Canadian Industrial Outlook: Paper Products—Spring 2017

Shrinking Workforce—Although production has increased steadily since 2013, the industry continues to shed workers. This is likely to continue as an increasing number of workers reach retirement age and ongoing automation within the industry lessens the need to replace them.

Electricity Prices—Rising electricity rates, particularly in Ontario and B.C., continue to drive up production costs for firms in these provinces. This has a disproportionate impact on mechanical pulp and newsprint mills, as they are more reliant on electricity as an input into production.

Price Gains Cushion Top-Line Weakness—Higher prices for converted paper products last year helped to offset some of the negative impact of lower production levels. The dip in production was due primarily to a decline in exports.