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Wood or bark chip mulch is great around trees, shrubs, perennials, and small fruits. A wood/bark chip mulch creates a favourable environment for earthworms and soil microorganisms.  Over time, this helps reduce soil compaction.  

In perennial and shrub beds, wood/bark chips can reduce the need for irrigation by as much as 50%.  Mulching materials that mesh together are more effective at reducing water evaporation from the soil.  Under acute water restrictions, gardeners with wood/bark chip mulch have been incorrectly accused of illegally irrigating because their plants are still faring well, compared to the neighbours!

When placed on the soil surface as mulch, wood/bark chips do not tie-up soil nitrogen.  However, incorporating wood/bark chips into a soil can create a nitrogen deficiency due to a carbon-to-nitrogen imbalance, and can interfere with seedbed preparation.  It takes ten or more years for chips to decompose in a typical soil.  The use of fine chips or sawdust as mulch can tie-up soil nitrogen and can decrease soil oxygen levels.

Wood/bark chips are not recommended in vegetable or annual flower beds where the soil is routinely cultivated to prepare a seedbed. 

Bark Chips