Canadian wood products manufacturers continue to operate at levels far below peak capacity, as softening demand for lumber and engineered wood products, combined with new tariffs and duties, have created a very difficult environment for Canadian producers. That is according to new data from Statistics Canada, which shows that capacity utilisation in December fell to just 70.3 per cent, its lowest level since July 2024 (69.6 per cent). A sharp decline from 74.5 per cent in November, as producers look to life beyond the United States.
Capacity utilisation is widely viewed as a key measure of how intensively manufacturers are using their production lines, and the latest figures suggest a broad‑based slowdown. In addition to the drop in wood manufacturing, Statistics Canada also reported that “furniture and other related product manufacturers” saw utilisation fall by more than 4.9 per cent over the same period, sliding from 79.1 per cent in November to 74.2 per cent in December.
The downturn comes as Wood Central reported last month that Canada’s lumber industry is being pushed to rethink long‑standing production practices — including the potential abandonment of the imperial system in favour of the metric system.
For decades, the U.S. has absorbed the overwhelming majority of Canada’s softwood lumber. But with duties rising and political tensions escalating, Taylor said the industry’s dependence on the American market is no longer sustainable. “This over‑reliance on the U.S. lumber market could not have come at a worse time,” according to Russ Taylor, a global expert in wood trade, who pointed to a surge in trade restrictions since Donald Trump took office.
As a result, he said, sawmills are now being forced to consider retooling for markets that use the metric system rather than North America’s imperial dimensions. And whilst many mills can technically cut both ways, the broader supply chain is not configured for metric‑driven production. “North American construction sizes and grades do not fit many, if not most, end‑use applications in offshore markets,” he said, adding that logs would also need to be cut to metric lengths to meet European and Middle Eastern specifications.
- To learn why Canadian lumber producers are now eying Japan, China and South Korea to grow their export trade, click here for Wood Central’s special feature.
