What 45-per-cent tariffs mean for B.C.’s forest sector
Tariffs on Canadian softwood lumber have surged to 45 per cent, putting B.C.’s forest sector under extreme pressure. UBC forestry expert Harry Nelson explains what’s driving the dispute and what it could mean for mills, workers and communities.
A sawmill and timber manufacturer located within the Malcolm Knapp Research Forest in B.C. Photo: UBC Forestry
Tariffs on Canadian softwood lumber have climbed to 45 per cent, following a recent increase of 10 per cent on lumber and 25 per cent on engineered wood products. UBC faculty of forestry associate professor Harry Nelson says this escalation pushes B.C.’s forestry sector into uncharted territory, threatening not just sawmills but also pulp and secondary manufacturing.
Why are Canada and the U.S. still fighting over softwood lumber after 40 years?
The U.S. claims Canada subsidizes lumber production through our stumpage system—how we manage timber on public lands. They argue it gives Canadian producers an unfair advantage. Canada and trade panels have consistently rejected that claim, but it resurfaces in cycles of tariffs and negotiations.
Canada’s softwood lumber tariffs now total 45 per cent. B.C. Premier David Eby described the situation as an existential crisis—do you agree?
Yes—tariffs this high, combined with the aftermath of fires and beetle outbreaks, are an existential threat. Canada has already paid the U.S. about $10 billion in lumber duties, and we’re unlikely to recover much of that this time.
The industry used to believe there were guardrails—that the U.S. would push, but only so far. That assumption no longer holds. The scale and scope of these tariffs are unprecedented.
Do you expect more mill curtailments and closures?
It’s hard to imagine we won’t. Companies are 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.
Despite U.S. claims, they can’t meet their lumber needs without Canadian supply. The wild card is demand, which continues to fall. If it drops further, the pressure on producers will intensify.
How detrimental are these tariffs to secondary wood product industries?
Devastating. The sawmill sector will be hit hard, but so will contractors and the pulp and paper sector. 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.
What’s your outlook for the next six months and how should governments respond?
The next few months will likely to see more mill closures and significant impacts on forestry-dependent communities. Governments need to act quickly—not just for mills, but for contractors and support services.
These businesses don’t have the same financial buffers as large manufacturers, and the federal loan guarantee program won’t be enough. We need targeted measures to help rural communities and contractors who have few alternatives, along with longer-term strategies to build resilience in the sector. That means paying closer attention to the people behind the industry and ensuring support reaches those who typically fall through the cracks.
What needs to change in B.C.’s forestry management going forward?
We became too reliant on the U.S. market. Longer-term, we need a more diversified system that’s less vulnerable to market shocks. We have a skilled workforce, expertise and infrastructure in combination with an abundant forest resource to build a sustainable forestry sector.
The new Provincial Forest Advisory Council is currently exploring reforms to encourage innovation, diversification and resilience. The challenge is building a sector that can weather economic and ecological change while supporting rural communities. That means rethinking how we manage forests, how we add value and how we support innovation.
Interview language: English
