Quebec Business Trends – March 2025
Demand Remains Lumber Species Specific As Industry Awaits Potential Tariff Increases
Moving into 2025, businesses are facing more and more challenges, making it even harder to stay in business or even make a profit. The threat of tariffs, an election in Canada, competition from other foreign markets, the rising costs of doing business, and finding qualified trades people, all have an effect on business owners, pushing them to be creative, innovative, and find solutions that will improve their business. Seeking export markets can provide great opportunities, yet the challenge of competition and market demand, along with tariffs play a role in one’s success to gain entry to sell their hardwood products.
Ash supplies are not vastly available due to the Emerald Ash Borer and log exports. Area mills have had more difficulty finding logs. Sawmill production is reported as low, while demand is keeping developing supplies moving, resulting in steady prices for this species. With low kiln-dried inventories and a constant demand for Ash, prices have edged up.
Aspen demand has dropped over time due to secondary manufacturers reducing their orders of this species, as well as competition from other less expensive raw materials and MDF products. Kiln-dried inventories are not high for most grades, although demand is noted as being low.
Contacts noted that there is regular ongoing business for Basswood, but orders from secondary manufacturers decreased as alternative raw materials are being used more instead. Some mills are avoiding Basswood logs, although it was noted green lumber output could increase through the cold winter months. Kiln-dried inventories are not excessive either for many grades and thicknesses.
Logging conditions improved and so some mills are able to get Birch logs. The priority for some businesses is still Hard Maple ahead of other species, but more Birch is available on the market. End users stated they do not need this extra supply, as most have adequate on hand supplies.
Contacts said that the regionally important species Hard Maple is bought for replacement needs rather than building their inventory, although winter cut Hard Maple is a priority at this time. They state green supplies are also improving, which is not overwhelming demand, and prices are steady. Business is decent, they stated, but best for premium color Hard Maple.
Logging conditions improved and it was noted there were ample supplies of Soft Maple logs. Production is climbing for this species with mills shipping total output. Sellers said markets are fair.
Sawmill sources said log decks are growing, but mostly for Maple, not Red Oak. Some mills are choosing not to process Red Oak during the cold season as logs are harder to saw when frozen. Production is controlled, but No. 1 Common and Better grades are readily being absorbed by concentration yards and secondary manufacturers. Prices are firm. Contacts noted that business is not that good for No. 2A and No. 3A, although demand is keeping pace with supplies. Kiln-dried Red Oak markets are noted as decent, with low inventories driving activity.
Demand for kiln-dried White Oak is doing well on domestic and international markets. Compared to this time last year, kiln-dried White Oak is readily available now. Competition has intensified, pushing prices down in reported activity. Contacts stated sales of green White Oak production are doing well.
The threat of tariffs on Canada is one that needs to be taken seriously, and is seen as an aggressive plan of action from newly-elected President Trump. With his statements to international allies during a press conference where he refused to rule out using military action to take control of Greenland from Denmark, a NATO ally, as well as the Panama Canal, and using “economic force” to compel Canada to join the U.S. and get rid of the “artificially drawn line” between the two countries, while dismissing the need for Canadian imports like cars and dairy, and again threatening “substantial tariffs” on Canadian goods that would damage the Canadian economy, are to be heeded by all.
At the time of this writing, Trump had not imposed his 25 percent tariff threat on his first day of office, but announced delaying it to the following week instead. The tariffs were initially linked to demands for enhanced border security, which the Canadian government had sought to address.
Many businesspeople, economists and political leaders feel that President Trump’s threats of imposing a 25 percent tariff on all Canadian exports, would not only hurt the Canadian economy, but also hurt American businesses and especially ordinary Americans by causing a new inflationary surge. This sentiment was echoed by Quebec Premier François Legault.
Premier Legault wrote in a letter, that “tariffs can backfire, especially when imposed against longstanding allies.” He stressed the many goods Quebec and Canada provides in trade to the United States, and the damage that such tariffs would cause not only to Canada but to the United States and its citizens.
“Already, the threat of tariffs has caused a lot of uncertainty, hampering investment on both sides of the border. Our analysis concludes that tariffs of 25 percent on exports from Canada and Mexico would reduce American GDP by at least 1 percent over one year, not to mention inflation,” he noted.
“Canada will not become the 51st state in the union, but our economies are so intertwined that in terms of trade, we already have a customs union. This free trade in goods between our two countries, established by Reagan and Prime Minister Brian Mulroney, has greatly enriched our economies and our peoples. Instead of turning on each other, let’s keep on building a great North American economic powerhouse: it’s in our mutual interest,” he concluded.
