Investing in Québec’s forest products industry

Choosing Québec to invest in the forest products industry means taking part and encouraging the sustainable management of forest resources. It is also choosing a resourceful and competitive business environment, a dedicated innovation ecosystem, infrastructure that are renewed and access to the most important free trade areas.

Québec is recognized worldwide for the sustainable management of its forest resources and the quality of the resulting products.

Sustainable forest management aims to preserve or improve the long-term health of forest ecosystems for the benefit of all while ensuring good environmental, economic, social and cultural prospects for future and current generations. It is at the heart of all government policies, regulations and actions in this matter.

To learn about the vision that guides this practice, see the Sustainable Forest Management Strategy (PDF 2.34 Mb).

The forest sector is one of the economic pillars of Québec and its regions. It includes forestry, logging, and wood products manufacturing.

The forest sector alone represents more than 10% of total jobs in 150 municipalities and generates economic benefits in more than 900 municipalities (about 83% of municipalities).

Some forest sector numbers in 2023

The 2023 data confirm the central place of the forest sector in Québec's economy:

• GDP of $6.4B (or 1.5% of Québec’s total economic activity);
• 2,000 establishments employing approximately 57,000 workers;
• Approximately $22.1B in manufacturing shipments (domestic and international).

The forest products industry is at the heart of Québec’s trade. As a hub for this type of trade in eastern Canada and the second-largest province in Canada, Québec offers exporters access to three important free trade zones:

• the Canada-United States-Mexico Agreement (CUSMA);
• the Canada-European Union Comprehensive Economic and Trade Agreement (CETA)
• the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – a free trade agreement between Canada and ten other Asia-Pacific countries.

Québec also provides a privileged route for various overseas markets through its vast land and marine transportation network, which gives access, within a radius of 1,500 kilometres, to some 20 major North American cities and to more than 100 million inhabitants.

Evocative numbers

In 2023, the value of its international shipments was $11.3B, or 9.6% of the province’s total exports. This performance was accompanied by a trade balance of approximately $8.8B, which contributed significantly to maintaining Québec’s overall trade balance positive.

Québec’s forest products industry has a long tradition of research and innovation which can rely on a dedicated ecosystem of research and innovations. Industry partners are aware of the importance such investments, which enable them to ensure their competitiveness and thus contribute to the economic development of Québec and its regions.

In 2022, $5.1B was invested in fixed capital to improve existing infrastructure, stimulate creativity, integrate innovative equipment and increase research and development efforts.

Québec offers a competitive environment favourable to companies wishing to invest in the development of innovative wood products and value creation from forest resources. This is in fact consistent with the Development Strategy for Québec’s Forest Products Industry 2018-2023 (in French).

From an innovation perspective, particular attention is given to partnerships with other industrial sectors. The forest products industry in Québec has every interest in innovating in collaboration with external sectors, with the objective of accelerating the research, development and commercialization of innovative products. It can join forces with non-traditional partners, such as industries related to chemistry, metallurgy, plastics or life sciences to further enhance access to new markets and the value of innovative products.

Proponents and businesses that choose to invest in Québec can count on the government’s support to make their projects in the forest sector a reality. 

In addition to a favourable tax system, the government has the ability to act as a financial partner (particularly through Investissement Québec). It implements a series of measures that aim, among other things, to:

• support research and innovation;
• continue the digital transformation for businesses;
• encourage investment in new technologies, entrepreneurship and exports.

Measures to support investment in the forest products industry

The government also provides a series of general or specific financial assistance to companies in Québec’s forest products industry or those creating value added from said industry (in French only).

The following are some general or specific support measures for investment in the forest products industry:

• Tax holiday for major investment projects: 
  Health Services Fund income tax or employer contribution holiday.
• Crédit d’impôt à l’investissement et à l’innovation (C3i) (in French only):
  Provides opportunities for eligible manufacturing or electronic equipment depending on jurisdiction.
• Electricity rebate program: 
  Electricity rebate of up to 20% for four to eight years depending on the project for companies billed at “L” rate.
• Natural Resource and Energy Capital Fund - Investissement Québec (in French only):
  Allows the government to take equity interests in natural resource industries, including in the forest sector.
• ESSOR program - Investissement Québec (in French only):
  Support for investment projects that promote businesses’ productivity, reduction of the environmental footprint and internationalization.
• Offensive de transformation numérique (ministère de l’Économie, de l’Innovation et de l’Énergie) (in French only):
  Support accelerating the digital shift for businesses in all sectors and regions of Québec.