attract investment to new industries whose requirements are detailed in the final report.
The following organizations have made financial contributions to enable this project work:
This report took the recommendations that arose from the stakeholder roundtable discussions held in 2016 by the Vancouver Island Economic Alliance (VIEA) and the BC and Canadian Wood Councils in seven communities across Vancouver Island. Three priority value-added secondary wood manufacturing industries were identified through these roundtables as follows:
- Pressure Treated Lumber
- Glulam / CLT
- Wood Fibre Insulation
To determine the viability of these opportunities on Vancouver Island (VI) the team completed a literature search on published information on these products and their respective markets, undertook telephone and face-to-face interviews with individuals from companies either directly involved or in the supply chain.
Vancouver Island Economic Summit (VIEA) published the first annual State of the Island Economic Report in 2015 releasing it at the 2015 State of the Island Economic Summit where it was presented by MNP’s Senior Economist, Susan Mowbray. The report provides valuable insights about the trends, challenges and opportunities facing the Vancouver Island economy – in a concise, easy-to-read format. The user-friendly, info-graphic style of this report will provide easy reference to a range of relevant information and sources for anyone wishing to delve into greater detail. VIEA is grateful for the sponsorship of MNP and additional sponsorship from the Nanaimo Airport, Coastal Community Credit Union, BC Ferries, BC Hydro, and the BC Ministry of Jobs, Tourism and Skills Training.
