Quebec Business Trends
Cautious Steps Into 2026
The hardwood sector continues to face challenging business conditions and uncertainty. As the country focuses on eliminating barriers between provinces and trying to negotiate a trade deal with the U.S. to ease imposed tariffs, businesses continue dealing with the shortage of qualified workers, supply chain issues, finding new opportunities both domestically and to export markets, while remaining profitable.
Ash log availability has improved in certain areas; however, they are still a challenge to obtain. Market requests are for additional green No. 1 Common, while demand is down for green No. 2A and kiln-dried No. 1 Common and No. 2A.
Basswood activity has increased from the moulding, trim and shutter sectors, even though its production has been limited for the past year, thus keeping supply aligned with demand for most grades and thicknesses.
Cherry demand is stable on markets, with China orders improving. Demand is better for upper grades than the common ones, noted contacts. Hickory markets are similar, they added, where purchases have been reduced for this species.
Demand for the regionally important Hard Maple is better than most other species, due to the kitchen cabinet sector being a strong customer. Supplies are picking up slightly compared to year-end 2025 reported figures. Prices are noted as increased for color designations of this species.
Soft Maple demand is also improving, with most kiln-dried items being manageable. Prices remain relatively stable.
Green Soft Maple, commented contacts, is selling well, with demand strong for some unselected stock and for No. 1 Common and Better grades.
Birch sales were hard to come by at the beginning of the year as cabinet sector demand was down, residential flooring manufacturers were controlling their purchases, and the case goods manufacturers’ use of this species was also low. Sales were based on color and specific lengths, especially for the kiln-dried stocks.
Red Oak sales were reported as rather slow starting into the new year, with sluggish demand from China. White Oak demand is fairly steady, thus keeping prices steady as well. Exports of this species were also reported to be picking up slightly.
Availability of Poplar over the past year was higher than demand, with prices going down as a result. Now, domestic and international markets are causing inventories to fluctuate, yet are manageable, with prices stable. Contacts reported order files for this species were reaching into early this year, however future demand was unknown.
Lumber demand ebbs and flows as markets adjust.
The Consumer Price Index (CPI) rose 2.2 percent year-over-year (y/y) basis in November 2025 (the most recent data available at press time), matching October’s pace. However, inflation at the grocery store rose 4.7 percent y/y, up from 3.4 percent in October, the fastest pace of increase in nearly two years. This acceleration was driven by fresh fruit prices (+4.4 percent y/y), while beef (+17.7 percent y/y) and coffee (+27.8 percent y/y) prices continued to be big contributors to grocery inflation.
There was some offset from gasoline prices, which are still down 7.8 percent from a year ago in November, but were up on the month. Overall goods prices are up 1.5 percent y/y, but durable goods prices are up 2.7 percent y/y. Durable goods inflation has picked up this year, after being in deflation in 2024.
Service inflation fell in November to 2.8 percent y/y driven by lower prices for travel tours (8.2 percent y/y).
Traveler accommodation was also down 6.9 percent y/y, benefiting from a comparison to elevated hotel prices a year ago due to the Taylor Swift concert in Toronto. But it wasn’t all special factors, rent inflation also slowed to 4.7 percent y/y amid broad-based slower rent growth across regions.
The Bank of Canada has focused on broader “underlying inflation” at year-end 2025 but looking at their median and trim core inflation metrics, both cooled below three percent, running at 2.8 percent y/y in November. Zeroing in on trends over the last three months of 2025, core inflation is running closer to the Bank’s two percent target, with trim and median inflation running at 2.4 percent and 2.2 percent respectively, on a three-month annualized basis.
With cost of living prices rising for food, shelter, clothing, and gas, and other goods and services, Canadians are being cautious in their purchases. Home buying is being put on hold for many wanting to make the move, or moving to a rental, or doing some home renovations, as prices rise for these goods and services.
