Canada's Minister of Energy and Natural Resources, Tim Hodgson, has paired the announcement of nearly CA$130 million in new funding with a warning that the sector's deepest problems originate at home, not in the United States.
"Canada's forestry sector has become the first sign of the trade crisis, the 'canary in the coal mine', facing structural problems that go far beyond the tariffs set by US President Donald Trump," Hodgson said. His remarks came as the minister unveiled nearly CA$130 million in investment across 56 forestry projects nationwide.
Hodgson announced the funding in Langford, British Columbia, at a meeting of provincial and territorial forestry ministers. The funding followed a task force report warning that long-standing domestic problems now threaten to escalate into an existential crisis for the entire sector.
The announcement came as the federal government has already channelled around $2 billion into supporting the sector since August 2025, aiming to preserve its competitiveness and resilience against US tariffs. Despite that financial backing, more than a dozen sawmills have closed since August, costing 2,000 jobs, while a further 40 facilities have scaled back operations, temporarily affecting 1,000 jobs.
Hodgson stressed that the sector has reached a turning point and cannot simply stay on life support; it must, in effect, be forced to transform. He said the industry needs to work through its difficulties and receive support so it can "turn into a modern, thriving industry".
The report, prepared by the task force responsible for the sector's restructuring, concluded that the biggest obstacles to competitiveness are domestic rather than externally imposed. Among the main causes cited were unreliable access to timber at affordable prices, excessive regulation, a long-standing lack of investment in manufacturing, weak innovation, and insufficient domestic demand for wood products.
The Forest Products Association of Canada welcomed the report's findings, with its president, Derek Nighbor, describing the document as an action plan that now needs to be put into practice: "This is the strongest response we've seen from the federal government in years."
US customs duties and tariffs on softwood lumber currently total around 35% combined, although Washington has yet to confirm the final figure. British Columbia's Minister of Forests, Ravi Parmar, called the announcement good news for workers and communities, adding that the findings would help "structurally shift the sector from constant boom and bust to stability and predictability".
Not everyone agreed with this diagnosis. British Columbia's Conservative Party argued that the support announced for forestry is inadequate compared with the assistance other provinces have managed to provide their key industries. The party's forestry critic, Ward Stamer, said those to blame for the mill closures should be sought closer to home, adding that "Ravi Parmar should take a look in the mirror".
Of the officially announced $130 million, roughly $67 million will go to British Columbia, where the largest single grant was awarded to the Forest Enhancement Society of BC in Kamloops. Its $37 million project will expand the use of low-value wood and wood residues, converting timber that would otherwise be burned into pulp, bioenergy and pellets.