A study on the feasibility of conducting laminated veneer lumber production in the Whitefeather Forest in Northwestern Ontario within the lands of the People of Pikangikum

Abstract

Mass timber is an umbrella concept that refers to the large engineered wooden panels, columns, and beams that have been widely recognized as viable alternative to steel and concrete in the construction industry. In addition to the advantages of carbon sequestration, energy savings, fire resistance, and pre-assembly, mass timber offers Indigenous communities, especially those in rural areas like the Pikangikum First Nation in Northern Ontario, an opportunity to provide Indigenous youth training, to find a pathway for businesses in the community, to gain tax revenue, and to compete with the ordinary Canadian communities and their low-value commodity products such as pulp and softwood lumber. A BBC (Banker, Charnes, and Cooper) model in data envelopment analysis (DEA) is used to measure the technical efficiency of five small-scale Chinese mass timber manufacturers during 2012-2018, and a cost-benefit analysis (CBA) is used to analyze the feasibility of investing in a laminated veneer lumber (LVL) production line in the Pikangikum community. The technical efficiency results show that mass timber production technology is effective, mature, and can be imported. It is estimated to cost US$ 8.8 million and 33 people to set up the LVL production line with an annual output of 30,000 m3. The estimated net sales margin is 18.87%, payback in 5 years, and the 12-year internal rate of return (IRR) is 23%. In conclusion, conducting laminated veneer lumber production in the Whitefeather Forest in Northwestern Ontario within the lands of the People of Pikangikum is expected to be feasible and profitable.