Canada’s forestry sector has become the trade canary in the coal mine, facing structural problems that run well beyond the tariffs imposed under US President Donald Trump. That is according to Energy and Natural Resources Minister Tim Hodgson, whose comments came as he unveiled close to CA$130 million for 56 forestry projects across the country.
He announced the money in Langford, British Columbia, at a meeting of provincial and territorial forest ministers. The funding came alongside a task force report warning that homegrown problems now threaten the industry with an existential crisis.
It comes as the federal government counts around $2 billion in support announced since August 2025, intended to keep the sector competitive and resilient against American duties. Despite that backing, more than a dozen sawmills employing 2,000 workers have closed since August, with a further 40 curtailments costing 1,000 temporary jobs.
Hodgson said the sector had reached a turning point and could no longer survive on life support; instead, it had to be pushed to remake itself. He said it must be challenged and supported to “transform into a modern, thriving industry.”
The report, produced by a task force charged with restructuring the sector, found the most significant barriers to competitiveness were homegrown rather than imposed from abroad. It is named unstable access to affordable fibre, excessive regulation, persistent underinvestment in manufacturing, weak innovation, and inadequate domestic demand for wood-based products.
The Forest Products Association of Canada welcomed the findings, with president Derek Nighbor describing the report as a playbook that now needed to be put into action. The document was “the most robust federal government response we have seen in years,” Nighbor said.
American duties and tariffs on softwood lumber now add up to around 35 per cent, though Washington has yet to confirm a final figure. BC forest minister Ravi Parmar called the announcement good news for workers and communities, and said the findings would help “structurally change it from boom and bust to stability and certainty.”
Not everyone accepted that diagnosis, with the Conservative Party of BC arguing the support announced for forestry fell short of the help other provinces had secured for key industries. Party forests critic Ward Stamer said the blame for mill closures lay closer to home, and that “Ravi Parmar should take a look in the mirror.”
Of the $130 million announced, about $67 million will flow to BC, where the Forest Enhancement Society of BC in Kamloops secured the single biggest grant. Its $37 million project will expand the use of low-value and residual fibre, turning wood that would otherwise be burned into pulp, bioenergy, and pellets.
