American Tariffs: Impact on the Canadian Forestry Sector

The new customs duties imposed by Washington significantly increase the cost of Canadian wood in the United States.The trade conflict over lumber between Canada and the United States has just reached a new level. In late September, U.S. President Donald Trump enacted, in the name of national security (Section 232 of the Trade Act), additional tariffs of 10% on Canadian softwood lumber and 25% on certain upholstered wood products (upholstered furniture, kitchen cabinets, and bathroom vanities). This 10% surtax brings the total duties imposed on Canadian lumber entering the United States to 45% (including existing countervailing and anti-dumping duties). As for wood furniture, hit with a 25% tariff, the rates could climb even higher in early 2026: starting January 1st, upholstered furniture and vanities could be taxed at 30%, and kitchen cabinets at 50% for countries that have not concluded a trade agreement by then.On the Canadian side, the reaction has been strong. This hardening of measures is seen as a "second major blow" by the forestry industry, already heavily penalized by the duty hikes earlier in the year (from 20% to 35% this summer on lumber). Approximately 75% of exported Canadian lumber is destined for the American market, representing an annual value exceeding $10 billion. Tariff hikes of this magnitude directly threaten the sector's competitiveness and employment. "The wood and furniture industry fears massive job losses and a decline in competitiveness," it is reported, particularly in the provinces of Quebec and British Columbia, where these industries have a strong presence. Gilles Pelletier, president of the Quebec Furniture Manufacturers' Association, denounces the justifications as unfounded: in his view, invoking national security "has no basis, it's completely ridiculous," especially since American wood species (e.g., walnut) are used in Quebec furniture exported to the United States. On the American side, some stakeholders are also criticizing these measures: the builders' association warns that they could increase the cost of building a new home by an average of about $2,200 USD.This new escalation, justified by Washington in the name of protecting American industrial capacity and national defense, extends a dispute that is nearly 40 years old. Since the 1980s, lumber has been a source of recurring litigation: the United States accuses Canada of indirectly subsidizing its producers (since the majority of Canadian forests are public, with timber sold through a royalty system they deem too low). Canada has won most of the rulings on this issue before international trade bodies, but the dispute periodically resurfaces in the absence of a lasting agreement.Faced with this situation, Canadian authorities are seeking to mitigate the shock. The federal government has announced the suspension of certain Canadian counter-tariffs to ease trade tensions. It has also launched assistance programs for affected businesses and workers: for example, the Regional Tariff Response Initiative (RTRI), deployed through regional development agencies, aims to provide financial support to SMEs affected by the U.S. tariffs. In parallel, Ottawa is encouraging the use of Canadian materials in national projects ("build Canadian first"), notably through a commitment to prioritize Canadian wood in public construction contracts. Finally, a call for consultations has been launched to explore the diversification of markets beyond the United States, as well as potential negotiations within the framework of CUSMA.In this tense context, each of Canada's forestry provinces is experiencing its own unique reality. The following chapters outline the state of the forestry sector in four key provinces—British Columbia, Quebec, Alberta, and Ontario—and highlight, for each, a support measure (grant or assistance program) implemented to sustain the industry.

British Columbia: A Pillar in Full Transition

British Columbia (B.C.) has one of the largest and most diversified forestry industries in the country. As the home of lumber and pulp and paper giants, the province has long been the leading producer and exporter of Canadian wood. In 2024, B.C.'s forestry sector directly or indirectly employed over 50,000 people, and its forest product exports reached $11.4 billion on global markets. This industry is an economic pillar, especially for many rural communities in the interior and on the coast, where sawmills and panel plants are often the main employers.However, the B.C. forestry sector has been facing major challenges for a decade. First, the depletion of the traditional timber supply is beginning to be felt. The province has suffered the impact of natural and biological disasters: the mountain pine beetle epidemic ravaged millions of hectares of pine forests in the 2000s and 2010s, significantly reducing the available wood volume. This was compounded by massive forest fires, with the devastating fire seasons of 2017, 2018, and 2023 affecting both the resource and forestry infrastructure. Finally, in 2021, the provincial government decided to protect certain old-growth forests by suspending logging in ecologically sensitive areas, which reduces the short-term harvestable volume. Consequently, the annual harvest volumes have been revised downward. While a few years ago the target was a harvest of 45 million m³, official projections forecast a drop to 29 million m³ by 2027-2028, well below the calculated annual allowable cut (about 60 million m³). This supply contraction is leading to sawmill closures and job losses in several localities.In addition to these internal constraints are external trade pressures. British Columbia, the main exporter of lumber to the United States, is on the front lines of the lumber dispute. The new U.S. tariffs of 35% (anti-dumping/countervailing duties) plus the additional 10% surtax are a severe blow to the province's companies, which were already heavily dependent on the American market. The provincial association COFI (Council of Forest Industries) has expressed its concern about this "additional pressure while the industry is already facing major challenges." B.C. producers are trying to diversify their export markets (particularly to Asia, with China being a significant outlet for lower-grade lumber), but the United States remains an essential customer.To support the transition of the forestry sector, several measures have been put in place by public authorities. The B.C. government is seeking to stimulate value-added manufacturing and innovation in the wood industry. To this end, in 2024 it launched the BC Manufacturing Jobs Fund (BCMJF), a $180 million fund to support industrial manufacturing projects in the regions. A significant portion of this fund—over $22 million—is dedicated to projects related to wood products, in order to modernize equipment, develop new product lines (engineered wood, bio-products, pellets, etc.), and build innovative processing facilities. "We are already seeing the impact of the Fund on the growth of the value-added wood products sector in B.C.: fostering innovation among our local manufacturers ensures long-term jobs and a sustainable future for the forestry sector and the communities that depend on it," says Brian Hawrysh, CEO of BC Wood.In parallel, the province has implemented programs to assist workers affected by restructuring. One of the flagship grants is the Bridging to Retirement program, created in 2019 and since extended. It offers up to $75,000 to eligible forestry employees and contractors nearing retirement to encourage them to leave the workforce earlier. This program aims to soften the impact of plant closures by allowing older workers to leave under dignified conditions, while freeing up positions for a younger workforce or facilitating the consolidation of staff. In the longer term, British Columbia is also investing in training and reskilling: provincial and federal funds support training in new forestry technologies and the retraining of workers for emerging sectors (e.g., bioenergy, innovative forest products).Despite these challenges, B.C.'s forestry industry remains an economic pillar. It is gradually reinventing itself to adapt to a new paradigm: less harvest volume, but more local processing and high-value-added products. The province is focusing on the sustainable management of its public forests, which cover a large part of its territory. In fact, over 94% of B.C.'s managed forests are certified as sustainable by independent organizations, an asset for international marketing. The provincial government is also continuing its negotiations with Ottawa to obtain support in the lumber dispute, while hoping for a new agreement with Washington that could stabilize access to the American market in the future.

Quebec: A Diversified Industry Shocked by Tariffs

Quebec is home to a rich and diversified forestry sector, covering the production of lumber, pulp and paper, and panels, as well as furniture manufacturing. The province extensively utilizes its public forests (Crown forests)—about 90% of the harvest—through a system of regulated concessions and cutting rights. Historically, Quebec has always been one of Canada's forestry heavyweights: even today, it accounts for one-third of the country's forestry jobs, the largest share among the provinces. It is estimated that approximately 60,000 Quebecers work directly in the entire forest-wood chain (including logging, sawmills, panel plants, paper mills, and wood product manufacturing). The industrial fabric consists of multinationals (Resolu/Domtar, Canadian Pacific Forest Products, etc.) as well as numerous regional SMEs.The importance of Quebec's forestry sector is also measured in revenue: it alone generates billions of dollars in export earnings each year (softwood lumber accounted for $10.1 billion in Canadian exports in 2020, a large portion of which came from Quebec) and fuels a diverse manufacturing ecosystem. Quebec is distinguished by a strong secondary wood processing industry. Notably, its furniture industry holds a prominent position nationally. In 2021, Quebec's furniture industry comprised nearly 1,275 companies employing about 25,000 workers, which corresponds to 45% of jobs in Canada's furniture sector. This segment, focused on both the domestic market and exports (mainly to the United States), generates over $4 billion in annual sales in Quebec.The announcement of the new U.S. tariffs has therefore caused great concern in Quebec, where a dual impact is feared: on the one hand, on lumber exporters (sawmills, construction wood producers), and on the other, on furniture and kitchen cabinet manufacturers. "Furniture is produced all over Quebec [...] The furniture industry is mainly present in small communities, often with several members of the same family in the same factory. That's what's so unfortunate [about these tariffs]," says Gilles Pelletier, highlighting the potential social impact of the American measures. For Quebec sawyers, the 10% surtax is in addition to the countervailing/anti-dumping duties already in place since 2017, bringing the total levy on the value of their lumber shipments to the United States to about 40-45%—a level unprecedented in the history of this conflict.Faced with this situation, Quebec's industry and the provincial government have reacted on several fronts. Quebec denounces the "unjustified" nature of the U.S. tariffs, recalling that the provincial forest regime was extensively revised in 2013 to align with market practices (auctioning of timber, etc.). Furthermore, Quebec argues that its wood is not in surplus in the American market but is, in fact, complementary to American production: "We can never completely do without the American market, any more than the Americans can do without Canadian wood," summarizes Vincent Miville, director of the Federation of Quebec Forest Producers. This reminder of interdependence aims to encourage the search for a negotiated agreement.In terms of concrete measures, the Quebec government announced a series of initiatives in October to support its forestry companies. First, defensive actions aim to apply economic pressure: for example, Quebec has withdrawn certain American products (liquors) from SAQ stores as a symbolic reprisal and is considering imposing penalties on public contracts awarded to American suppliers without an establishment in Quebec. At the same time, Quebec is seeking to diversify the markets for its forest industry outside the United States. A special unit has been created to explore new international markets for Quebec lumber, and a program called PANORAMA has been launched to help companies increase their exports to other countries (market prospecting, logistical support, etc.). The goal is to reduce dependence on the American neighbor in the medium term by developing markets in Asia, Europe, or elsewhere for Quebec wood products.Furthermore, Quebec is focusing on innovation and upgrading its forest products. A key measure in this regard is the enhancement of the Programme Innovation Bois (PIB), a provincial grant program designed to support modernization and advanced processing in the wood industry. In May 2025, the Quebec government injected an additional $25.5 million over three years to strengthen this program. Since 2022, the PIB had already invested $75 million in 83 innovation projects across Quebec. These projects include the construction or conversion of plants, production diversification (e.g., towards engineered wood products, biofuels, bioplastics), as well as the robotization and automation of processes. The stated objective is to ensure the sustainability and development of Quebec's forestry sector by making it more productive, more innovative, and better equipped to face the uncertainties of international markets. A concrete example funded through this program is the support for the Cascades plant in Cabano, in the Bas-Saint-Laurent region, for the conversion of by-products (hemicellulose liquor) into an agricultural biostimulant—an innovation that could open up new markets.In parallel, Quebec continues to invest in workforce training and the promotion of forestry careers to address the challenge of generational renewal (many experienced forestry workers will retire in the coming years). Budgets have been allocated to train or retrain employees affected by slowdowns and to attract new talent, particularly in the fields of sustainable forestry and value-added processing. Finally, the Quebec government is collaborating closely with Ottawa in the legal defense of the lumber file (by supporting Canada's appeals before U.S. courts and the WTO) and is calling for the implementation of federal compensation for companies affected by the tariffs.Thus, despite the current storm, Quebec is working to strengthen the resilience of its forestry sector. With its vertical integration (from forest to furniture) and abundant softwood and hardwood resources, it aims to position its industry in promising niches (green wood construction, forest bioeconomy, etc.), while hoping for a de-escalation of the trade conflict with the United States.

Alberta: Maximizing the Resource and Supporting Communities

In Alberta, a province primarily known for its oil industry, the forestry sector nevertheless holds a significant place, particularly in the northern and western parts of the territory. The vast boreal and subalpine forests of Alberta provide lumber (spruce, pine, fir) and pulpwood, which are processed by several sawmills and panel/pulp plants scattered across the province (in regions like Grande Prairie, Peace River, Athabasca, etc.). Although smaller in scale than in B.C. or Quebec, Alberta's forestry industry contributes significantly to the rural economy: it is estimated to have an economic impact of over $14 billion and supports more than 30,000 jobs (direct and indirect) in the province. Approximately 70 Alberta communities depend heavily on forestry activities—whether it be timber harvesting, wood processing, or related services.Alberta manages its public forests (which cover most of the forested land) through long-term Forest Management Agreements granted to companies. These agreements require companies to practice sustainable forestry, including reforestation of harvested sites, wildlife protection (e.g., woodland caribou habitats), and full utilization of the resource (valorization of wood chips, sawdust, etc.). In fact, about 96% of the managed forests in Alberta are certified as sustainable according to the AFPA (Alberta Forest Products Association). The industry strives to meet strict environmental standards, which gives Alberta's wood products a good reputation on the global market in terms of sustainability. In 2024, Alberta's forest product exports exceeded $4 billion—mainly to the United States, China, Japan, and South Korea. The sector generated about $7.5 billion in revenue in 2024 and invested $6.5 billion in its facilities over the last decade, a sign of continuous modernization.Nevertheless, Alberta's forestry industry faces specific challenges. One of the most pressing is the threat of the mountain pine beetle. This pest, which has devastated forests in B.C., has spread to western Alberta (the Hinton, Jasper, etc. region), killing millions of lodgepole pines. To contain the infestation and protect its still-healthy pine forests (especially in the northeast), the province has deployed a Mountain Pine Beetle Control Program. This program funds surveillance, felling and burning of infested trees, as well as research into biological control methods. This is a crucial issue because the health of the forest resource determines the future of the local industry. Furthermore, Alberta must balance logging with the protection of iconic wildlife (the woodland caribou, a threatened species whose habitat overlaps with logging areas): caribou habitat management plans have been funded to reconcile forestry and conservation (for example, the Caribou Habitat Recovery Program managed by the FRIAA association).On the trade front, U.S. lumber tariffs obviously impact Alberta's producers, even if they are smaller in scale compared to the giants of British Columbia. Most Alberta sawmills export a significant portion of their production to the United States and are therefore subject to the same countervailing duties (around 20%) plus the new 10% surtax. Some have had to slow down production or diversify their sales to the Canadian domestic market to mitigate losses. The Alberta Softwood Lumber Trade Council (ASLTC) welcomed the federal government's intervention in August 2025 to support the sector: Ottawa announced, among other things, $700 million in loan guarantees for lumber companies and $500 million for product and market diversification, as well as $50 million for training and income support for 6,000 affected workers. These measures, though federal, were deemed crucial for Alberta's sawyers, who ship the bulk of their production to the U.S. market and are caught in the grip of the duties.At the provincial level, Alberta focuses its efforts on sustainable management and resource optimization. A notable element is the existence of the Forest Resource Improvement Program (FRIP), a program managed by the FRIAA in partnership with the government. This program, funded by specific levies paid by the industry, finances projects that enhance the forest resource beyond legal requirements. For example, FRIP subsidizes initiatives for additional reforestation, tree genetic improvement, applied silviculture research, wildlife habitat restoration, and the control of forest diseases. By supporting these supplementary activities, Alberta aims to increase the long-term sustained yield of its forests and maintain a resilient forest environment (which will benefit both the industry and ecosystems). This is a form of "reinvestment" of forest revenues into natural capital, often cited as a best practice.In addition, the province encourages industrial innovation through partnerships and dedicated funds. For example, it has collaborated with the federal government on pilot projects in the forest bioeconomy (production of biofuels from logging residues, pilot plants for bioplastics derived from wood fiber, etc.). The idea is to diversify the range of products from Alberta's forests and to valorize 100% of the harvested biomass. In this regard, wood pellet plants (exported to Europe and Asia as a carbon-neutral fuel) and energy cogeneration projects fueled by wood by-products are emerging in Alberta. The Alberta government, for its part, has committed to facilitating these developments by reducing red tape and supporting the training of a skilled workforce.In summary, Alberta's forestry sector, although more modest, plays a crucial role for many communities and seeks to position itself strategically. The province is banking on the responsible management of its forests, market diversification (Alberta's exports have reached trans-Pacific customers, a sign of openness), and active support for workers and businesses to navigate the turmoil of the trade conflict. The approach is to "develop more with less": maximizing the value derived from each cubic meter of wood harvested, while ensuring the renewal of the resource for future generations.

Ontario: Modernizing the Industry and Sustaining Northern Jobs

Ontario, Canada's most populous province, is less often associated with forestry than its counterparts in the West or Quebec. Yet, Northern Ontario is home to vast mixed and boreal forests that support a leading forestry industry. Historically, entire towns in Northern Ontario—from Thunder Bay to Kapuskasing, including Kenora, Timmins, and Cochrane—developed around sawmills and pulp and paper mills. Today, Ontario still has a vast forestry complex: harvesting of softwood and hardwood, manufacturing of plywood and OSB panels, paper mills producing newsprint and packaging paper, not to mention secondary processing companies (flooring, moldings, etc.). This sector remains vital for the regional economy of Northern and Eastern Ontario. In 2023, Ontario's forestry sector generated $21.6 billion in revenue from manufactured goods and services, and in 2024 it supported over 128,000 jobs (direct and indirect) across the province. These figures attest to the weight of Ontario's wood industry, which is often underestimated: according to these estimates, Ontario has the largest number of forestry-related jobs among Canadian provinces (including numerous indirect jobs in transportation, forest engineering services, etc.).However, the Ontario forestry sector has gone through difficult periods in recent decades. In the 2000s, increased competition, a rising Canadian dollar, and declining demand for newsprint led to the closure of several paper mills and sawmills. Localities like Smooth Rock Falls and Red Rock saw their mills close, causing a local economic shock. Nevertheless, the industry has restructured: the remaining mills have become more productive and have converted to growth products (for example, packaging paper for e-commerce, or OSB panels for construction). In addition, new investors have taken over some sites (e.g., the pulp mill in Dryden or sawmills in the Atikokan region), breathing new life into the industry.On the trade front, Ontario—like the other provinces—is impacted by U.S. tariffs on lumber, as it is an exporter of softwood to the United States. Companies like GreenFirst (which operates former Rayonier sawmills in Cochrane, Kapuskasing, Hearst...) and Resolute Forest Products (now part of Domtar) are affected by these duties. The Ontario government has expressed its concerns, stressing that these tariffs threaten entire Northern communities whose economies depend on wood. In response, Ontario has engaged in close dialogue with Ottawa to coordinate the response (for example, Ontario wants to ensure that federal support funds are accessible to its businesses and workers).Above all, the province has deployed its own programs to support and modernize its forestry industry. An emblematic measure is the Forest Sector Investment and Innovation Program (FSIIP), a provincial grant program designed to boost the competitiveness of Ontario's forestry sector. This program has invested nearly $72 million in recent years to provide forestry companies with the tools and technologies needed to create jobs and increase productivity. Specifically, it funds projects such as the purchase of state-of-the-art equipment (e.g., AI scanners to optimize wood cutting), mill modernization (automation, robotics), and the development of new, higher-value-added wood products. For example, in September 2025, the government announced a $5 million contribution through its Forest Biomass Program (another funding stream dedicated to biomass) to help a Northern Ontario sawmill install a smart sorting system that will increase its production capacity by 12% while reducing wood waste by 25% and related GHG emissions by 21%. These public investments aim to "build a more resilient forest sector in the North, ready to seize new opportunities and protect the good jobs that sustain our communities," according to Kevin Holland, Ontario's Associate Minister of Forestry.Ontario also emphasizes the maintenance of strategic infrastructure for the industry. A crucial element in forestry is access to harvesting areas: to this end, the province manages the Provincial Forest Access Roads Funding Program, which reimburses a portion of the costs of building and maintaining forest roads to companies, proportional to the public use of these roads. Each year, several tens of millions of dollars are dedicated to maintaining a network of more than 19,500 km of forest roads in Ontario. This network benefits not only forestry companies but also Indigenous communities, tourism outfitters, firefighters (access for fighting forest fires), and other industries such as mining. By sharing the cost of this infrastructure, the province helps maintain the competitiveness of the wood supply and ensures access to resources even in remote areas.Another priority is the valorization of residual forest biomass. Ontario encourages initiatives that use by-products (branches, chips, bark) that were once burned or left behind. The aforementioned Forest Biomass Program is specifically mandated to support innovative projects converting biomass into marketable products (heating pellets, biofuels, etc.). To date, this program has supported over 55 projects with $50 million. In the same vein, Ontario collaborates with research centers (FPInnovations, universities) to explore niches like mass timber construction materials (CLT panels, cross-laminated timber) to develop a local market for non-residential wood construction. The stated provincial objective is both economic (creating new markets for Ontario wood) and environmental (replacing high-carbon-footprint materials with wood in construction, using biomass for renewable energy, etc.).Finally, Ontario does not lose sight of the human element. The forestry sector is often synonymous with well-paying jobs in regions where alternatives are limited. For this reason, the province has established a federal-provincial partnership committee to identify new support measures for workers and forestry communities, particularly in the event of a prolonged slowdown due to tariffs. Transition funds already exist (for example, to help laid-off workers retrain or to support single-industry municipalities in diversifying their economies), and could be expanded depending on how the trade dispute evolves.In summary, Ontario is addressing the situation by focusing on modernization and diversification. Its forestry industry, once weakened, seems to be rebuilding on a more robust foundation, thanks to close collaboration between the government and the private sector to innovate. Efforts to protect jobs and strengthen the local value chain (from forest to finished products) are at the heart of Ontario's strategy, so that the forest continues to be synonymous with sustainable prosperity for the Northern regions.

Conclusion

This overview of these four provinces shows the extent to which the Canadian forestry sector is both an economic pillar and a world in constant adaptation. The implementation of new, exorbitant U.S. tariffs—up to 45% on lumber and possibly 50% on certain furniture—represents an unprecedented shock that exacerbates pre-existing challenges. Everywhere, industry players fear losses of market share, facility closures, and job cuts, even as many communities depend on the forest for their livelihood. The justifications put forward by Washington (a threat to national security) are unanimously rejected in Canada, where they are seen as a protectionist measure favoring American producers at the expense of a historic partner.Faced with this crisis, Canada is deploying a multi-faceted response. The common goal is to strengthen the resilience of the Canadian forestry industry so that it can weather the tariff storm and remain competitive in the long term.It is also clear that intergovernmental cooperation will be paramount. As the lumber dispute is a national issue, Ottawa and the provinces must work hand in hand to support the sector and speak with a strong, unified voice in trade discussions.

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