Ontario/Quebec Business Trends
Ontario Juggles Tariffs, Slow Housing And Aboriginal Lawsuits
Richard Lipman
Guest Writer
Big picture developments continue to dominate the news and people’s thoughts and actions. According to a producer in Quebec, “the CMHC (Canada Mortgage and Housing Corp.) is saying the pace of homebuilding in Canada continues to slow, with no near-term sign of a turnaround. Combined with some of the other indicators, like predictions that U.S. remodeling is slowing and the decrease in consumer confidence in both countries, you don’t get overly optimistic.”
Noted one Ontario sawmill representative, “it is interesting to see the U.S. House voting to block the tariffs on Canada, because it is hurting people in their states. It seems like there is a chance this might also pass in the Senate, but President Trump will veto it. While this is largely symbolic, it is a bit reassuring that we have people in our corner.” Natural Resources Canada price data shows Eastern Spruce-Pine-Fir 2×4 current and 4-week average prices at approx. $555 Cdn. and the 52-week average at $610.
Unifor delegates from across Eastern Canada have chosen Domtar as the target company for the upcoming round of pattern bargaining. The pattern agreement, when reached, will serve as a template for talks with all other employers in the eastern forestry sector—sawmills, along with paper mills and forestry operations, impacting some 14,000 union members. “This is a critical moment for our forestry sector and for the members we represent across Eastern Canada, said Unifor National President Lana Payne. The industry is facing several serious challenges, but we have been through difficult times before and I have complete confidence in our local leaders to achieve fair collective agreements that make progress for workers.”
Among the top bargaining priorities are wage improvements, pension security, benefit coverage, employment insurance protections and measures to support workforce stability and the long-term sustainability of operations. Unifor is Canada’s largest union in the private sector, representing 320,000 workers in all major areas of the economy. As the forestry sector remains under attack with tariffs imposed by the U.S., Unifor continues to urge the federal government to increase domestic demand through initiatives such as Canada’s Housing Plan, which can help stabilize markets for Canadian wood and paper products.
Domtar reported it is going to curtail its lumber production because of challenging market conditions, U.S. tariffs and ongoing economic conditions. It plans to temporarily drop its lumber production by 150 million board feet for the first quarter of 2026 across its Ontario, Quebec and U.S. facilities. “The demand for lumber in North America remains weak, requiring us to adjust our production levels in line with market conditions, said Luc Theriault, CEO, Wood Products, and president – Canada, for Domtar. While this decision is necessary, we are fully aware of the impact it will have on our employees, contractors, suppliers and the communities in which we operate.”
The company will continue to monitor market conditions and adjust its production plans accordingly. Their sawmill in Ignace, Ontario was expected to shut down in mid-March, directly affecting 25 employees. Said a business representative for the United Steelworkers local representing the workers “shutdowns and layoffs in the industry are not surprising in these uncertain times. You know, we do not have a softwood lumber agreement right now. It’s insane that sawmills in this country must deal with that but they do. Until we get some sort of softwood lumber deal in place, this is going to continue to happen in this province and this country. It’s a really difficult time for Canadian producers to operate.”
Homebuilding continues to decrease in Ontario, causing concern.
GreenFirst Forest Products, which owns four sawmills located in Ontario, announced recently that it has entered into a $30 million term loan under the Softwood Lumber Program announced by the Government of Canada. The program was introduced to support eligible Canadian softwood lumber producers facing adverse market conditions, including reduced demand and pricing pressures. The financing is intended to support liquidity and ongoing operations amid the market volatility in the North American lumber sector.
Joel Fournier, the CEO of GreenFirst said the “financing under the federal Softwood Lumber Program strengthens our balance sheet and provides important liquidity during a difficult period for the industry. We appreciate the continued support of the Government and BMO as we work to position GreenFirst for long-term stability and value creation.”
Following the U.S. Supreme Court ruling on Trump tariffs, there is no relief for the Canadian lumber sector and no end to the uncertainty for investors. The new tariffs, announced after the ruling striking down the use of the emergency powers to levy broad duties from Canada and other nations, appear to not apply to USMCA-compliant goods and will not stack on top of existing sector-specific tariffs. A 10 percent duty on softwood lumber currently sits on top countervailing and anti-dumping duties that the U.S. Commerce Department boosted from 14.5 percent to 35 percent recently.
The ruling making the tariffs invalid got a mixed reaction in Quebec, because key sectors, including lumber, remain subject to tariffs. Quebec’s Economy Minister said, “at first glance, the effects for Quebec seem limited as American tariffs on steel, aluminium, lumber and other key sectors remain in place and continue to weaken our industries, our jobs and our regions.” Reactions from key Quebec economic and union stakeholders noted that they are far from ending the trade war with their neighbors. The President of the Quebec’s CSN (Confederation of National Trade Unions) noted in a written statement, “We welcome this decision by the U.S. Supreme Court but not everything is settled for the Quebec economy. A significant number of American tariffs continue to affect several of our sectors such as aluminum, steel, copper and forest products.”
British Columbia Premier David Eby said the ruling by the U.S. Supreme Court that strikes down the far-reaching global tariffs opens the door to challenge tariffs that currently hurt his province’s softwood lumber industry. It “opens up the possibility” of BC mounting a legal challenge in U.S. courts to the additional 10-percent tariff, imposed last fall based on national security grounds. He indicated “the additional 10 percent tariff has been quite devastating” for the softwood lumber sector. Eby noted that while a future legal challenge falls “pretty squarely” within federal responsibility, BC might take a direct run at it. If the option of direct legal action is available, we will pursue it. We will do what is necessary to defend our softwood lumber industry.” He said the ruling is an “important decision even if just to restore some of our confidence in one of our closest friends and allies and trading partners.”
A group composed of almost 40 Indigenous land guardians, alongside hereditary and traditional chiefs has filed a lawsuit, and the claim is Aboriginal title over three large tracts of Quebec forest land. The main interest in the action is more control over forestry, but there could be wider implications. Several Indigenous nations had over the summer been disrupting the logging industry on their traditional/ancestral lands. This was to show their opposition to the controversial forestry reform bill, that Quebec decided to scrap in the fall. The goal of that proposed legislation was to protect communities dependent on the commercial forest industry and looked to divide public forests into zones designated for conservation, multi-purpose use, or forestry.
Criticism from Indigenous leaders and environmental groups was forceful, noting that reserving large land tracts for logging infringed on their rights. The group from the Haute-Mauricie and Saguenay-Lac-Saint-Jean regions want the power to decide who can log on their lands and where, and they want to be compensated. The plaintiffs are asking the court to declare all supply guarantees and intervention permits granted to forestry companies null and void. They want to ensure the protection of their traditional way of life. “We are not against forestry workers, but permits must be issued better, and we must be consulted,” said Dave Petiquay, one on the land guardians involved. He said he is doing this for “future generations, including non-Indigenous ones, but also for animals, which can’t speak for themselves.”
The group wants to protect the resources and are claiming ancestral right, which is also an ancestral title. Their lawsuit comes after another Aboriginal title case in British Columbia where a judge, last year, granted title to the Cowichan Nation, a recognized First Nation, over 300 hectares of land in Richmond, invalidating the Crown’s title and throwing residential property rights into question. The Quebec case is different in that the group of land defenders deem themselves to be hereditary chiefs, and hold their title through traditional laws and lineage, not through the band council system that elects chiefs.
The territories they are aiming at are territories they say that are used right now by companies, with the assistance of the Government of Quebec to destroy the forest. If successful, the suit would have repercussions for hereditary chieftains across the country and could impact the future of major infrastructure projects. The land defenders have indicated they could go all the way, if necessary, to the Supreme Court of Canada. This is a first in Canadian history, where the land defenders are being represented. There are, it is thought, no private property owners on the territories in question.
