Trump’s tariffs on lumber are already having a major impact on Canada’s besieged forest products industry, with the new tariffs and duties, which combine to add 45% in costs to all lumber and engineered wood products that travel across the border, arriving when fires and the mountain-pine beetle have thinned supplies.
“Yes — tariffs this high, combined with the aftermath of fires and beetle outbreaks, are an existential threat,” according to Harry Nelson, associate professor in the faculty of forestry at the University of British Columbia. “Canada has already paid the U.S. about $10 billion in lumber duties, and we’re unlikely to recover much of that this time.”
According to Nelson, companies are now weighing whether to curtail, temporarily close or shut down entirely: “If mills near the U.S. border — some of the best positioned in B.C. — are taking downtime, that tells you how serious this is.” And for many operations, margins are already thin; faced with suddenly higher export costs, producers are choosing to pause production rather than absorb losses.
The effects will not be confined to primary timber producers. Secondary industries — including manufacturers of window frames, furniture, and engineered wood products — and the pulp and paper sector, which relies on mill residues, face sharp ripple effects if sawmills scale back. “The sawmill sector will be hit hard, but so will contractors and the pulp and paper sector,” Nelson said. “These industries are interconnected—sawmills feed pulp mills with lower‑value fibre. If sawmills shut down, the whole ecosystem suffers, from contractors to pulp and paper manufacturers.”
And even without the latest round of tariffs, lumber prices and construction activity in the United States have cooled from prior peaks. “Despite U.S. claims, they can’t meet their lumber needs without Canadian supply,” Nelson observed, noting that a further drop in demand would compound pressure on Canadian producers and increase the likelihood of curtailments.
For communities that have long relied on forestry jobs, the near-term outlook is bleak. Nelson predicted additional curtailments and closures and has urged the Carney government to introduce interventions that go beyond large, loan guarantees to address the particular vulnerabilities of rural suppliers and contractors. “These businesses don’t have the same financial buffers as large manufacturers, and the federal loan guarantee program won’t be enough,” he said. “We need targeted measures to help rural communities and contractors who have few alternatives, along with longer‑term strategies to build resilience.”
Industry advocates and regional leaders are pressing for quick, practical relief: bridge financing for contractors, support for displaced workers, and incentives to stimulate domestic processing and alternative markets. Longer term, Nelson argued, the province and federal government must redouble efforts to diversify markets and deepen value‑added manufacturing at home so that B.C. is less reliant on a single export market. “We became too reliant on the U.S. market,” he said. “Longer‑term, we need a more diversified system that’s less vulnerable to market shocks.”
The Provincial Forest Advisory Council, established this year, is already exploring reforms to encourage innovation, diversification, and resilience. But policy changes, Nelson cautioned, take time to translate into economic stability. “The challenge is building a sector that can weather economic and ecological change while supporting rural communities,” he said. “That means rethinking how we manage forests, how we add value, and how we support innovation.”
