FROM bclocalnews.com: Combining traditional practices with new ways of using wood products will turn Canada’s forestry industry into an economic powerhouse, says the national group representing forestry companies.

The Forest Products Association of Canada recently published a report pointing the way it believes Canada’s forestry industry should go. And it has some good news – although logging and sawmilling businesses have been hit hard by the recession, their market will come back.

“The lumber sector is the cornerstone to the competitiveness of the traditional and emerging forest products industry,” says a summary of the report. “The lumber industry will continue to be cyclical; however, over the business cycle they will be profitable.”

Catherine Cobden, the association’s vice-president of economics and regulatory affairs, worked on the report and said its most important recommendation is that established, traditional companies – such as pulp mills – need to integrate with new companies interested in generating electricity from wood waste and other bio-energy and bio-fuels projects.

“As you integrate you also maintain the jobs and protect the jobs you already have in the industry,” she said.

Integrating new ways of using wood products will also have economic benefits, she added.

“Diversification adds to their bottom line,” she said.

The report points out that while the U.S. has invested in biomass energy – electricity generated from burning wood waste – over the past four years, Canada’s investment has been relatively small. China has made large investments, and the largest investor has been Europe. There’s a growing market and demand for biomass energy, and for new wood-based products from cosmetics to pharmaceuticals to new technologies, and Canada needs to get on top of the market.

“Given the abundance of Canada’s forest resource, the number of new technologies on the cusp of commercialization and Canada’s global leadership in sustainable forestry, Canada has the potential to become a bio-energy and bio-product powerhouse,” says the report. “While the bio-energy and bio-chemical markets are still in their infancy, the study concluded that a number of technologies hold considerable promise and are worth serious exploration. With the right investments in the right areas, the forest products industry can return to profitability and contribute to climate change solutions.” There’s also hope for pulp and paper mills, says the report, suggesting they could adapt their mills to act as “bio-refineries” creating fuels and fuel additives from wood products. Cobden said the federal government needs to act quickly to open doors for companies to invest in new technologies, and integrate them into the existing forestry industry. Because if Canada doesn’t do it, someone else will.

“We’re pretty sure this will happen anyway because the economics will stand,” she said.