New funding support for Quebec’s forestry sector

The Government of Quebec has announced two new financial support measures for the forestry industry, with a specific focus on softwood lumber processing companies. Together, the measures represent $120 million in funding designed to help sawmills strengthen their resilience, diversify production and move forward with investment projects in a more challenging market environment.

The announcement comes as the sector faces several pressures, including U.S. tariffs, market uncertainty, slower construction activity in the United States and the need to develop more value-added products.

Two programs at the centre of the announcement

The first measure is the new FORET program, short for Financement pour l’optimisation et la résilience des entreprises de transformation de bois d’œuvre résineux. It is intended for softwood lumber producers looking to optimize processing activities and diversify production.

FORET has a $60 million envelope for 2026-2027 and will be administered by Investissement Québec. According to the announcement, it will be available until March 31, 2027.

FORET: a loan to support working capital

In practical terms, FORET will provide loans of up to $5 million. The amount will be based on the company’s working capital needs over the next 24 months. The program is aimed in particular at projects related to production diversification or the commercialization of higher value-added products.

Repayment terms may vary when a company commits to strategic investments that strengthen its resilience. For forestry businesses, this may mean building more flexibility into their operations while preparing for a shift toward products that are less dependent on traditional lumber market cycles.

ESSOR: a new stream for investment projects

The ESSOR program will also be enhanced through a $60 million investment over six years, from 2026-2027 to 2031-2032.

The new fifth stream is also intended for softwood lumber processing companies. Its goal is to support structured investment projects, especially for businesses that may not need additional working capital but still want to modernize operations or develop new production capacity.

This stream will offer loans covering up to 30% of eligible project expenses. A portion of up to 15% may be forgiven, depending on the applicable terms and conditions.

What Quebec wants to encourage

In comments reported by Radio-Canada, Quebec’s Minister of Natural Resources and Forests, Kateri Champagne Jourdain, presents diversification as a central response to the current crisis. Her message is that sawmills need to move beyond standard lumber and develop more value-added products.

The examples cited make the government’s target more concrete: pellets, exterior siding, biomass, biochar and glued laminated timber, including larger wood components and beams. The minister also noted that mills that have already invested in secondary and tertiary wood processing appear to be more resilient under current market pressure.

Radio-Canada also reports that the government will assess the condition and performance of each mill, as well as its region and competitiveness, when reviewing files. That detail matters: the announced support is not only about maintaining existing operations, but about backing projects that can change a company’s economic positioning.

Why these measures matter

The forestry industry remains an important economic pillar for many Quebec regions. According to figures cited in the announcement, Quebec’s forestry sector generated $6.3 billion in GDP in 2025, supported nearly 56,000 direct jobs and created economic activity in more than 650 municipalities.

For eligible businesses, these new measures may be an opportunity to revisit investment plans, finance transformation projects or accelerate the commercialization of higher value-added products.

For forestry businesses considering a modernization, diversification or higher value-added processing project, the next step is to validate eligibility and project fit against the funding criteria. helloDarwin can help companies identify relevant programs, assess their potential eligibility and organize the information needed before applying.