Economic Diversification

A recent Community Sawmill Opportunities Study, completed by Forintek Canada Corp., examined the required conditions, as well as possibilities, for future growth and sustainability of the NWT forest industry.

This study was funded by INAC under the Strategic Investments in Northern Economic Development program (SINED), and by the Government of the Northwest Territories (GNWT) Industry, Tourism and Investment (ITI), and Environment and Natural Resources (ENR) departments.

The contractor visited or spoke to key representatives operating sawmills and/or wood processing plants in the NWT: Jean Marie River, Fort Resolution, Fort Good Hope, Fort Smith and Hay River. This comprehensive study analysed specific opportunities such as the implementation of best practices and value-added/secondary wood product manufacturing (log home building and wood pellet manufacturing). It also addressed other concerns including: costs, use of labour and equipment, skill development, and productivity measures.

While acknowledging the challenges of operating a sawmill or related wood processing activity in the NWT, the study provided a number of recommendations for each location which will help it become an economically viable enterprise. The suggestions cover a range of options with a variety of investment costs; implementing tracking mechanisms such as a spreadsheet to track key costs and operating ratios; building shelters for equipment and workers to extend the operating season past the summer months; purchasing additional, possibly second-hand, equipment (kilns and planers) in order to offer more products—dried/planed lumber, tongue and groove flooring, furniture, wood pellets, log homes—to meet local/ regional/territorial market demand.

“We now have a more realistic picture of what can be done to support the growth of the NWT forest industry,” says Kevin Todd, Natural Resources Economist, Industry, Tourism and Investment, GNWT. “By implementing some cost effective changes or buying additional equipment, operators will be in a better position to develop successful businesses that make a difference to their community.”

Commissioning a study by industry experts who met with the affected communities resulted in a thorough report that identified practical and cost effective solutions for each of the communities interested in enhancing their sawmill and wood processing operations. By considering the needs of local, regional and territorial markets, determining areas requiring improvement and expanding the products produced by the mill, operators can implement changes that support their goals of providing long-term employment for community members and running a diversified, profitable business.

View the study online.