As we moved away from the American Thanksgiving holiday, hunting season and headed towards the Christmas Holiday season, the industry saw many changes and faced many challenges, yet it feels they have much to be grateful for. It saw a rebound in activity since the summer. With the housing demand being good on both sides of the border, it boosted flooring, cabinet, millwork, moulding, and furniture demand. Secondary manufacturers are being kept busy in filling orders. The slowdown that was expected by COVID-19 did not happen. Instead, there was a surge in the renovation and home repair markets which caused a strain on supply chains. Businesses are continuing to operate despite tight demands, even though we are in a second wave of COVID cases across the country, with Ontario and Quebec having the highest number of cases.
The industry looks forward with cautious optimism to the new President in the United States and hopes that trade relations will improve for both countries as the new president steps in. Only time will tell how the softwood lumber agreement will play out, and what lies ahead for those in the Hardwood sector.
Contacts note that demand for Soft and Hard Maple, Red and White Oak is strong, with some shortages being felt in certain areas contacted. It was noted that supplies of pallet material were not meeting buyers’ needs. There is also the ongoing concern of finding qualified workers in the forestry sector. It was felt that logging activity would improve as we headed into winter with ground freezing, thus improving sawmill production as well.
Some reported their log decks were limited for Ash as there is very limited volume being harvested, and green production is down for this species. Sawmills and wholesalers are selling total Ash output. Prices were reported to have firmed, but market interest in kiln-dried Ash is not good. Sales are dependent on additional width and length sorts.
Hard Maple sales for most grades and thicknesses are reported to be doing well. Mills have no difficulty getting orders for total production. Some contacts note that competition for No. 1 Common and Better is driving prices higher. Color designation is also driving prices, they comment. Demand for kiln-dried upper grades is strong with supplies being low, which is causing prices to rise as well.
There has been increased interest in Soft Maple for most grades and thicknesses, especially for No. 1 Common and Better.
Sales of kiln-dried stocks are also reported as doing well to solid. Sales of Aspen have been steady and keeping in line with its production, with No. 1 Common and Better and low-grade markets absorbing developing supplies, and prices being stable. Sales and shipments of kiln-dried stocks were steady as well. Log decks of Basswood were reported as being down, with sawmills focusing on higher valued species over Basswood, such as Hard Maple, Walnut, Soft Maple, Red and White Oak. Basswood supplies are sufficient to meet buyers’ needs. It was anticipated that whitewoods production would increase during the end of November into December.
Due to the rise in demand since June for Birch and low sawmill production through most of the year, kiln-dried inventories have been reduced and prices have firmed. Green Birch output is not keeping pace with buyers’ needs. Demand from cabinet, wood component, millwork and moulding manufacturers has put a strain on supplies of 4/4 No. 1 Common and Better.
The federal government announced late November the new Canada Emergency Rent Subsidy program for businesses struggling to pay bills because of COVID-19. It replaces an earlier rent-support program for businesses introduced in the spring that saw little pickup because it relied on landlords to apply for help. The new program covers up to 65 percent of rent or commercial mortgage interest on a sliding scale based on revenue declines, with an extra 25 percent available to the hardest-hit firms.
The Canadian Federation of Independent Business, which represents thousands of small companies across the country, welcomed the new rent program as long overdue for firms hard hit by COVID-19.
Canada and Britain struck a new interim trade deal on November 21st, that beat the looming December 31 Brexit deadline, replacing Canada’s current agreement with Britain under the European Union that covers trade between the two countries. The interim pact gives Canada and Britain another year to reach a more comprehensive agreement while also warding off a no-deal scenario that would have triggered new tariffs on a range of Canadian exports on January 1st. There are not many details known at this time.
“This is a good moment,” said Prime Minister Justin Trudeau as he announced the deal during a video news conference with his British counterpart, Boris Johnson.
“Free trade is an important part of the way we’re going to bounce back from COVID,” Johnson said. “And using that, this is a moment in which to tackle climate change, but also to create hundreds of thousands of jobs in green technologies.”
With Britain’s decision to leave the EU after its Brexit referendum means that the Comprehensive Economic and Trade Agreement (CETA) will no longer apply to the country at the end of the year.
The new deal preserves CETA’s key provision — the elimination of tariffs on 98 percent of Canadian exports to Britain — until a more comprehensive agreement can be reached later. Britain is Canada’s fifth-largest trading partner, with $29 billion in two-way merchandise trade in 2019.
International Trade Minister Mary Ng said legislation would be introduced in Parliament soon so the interim deal could be ratified.
The Conservative trade critic, the Canadian Chamber of Commerce, and the Business Council of Canada all said they want government to publish the full details of the agreement. Canada’s business community offered a mixed reaction, welcoming the economic certainty the interim deal offered while asking for more specifics. It is hoped details will be made available soon.
We wish everyone a happy, healthy, and prosperous 2021! Stay safe!
