Ontario/Quebec Business Trends
Support Mounts Despite Tariffs
By Richard Lipman
Guest Writer
There are more “big picture” issues and developments that are again affecting the Quebec and Ontario softwood lumber markets, that are having both immediate and long-term impacts. On the Pine side, one Ontario wholesaler noted that, “This is a quiet time for the White Pine industry, from hunting season in November things really do not fully pick up until after the New Year.”
Reported a Quebec manufacturer, “Demand is down but prices are holding ok on the upper grades. The lower grades are very competitive. Spruce prices are in the tank, so it makes it a challenge to get the dollars you need.”
An Ontario manufacturer stated that “the retailers are fairly optimistic coming into the spring. We are hearing that they expect things are going to be pretty much the same as this past year, if not maybe a little better. This will depend on the politics, which is always the unknown. The log supply is good and that everyone continues to find getting labor, especially good workers, is a bit of a challenge.”
As for an outlook, a Quebec producer felt that “things shouldn’t get any worse. It should be fairly steady, but until the lower grades pick up, which of course runs on the demand from industries in general, there will be a surplus of materials out there, so there will be a continued struggle to try to move it.”
Comparing trends, the latest average 2×4 eastern SPF price is listed at $535 (Cdn) by Natural Resources Canada, down from $545 the previous week. The average price for the last four weeks is $553, down from an average of $586 two months ago. The 52-week average price is listed as $634 (Cdn).
Another eastern Canadian sawmill was closed “indefinitely” recently. This time it was the Interfor facility in Ear Falls, ON and the situation will see 160 employees impacted. Said the union representing these workers, “We are well beyond warning signs in the forestry sector and are now seeing widespread job loss in response to the economic warfare waged by the U.S.”
The union is calling for municipal, provincial and federal governments to meet to develop a response plan for forestry workers. They want an industrial strategy for forestry and other sectors exposed to tariffs, which protects jobs, defends against U.S. economic pressure and invests in modernizing the sector. Another union official noted that “no forestry operation in the province is safe if the Ear Falls sawmill isn’t safe.”
The company announced incremental lumber production curtailments for Q4, spread across operations in several regions on both sides of the border. This is due to persistently weak market conditions and ongoing economic uncertainty. They noted “lumber prices in all regions of North America have continued to weaken, from already unsustainable levels. Our revised operating plan for the 4th Quarter reflected our disciplined approach to match production levels with reduced market demand.”
The Canadian Federal Government announced several new initiatives recently, as they saw the need to protect and strengthen the sectors most affected by U.S. tariffs, as the Trump Administration changes its trade relationships. This has had a major impact on Canadians and the need to no longer be reliant on one trade partner. The Canadian government is fully aware that Canada needs to be stronger, more self-sufficient and resilient. It is introducing new measures for the sectors most affected by tariffs to help workers gain skills, support businesses as they modernize and diversify and boost domestic demand for Canadian goods. Looking to the future, they want to ensure workers and industries are ready to seize its opportunities.
They are going to make it easier to build with Canadian lumber. To make it more affordable to transport Canadian lumber across the country, the Government is going to work with rail companies to cut freight rates for transporting lumber inter-provincially by 50 percent beginning in the spring of 2026. To maximize the use of Canadian softwood lumber in housing, Build Canada Homes will prioritize shovel-ready, multi-year projects that can begin within 12 months and that use Canadian wood products. Build Canada Homes, Canada’s new federal home building agency with a funding allocation of around $700 million next year, alone will create $70 million to $140 million of new demand for Canadian wood products and attract private and provincial capital to multiply its impact. In addition, the government will implement its “Buy Canadian” policy later this year, which requires that all contracts worth over $25 million to prioritize Canadian materials, including lumber. As noted, many manufacturers have mentioned over time the difficulty getting and keeping good employees. The new measures will also increase protections for Canadian lumber workers and businesses so they can adapt and thrive in the new global trade situation.
To support softwood lumber firms facing liquidity pressures, Canada will earmark $500 million in funding under the Large Enterprise Tariff Loan facility.The government is also streamlining the process for the forestry sector to access federal support, and will establish a single-window to applications, a one-stop shop to help companies navigate the various programs they might take advantage of. To ensure companies have the financing and credit support they need to maintain and restructure their operations during the period of transformation, Canada will provide an additional $500 million to the Business Development Bank of Canada Softwood Lumber Guarantee Program. Canada will earmark more than $100 million over two years, starting in 2025-26, in program costs to provide support to eligible employers in all sectors with an active Work-Sharing agreement and who commit to support training for employees working reduced hours. This measure will increase the income replacement for eligible workers, helping up to 26,000 Canadian workers in various sectors, including lumber. In addition, to examine and report on how the forest industry can maintain its competitiveness over the long-term, Canada will launch a Canadian Forest Sector Transformation Task Force. It will seek input and recommendations from provinces, territories and industry on managing the sector’s transformation.
On behalf of the softwood lumber industry, the Forest Products Association of Canada (FPAC) noted the announcements reflect progress and is a clear response to the urgency of the situation. FPAC noted the effectiveness of any financial programming will depend heavily on how quickly and effectively it reaches businesses and employees on the ground. FPAC’s President and CEO Derek Nighbor said, “We have been clear that delivering measures quickly in a way that makes a difference requires careful structure and good execution. If the tools aren’t meeting the needs on the ground, it will be all for nothing.”
Nighbor also emphasized that the financial measures alone will not resolve the core challenge posed by the long-running softwood lumber dispute. “For nearly a decade, our sector has been carrying the weight of unfair and punitive U.S. duties,” FPAC said, noting stakeholders (businesses, employees and contractors and most of Canada’s over 300 forest-dependent communities) are feeling the strain. FPAC’s CEO noted, “We can’t lose sight of the bigger picture. Financial programs are important but they are for the short-term so we can weather the storm. As we lean into the things we can control – building more with Canadian wood here at home, finding ways to reduce costs and improve competitiveness while upholding high environmental standards, and growing other international markets – our top priority remains having the federal government achieve a negotiated deal with the United States that works on both sides of the border.”
The Ontario Forest Industries Association (OFIA) also welcomed the Government of Canada’s announcement of new measures to strengthen the forest sector in the face of escalating U.S. trade action. Noting that the 45 percent combined duties and tariffs have placed extraordinary pressure on Canadian producers, threatening jobs and industry dependent communities, OFIA’s President and CEO stated “Prime Minister Carney and the Government of Canada have demonstrated that they will do what is necessary to protect the forest sector from unfair and illegal trade action. These measures need to be accessible to the sector, and the urgency to get this done has never been greater. OFIA is committed to working with all parties to ensure existing and newly announced measures will work for the industry and support all efforts in securing a settlement.”
The Quebec Forest Industries Council (CIFQ) is questioning the origin of the scenarios put forth by Premier Legault during the presentation of his new economic vision recently. In the current circumstances, the forestry sector noted surprise by the Premier’s statements regarding forestry jobs and instead expects to be supported by the government. CIFQ notes it is true that several factors, such as the lumber conflict, tariffs, as well as the challenges of harmonization and access to resources are currently creating uncertainty and increasing pressure on all sector companies, creating the perfect storm. However, companies are far from giving up and throwing in the towel. The Council thinks the Premier should rather call for unity so that all stakeholders work together to implement sustainable solutions. The CIFQ and its members remain active and are ready to collaborate in order to find solutions that will allow industry to navigate this storm and be ready when markets recover. It is essential to protect the forest industry structure since Quebec needs wood construction materials to build houses, as well as all the other products that are derived from the forest industry, like paper, panel products and cardboard. That is why the Quebec forestry sector and its workers must be supported by implementing temporary and strategic measures adapted to the difficult realities they face. It should be remembered that these companies are not only an engine of economic development for hundreds of communities but also provide essential goods from a local, renewable and sustainable resource. These products help replace single-use plastics and carbon-intensive materials, especially in the construction sector.
