Canada’s forestry sector is the trade “canary in the coal mine” as it faces structural challenges that go beyond Trump-era tariffs, says the federal minister responsible for natural resources.
Tim Hodgson made that comment Wednesday as he unveiled close to $130 million in funding for 56 forestry-related projects across the country.
Hodgson, who is in Langford, B.C., to meet with Canada’s provincial and territorial forest ministers, also released a report suggesting homegrown problems, such as unstable access to fibre and lack of domestic demand that are threatening the industry with an “existential crisis.”
He said the additional funding for the industry is on top of the various supports worth $2 billion, which the federal government has announced since August 2025, to help the sector remain competitive and resilient in the face of American tariffs.
But the minister also said forestry finds itself at a “turning point” and that despite federal support, more than a dozen sawmills employing 2,000 workers have closed since August.
Hodgson said the disruptions facing the industry have also led to 40 curtailments, with 1,000 temporary job losses.
Hodgson said the industry is in a crisis and needs to change.
“(Rather) than simply extending the sector’s life support, we now must challenge and support it to transform into a modern, thriving industry that can build Canada’s future and achieve sustained, independent prosperity,” he said.
B.C.’s forestry sector ‘in crisis’ amid 45% U.S. tariffs: economist
It says that while external pressures, most notably sustained U.S. softwood lumber duties, have deepened industry challenges, the “most significant barriers to competitiveness are homegrown.”
The report says obstacles include unstable access to affordable fibre, excessive regulations, persistent underinvestment in manufacturing, weak capacity to innovate, and inadequate domestic demand for wood-based products.
“Absent immediate, co-ordinated, and decisive action, the forest sector faces an existential risk,” it says.
Derek Nighbor, president of the Forest Products Association of Canada, said the report offers a playbook, which now needs to be implemented.
“This is the most robust federal government response, we have seen in years to the core issues holding our industry back,” he said in a statement.
Of $130 million announced Wednesday, about $67 million will flow into B.C.
The biggest recipient among the 56 projects is the Forest Enhancement Society of B.C. based in Kamloops, B.C.
It will receive $37 million for a project to increase the use of low-value and residual fibre, by offsetting collection, processing and transportation costs that limit the use of such fibre.
Fibre, which would otherwise be burned, will instead be turned into pulp, bioenergy, and pellets.
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Ravi Parmar, B.C.’s forest minister, said the projects announcement is good news for the forestry sector, its workers and communities that depend on it.
“Forestry is facing a difficult period in time, and one would argue, the most difficult period in the history of our country with unfair, unjust duties and tariffs by Donald Trump and the United States government.”
U.S. duties and tariffs on softwood lumber add up to around 35 per cent, but no final figure from the U.S. has been determined.
The provincial minister added that the report had important findings to get the sector “back on its feet, but also move it, structurally change it from boom and bust to stability and certainty.”
Parmar said the Canadian Council of Forest Ministers will discuss the recommendations of the task force during the next two days and Hodgson said the federal government will eventually publish an action plan, which will serve as the foundation of the forestry strategy.
Parmar has also introduced legislation aimed at addressing some of the barriers identified in the report, such as issuing new timber sales licences covering a wider range of activities, and speeding up salvage licencing.
The government says it expects the changes to increase B.C.’s fibre supply by as much as 17,700 truck loads annually.
