Canada is now open to imposing trade quotas on softwood lumber traded across the US border, with Prime Minister Mark Carney, British Columbia Premier David Eby, and Forest Minister Ravi Parmar looking for a circuit breaker in the decades-long trade dispute between the two countries.
“There is normally some element of managed trade that comes out of any agreement, ” Prime Minister Carney said yesterday, which could include quotas, amongst “a variety of (other) trade factors.”
“One of the asks for years out of the American coalition has been a quota — that there’s a fixed amount of lumber that gets to come from Canada,” Eby told Bloomberg News. “And I think that, for the first time, there’s some willingness to have a conversation about what that could look like.”
“What the premier is saying is that we are putting the option of quotas on the table as part of those discussions,” Minister Parmar told a separate interview yesterday. “But this is a really important time,” Parmar said. “We are looking for the federal government to ensure that softwood lumber is just as important as steel or aluminium and auto in those conversations.”
As it stands, 40% of all Canadian lumber exported across the border originates from British Columbia, with Carney remaining in close contact with Eby regarding the softwood dispute. Yesterday, Carney said that resolving the conflict is a “top priority” as the United States prepares to double various duties to 34.45%. Canada and the United States have been without a softwood lumber agreement since 2015. Premier Eby had previously said that resolving the dispute could “build momentum” for a larger, more comprehensive trade deal.
Trump’s latest threat is to impose a 35% in less than two weeks (August 1st) on Canadian goods that are not currently compliant with the United States-Mexico-Canada Agreement. Carney said he agreed with Eby’s idea of resolving the softwood lumber dispute as part of a larger trade deal, but added that both issues are unfolding along different timelines.
Why US Forests alone can’t solve the country’s lumber needs
In March, Wood Central reported on a Global Wood Trends report claiming that the US Forest Service is under-resourced and ill-equipped to deliver on Trump’s agenda to “free up” forests for domestic lumber production and reduce dependence on Canadian and European wood. “Even with executive orders promoting federal timber harvesting, legal battles from environmental groups are likely to delay or block proposed logging operations,” the report said. “The timber industry faces a severe workforce shortage, including a lack of loggers, truck drivers, road builders, and mill workers.”
Whilst in May, a Fastmarkets report claimed that the United States would need to increase federal timber harvests by 450% to meet the shortfall in Canadian plywood, OSB, and softwood lumber, which make up vast volumes of timber used in single— and multi-family housing: “Theoretically, the US federal lands have ample timber supplies to offset the volume of softwood lumber imported from Canada,” he said. But, “increasing federal timber harvests by (at least) 450% may be a challenge as many headwinds, aside from those related to lumber production capacity, may limit the government’s ability to ramp up timber production.”
- To learn more about the impact of duties on lumber prices, click here for Wood Central’s special feature from March 2025.
