Even though the past 14 months continued to be a challenge for the Hardwood sector, businesses continued to provide goods and services to its customers both to domestic and international markets, showing its resiliency in spite of the global pandemic. With the expectation that the housing sector will continue to be strong both in the U.S. and Canada, housing expenditures hit new record highs in 2021. This will continue to drive the strong demand for Hardwood products and lumber. It is predicted world economies will gain more traction in 2022, which could boost Hardwood lumber sales as well. The need for railroad ties are also expected to increase this year.
Aspen demand for most grades is good noted contacts. No. 1 Common and Better is selling well to interior finished goods manufacturers, and the lower grades are going to pallet producers. They add that kiln-dried inventories are low relative to market demand. As for Ash production, it is not high but edged up the last couple of months of 2021. With the rise in green lumber output, kiln-dried availability had improved, although demand had not been as strong as earlier in the year.
Basswood customers were left scrambling for developing supplies as production was not very high in 2021 for this species. This was due to mills focusing on higher valued species. Kiln-dried stock demand was reported as solid, with low inventories relative to needs.
Hard Maple has been a consistent strong seller throughout 2021, driven by the North American housing markets. Green Hard Maple output did not reach its full capacity. It was expected that it would improve early in 2022 as better logging conditions were expected with ground freezing, and manufacturers, wholesalers and secondary manufacturers looking for more supplies.
With the high demand for Hard Maple, this provided a boost to Birch sales on top of the strong demand for this species. Birch was being purchased as an alternative to higher priced items, such as Hard Maple, and so kiln-dried inventories were thin, with prices rising as a result.
With prices high for Hard Maple, Soft Maple business improved. Demand had been reported as strong before buyers shifted in species selection, which was driven by new home and remodeling construction. Prices continue to rise, noted contacts, and selling kiln-dried stocks as soon as they are available.
As was expected, the federal Finance Minister’s mid-December fiscal and economic update (the most recent report available at presstime) focused on COVID-19 and the Omicron variant fight. The political campaign promises of the last election were pushed back until the spring budget as government adopts an Omicron approach to governing in the short term. The fiscal update projects a $144.5-billion (CAD) deficit for 2021-22. It commits $4.5 billion for “variant response,” money to be used to extend lockdown support measures and expand border testing if necessary. Other spending includes: purchasing rapid tests, booster shots and antiviral drugs; shore up the public health system for ongoing response to COVID-19 activities such as stronger surveillance, laboratory research and emergency management operations.
To help small businesses improve air quality, government introduced a new 25 percent tax credit to offset cost of investing in new ventilation and air filtration equipment. Other funds will go to provinces, territories and First Nations communities for ‘ventilation-related improvement projects’ at schools, hospitals, libraries and community centers. $50 million was planned for 2021 to strengthen supply chains and address bottlenecks.
Funding was introduced in one-time payments for Guaranteed Income Supplement (GIS) recipients who received Canada Emergency Response Benefit or Canada Recovery Benefit in 2020 who saw their GIS payments clawed back; and over two years extend the home office expenses tax deduction and increase the temporary flat rate to $500 a year.
In late fall, the skilled trades received a boost. The Government of Ontario announced $90 million in funds over three years to alleviate the skilled worker shortage. This will help shrink the growing gap in skilled tradespeople, fuelled by a growing number of retirements combined with fewer youth entering the trades.
According to provincial estimates, by 2025, as many as one in five jobs in Ontario will be in the skilled trades, but the average age of people entering the trades is 29. One third of tradespeople are nearing retirement, with a projected shortfall of 100,000 construction workers over the decade.
The announcement is in response to the Apprenticeship Youth Advisors report commissioned last fall by the province. Some recommendations include providing financial support for non-apprenticeable skilled trades, establishing select secondary schools as regional skilled trades training institutes, and making it easier for employers to participate in the Ontario Youth Apprenticeship Program (OYAP). An additional $2.9 million is provided, for a total of $20 million annually, to expand OYAP.
Starting in 2022-2023, funding for pre-apprenticeship training will increase to $77 million annually. The number of hires from underrepresented groups will be increased as well for women, Black, Indigenous, and People of Color, newcomers, Francophones and people with disabilities.
In addition to funding, the province said its new training authority, Skilled Trades Ontario, would become operational in January 2022. It’s being designed to help more young people find suitable careers in the skilled trades and complete their training faster.
