A Good Start: Federal Funds Help, But Big Challenges Lay Ahead For Forest Products Sector

In early August, Canada’s forest products sector received some positive news from Prime Minister Mark Carney to the tune of a new $1.2-billion investment designed to support the industry and increase the use of Canadian wood products in domestic construction. The new funding includes $700 million in loan guarantees and $500 million that will be put towards supporting market diversification, innovations in production, and initiatives supporting Indigenous-led forestry business development and diversification.

“The forest sector is a pillar of Canada’s economy. As we shift from reliance to resilience, Canada’s new government will ensure the industry can transform to seize new opportunities in Canadian and international markets. In the face of a changing global landscape, we are focused on what we can control – building Canada strong with Canadian expertise, using Canadian lumber,” Prime Minister Mark Carney stated as part of the announcement.

One of the highlights of the announcement was that Build Canada Homes (once established) would provide financing to private home builders in Canada that utilize Canadian softwood lumber and mass timber products.

Associations from across Canada voiced their approval of this show of federal support as responses from the BC Council of Forest Industries (COFI), Forest Products Association of Canada (FPAC), Alberta Softwood Trade Council, B.C. Lumber Trade Council, Canadian Wood Council, and many others, were released immediately following the news.

“Initiatives aimed at supporting workers, fostering innovation, enhancing liquidity, and promoting export development through organizations like Canada Wood are important steps toward stabilizing the sector and supporting government efforts to build more homes for Canadians. These investments also lay the foundation for long-term competitiveness,” stated Kim Haakstad, president and CEO of COFI.

While the news of new funding was well-received, a long-term trade deal with the U.S. that benefits the Canadian forest products sector is still the priority for many industry members.

“Encouraging the federal government to get the best trade deal for Canada with our U.S. neighbours continues to be the most important wish of our sector and forestry communities across Canada,” stated FPAC president Derek Nighbor.

Canada’s forest products sector isn’t alone in wanting a new trade deal secured with the U.S. The National Association of Home Builders (NAHB) expressed its concerns about U.S. housing affordability recently in a press release calling on the Trump administration to consider the impact of additional tariffs on the building products sector, and urged the administration to consider a new softwood lumber agreement:

“With housing affordability already near a historic low, NAHB continues to call on the Trump administration to carefully consider how placing additional tariffs on lumber and other building materials will raise housing prices and impact housing supply. We are also urging the administration to move immediately to enter into negotiations with Canada on a new softwood lumber agreement that will provide a fair and equitable solution to all parties and eliminate tariffs altogether.”

While a new SLA would provide a certain level of stability, Canada’s forest products sector has other pressing needs that require the attention of federal and provincial governments. A lack of available fibre supply continues to plague regions of the country, creating added uncertainty to companies considering investing in expanding their Canadian operations.

Whether trade stability is restored between Canada and the U.S., or our sector is forced to look towards new markets for Canadian wood products, the issue of fibre supply must be addressed and remedied for our sector to have a healthy chance to grow, and create much-needed jobs across the country.