Ontario Business Trends November 2026 – Uncertainty Surrounds The Ontario Hardwood Market
Hardwood businesses continue to face challenges and more uncertainty as the tariff war between the U.S. and Canada continues. For hardwoods, it was noted that prices of No. 2A and No. 3A Common for most species had outperformed No. 1 Common & Better prices over the summer and since the beginning of the year, especially for Oak and Maple, and more recently for Birch. This is due, it was noted, to the stronger pallet lumber and cant market, which uses lower grade lumber, where many markets for upper grades were lackluster.
Demand is solid for green and kiln-dried Ash, although a slowdown in Chinese demand was noted. Ash was still moving well to the Far East, noted contacts. With the Emerald Ash Borer decimating many of these trees, supplies tightened over the summer and into early fall, causing it to maintain its price gains.
Aspen moved well over the summer for those cutting it, resulting in price gains mostly being supply-driven. Comments from contacts were positive, although profits for this species are hard to come by for the lower grades.
Green and kiln-dried prices for Basswood were not volatile over the summer, as those cutting it struggled to move it, while some listed it as a worst seller. With production kept low, prices did not slip amid weaker demand.
Birch sales dipped slightly towards the end of summer for kiln-dried, Unselected FAS. It was noted that Unselected Birch uppers were not a popular item, with buyer interest being on Sap and Better lumber which were selling well. For green lumber, the No. 1 Common & Better are down for all thicknesses, as weak demand pushed prices lower despite limited production. The No. 2A and 3A Common listings posted gains on the other hand since 2022. It was noted that the strong industrial markets supported low-grade prices for most species.
Hard Maple demand of green No. 1 Common & Better declined in late summer, and green prices trended down through the summer amid a slowdown in demand and the need for producers to avoid staining before hot weather hit. Kiln-dried prices were noted to have held up better but have since slumped. Contacts stated kiln-dried business was still positive, while others noted a slump in demand for No. 1 Common & Better items.
Soft Maple’s performance has also been slightly less positive. This was due to low prices for Hard Maple upper grades compared with Soft Maple, causing some buyers to purchase Hard Maple rather than Soft Maple.
Red Oak prices rose in mid-September. Supplies of flooring grades of Oak were tight, driven partially by good industrial markets. With an increase in summer production of kiln-dried No. 1 Common & Better Red Oak, prices were under pressure amid the increase in production and the slowdown in Chinese demand.
White Oak demand remains unchanged since the beginning of the summer with green markets oversupplied with No. 1 Common & Better lumber, and flooring grade lumber having tightened.
The Consumer Price Index (CPI) rose 3.0 percent year over year in August, matching the 3.0 percent increase in July.
Year over year, prices for gasoline rose at a slower pace in August compared with July, putting downward pressure on the all-items CPI. Excluding gasoline, the CPI rose 2.4 percent in August, after increasing 2.2 percent in July.
In August, the slowdown in gasoline prices on an annual basis was offset by higher prices for travel tours and rent.
The CPI fell 0.1 percent month over month in August. On a seasonally adjusted monthly basis, the CPI rose 0.2 percent.
Prices for gasoline rose 22.8 percent year over year in August, following a 25.7 percent increase in July. Despite the year over year slowdown, prices for gasoline remained elevated, as the conflict in the Middle East continued in August.
Price growth for food purchased from stores continued to slow in August, rising 2.8 percent year over year after increasing 3.1 percent in July. For the first time since July 2024, grocery price growth increased at a slower pace than the all-items CPI in August 2026.
Prices for dairy products led the deceleration in grocery prices; they rose 0.7 percent year over year in August compared with a 3.1 percent rise in July. Cheese and yogurt were the top contributors to the slowdown in dairy prices.
Although prices for groceries decelerated in September, prices have increased 29.0 percent since August 2021.
At the national level, prices for rent increased 2.8 percent year over year in August compared with a 2.5 percent increase in July. Higher prices in Manitoba (+4.3 percent) and Ontario (+2.4 percent) drove this acceleration.
The trade war between Canada and the United States escalated on September 8, as the Canadian government introduced retaliatory tariff measures. Canada struck back at the U.S. trade war with tariffs the federal government said are targeted at the sectors most affected by Trump’s tariffs.
Canada targeted U.S. wood products with 25 percent tariffs. The products include softwood such as pine, fir and spruce that have been sawed or sliced thicker than six millimeters.
Plywood and veneered panels made from a variety of different softwoods and hardwoods have been hit with a 50 percent levy.
Tariffs of either 25 or 50 percent now apply to products like toilet paper, facial tissue, napkins and similar sanitary products (the rate depends on specific import sizes).
A 50 percent tariff applies to most types of paper and paperboard, envelopes, and corrugated boxes and cases, with a lower 25 percent levy for some imports of kraft paper and bleached paper products under a certain weight.
Wooden furniture for household use is subject to a 50 percent tariff, except for kitchen furniture items, which are tariffed at 25 percent.
On August 26, Ottawa added a 50 percent tariff on imports of wood charcoal.
It is hoped that both countries will reach an agreement and eliminate these tariffs soon.
