Introduction

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Traditionally, the resource sectors (agriculture, fishing, forestry, mining and energy) have employed a relatively large share of the rural workforce. In the late 1800s and early 1900s, these sectors were the driving force behind the expansion of rural settlements in Atlantic coastal communities, on the Prairies and in the northern areas of British Columbia, Ontario and Quebec.

In recent decades the resource sector has seen many changes as employment has shifted from primary commodity production to manufacturing and then to the service sectors. For instance, employment has shifted from farming and log harvesting to food processing and wood processing. Similar to the patterns in other sectors, employment in resource sectors has become more knowledge intensive. Thus, there is the need for technical training which is not always available in rural areas. Related to this is the increased importance of various ancillary services (such as research, input services and marketing). In addition, some economic activities traditionally associated with the production process in resource sectors have been relocated. Some of this relocation has been from rural to urban areas in Canada and some relocation has occurred on a global scale.

This bulletin reviews employment in resource sector manufacturing (or resource sector processing). To place this activity in context, we use the concept of a value chain. This concept focuses on the structure, nature and governance of economic activities associated with the transformation of a raw commodity (in our case) into a consumer item. Part of the analysis of a value chain includes a review of the geographic location (and the change over time) of each stage of the value chain. This contributes to the analysis of economic development options for a rural community as well as providing a better understanding of the role of the rural economy in the national economy.

One major finding of this bulletin is that employment in the manufacturing or processing of raw products from the resource sector is declining generally everywhere in Canada, but more slowly than "other" manufacturing employment – and it is declining more slowly in rural and small town areas which are relatively more dependent on resource sector manufacturing, compared to urban areas.

Alasia and Hardie (forthcoming) show the level and the change in employment during the 1990s throughout the entire value chain associated with resource production in Canada. Our bulletin focuses only on the resource manufacturing part of the value chain and we focus specifically on the 2001 to 2008 period.

Resource manufacturing is divided into four sub-sectors:

• Food processing (as part of the agricultural and fishing value chain)
• Wood processing (as part of the forestry value chain);
• Petroleum processing (as part of the oil and gas value chain); and
• Metal processing (as part of the mining value chain).

All other manufacturing sub-sectors are grouped together as non-resource or "other" manufacturing. See Appendix 1 for the list of the sub-sectors assigned to each resource manufacturing value chain and the sub-sectors assigned to "other" manufacturing.

Using our delineation of resource sectors, we have tabulated data from Statistics Canada's Labour Force Survey (Box 1) to profile the manufacturing or processing employment in the value chain of these resource sectors. We compare rural and small town areas and larger urban centres (Box 2). As well, we compare the level of manufacturing employment over time (2001 to 2008); we show the change in the share of rural and small town manufacturing that is contributed by resource manufacturing; and we show the role of rural and small town areas in Canada's overall resource manufacturing sector.

However, first, we review manufacturing employment trends over the past 30 years in order to place the 2001 to 2008 period in historical context.