Ontario Business Trends – May 2023

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Spring has finally decided to show up, as winter held its grip longer than many of us preferred. Logging activities were constrained as a result of heavy snow and spring thaw, seen throughout March and April in some areas.

According to several contacts, business has improved for kiln-dried Ash, and inventories have thus declined. With limited Ash being produced, buyers were purchasing developing stock to replenish their on-hand supplies. Prices were stable.

Aspen demand is holding up, however there are ample kiln-dried supplies on the market. Competition for orders has increased resulting in price pressures. Contacts note green Aspen production has moderated, as sawmills are focusing on more salable species.

Basswood reports are mixed. Some contacts indicate green stock is moving, while others struggle to find outlets for their total production, with prices varying. Kiln-dried Basswood sales are purchased for replacement needs; thus, supplies are ample.

Birch demand is down on domestic markets. With Hard and Soft Maple prices declining rapidly and sharply, thus impacting Birch pricing downward, inventories are high relative to buyers’ needs.

Hard Maple is a key species for most businesses in Ontario and Quebec, and south of the border. It was noted that steady supplies were moving into the marketplace. Secondary manufacturers reported, however, that business was slow; thus, less lumber was needed to meet their immediate needs, and prices were still in a downward slide. Kiln-dried inventories are up, note contacts.

Soft Maple reports are mixed, with some saying business is decent while others say it is not a good seller for them. Buyers for green production are hard to come by, with prices in a wide spectrum.

As wholesalers and secondary manufacturers worked to replenish inventories, green Red Oak was in demand, thus outpacing developing supplies. Sawmills focused on Whitewood logs and were processing less Red Oak at this time. Markets for kiln-dried Red Oak were reported as flat on the domestic front, while demand from international markets improved and had reduced inventories. Prices are reported to be firming.

Business has improved for kiln-dried White Oak on the domestic front, and exports to Southeast Asia are gaining traction, and so supplies are low. Prices for upper grades are firming, noted contacts.

Black Ash was classified as an endangered species in Ontario, and the government is currently considering all input to determine the best way to balance the recovery and protection of Black Ash, said Gary Wheeler, Ministry of Environment, Conservation and Parks (MECP). According to Wheeler, the projected decline in the total number of trees is greater than 70 percent over the next 100 years. Decisions will be made before the end of January 2024, when the two-year temporary pause of protections is scheduled to conclude.

By law, a strategy must be put in place, and it can use a wide range of tools to preserve an endangered tree, from seed banks and replanting in identified ideal habitats, to insecticides aimed at controlling insect species, to full protection of habitats where one or more trees are found, which could potentially place areas of Northern Ontario off limits to forestry activities.

The ministry considered and analyzed information received from Indigenous peoples, stakeholders, other ministries and the public in its decision. The government will reach out to relevant stakeholders and provide public notice of any proposed policy and regulatory approaches to address Black Ash, and provide time to comment prior to making any associated decisions. The MECP will continue to take into account the social and economic realities of life in Northern Ontario in the coming months; hence the reason for suspended protections for Black Ash.

Protecting these trees, which are found throughout Ontario, could have economic impacts on the forestry, development, infrastructure, and agriculture industries, as the species is broadly distributed and may not be easily avoided when undertaking these activities.

Several forestry companies who operate their businesses in Northern Ontario agreed that protections were needed for the endangered Black Ash species, but expressed concerns regarding the economic challenges that the proposal could bring to local sawmills and logging operations. They said forestry businesses already face enough barriers and challenges, and with the proposal, it could make things harder for them, and become significantly less efficient. With wood supply constraints to surrounding mills, the mills directly, and also indirectly, employ a lot of people in the district. They would like the economic impact to be considered in the current proposal and what it would be bringing. The policy’s impact on the mills would hinder bush operations from their ability to cut logs efficiently and effectively, thereby causing a potential increase in the cost of logs to offset operation costs. The potential impact is only theoretical until the final protection policy is put in place, they noted. They are hoping for a gentler policy that takes in all the considerations, rather than a blanket policy for all.

By Miller Wood Trade Publications

The premier online information source for the forest products industry since 1927.

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