Minister says Canadian forestry crisis goes beyond Trump tariffs

Canada’s natural resources minister says the challenges facing forestry go beyond Trump-era tariffs and instead are structural, as he unveiled close to $130 million in funding for 56 projects across the country.

Tim Hodgson, who is in Langford B.C. to meet forest ministers from across Canada, also released a report suggesting homegrown problems including unstable access to fibre and lack of domestic demand are threatening the industry with an “existential crisis.”

He says the additional funding 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 says the sector 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 says the disruptions facing the industry have also led to 40 curtailments, with 1,000 temporary job losses. 

While forestry has been a mainstay of Canada’s economy and the lifeblood of many communities, Hodgson says 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 says.

Hodgson also released a report by a task force charged with finding ways to restructure and retool the sector. 

The report 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.”

It says that these 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. 

U.S. duties and tariffs on softwood lumber add up to around 35 per cent, but it is not clear yet where the U.S. government will eventually land.

This report by The Canadian Press was first published June 3, 2026.

By Wolfgang Depner | Copyright 2026, The Canadian Press. All rights reserved.