Canada Lines Up $6.5 Billion to Rebuild Its Tariff-Hit Mills
Biorefineries and biofuel plants are in line for the largest share through a new $4 billion accelerator at Export Development Canada.
Prime Minister Mark Carney meets sawmill workers on a Canada Strong visit, with his government’s budget lining up $6.5 billion for the forest sector from 2027-28. (Photo Credit: Alamy Stock Photo)
British Columbia’s forest companies are pressing for help to keep their mills running this year, with none of the money in the forestry strategy Canada unveiled in Thursday’s budget due to flow until 2027-28. That is according to Kim Haakstad, president and chief executive of the BC Council of Forest Industries, who said on Thursday that “companies need improved conditions to keep operating today so they can invest in the opportunities of tomorrow”.
“We need a clear strategy with concrete actions and timelines to get more wood moving, attract investment, and protect forestry jobs and communities,” Haakstad said in a statement, warning that funding alone “cannot resolve the strain on our competitiveness”. She still welcomed the C$6.5 billion as recognition of forestry’s place in Canada’s economy, but said it was not yet clear how much of the money would reach the sector in British Columbia.
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Prime Minister Mark Carney’s government plans to put the largest share, $4 billion, into a new Forestry Sector Accelerator at Export Development Canada, which would invest in new large-scale plants and in converting existing ones into biorefineries and biofuel plants. It would also give Natural Resources Canada $2 billion to help companies modernise facilities and equipment, with a further $500 million to strengthen fibre supply chains, each spread over six years from 2027-28.
It comes as Vancouver-based Canfor said on Wednesday that it expected its Northwood pulp mill in Prince George, British Columbia, to close by the end of the year, cutting 300 jobs. The company, which booked an $88 million net loss for the third quarter after its Fox Creek sawmill in Alberta wound down, said lower US duties in force since mid-October would partly offset weaker Western spruce-pine-fir lumber prices.
Ravi Parmar, British Columbia’s outgoing forests minister, called the federal money a “good start” and said Canada’s forest sector needed “its fair share” after the billions that have gone to autos and steel. (Photo Credit: Province of British Columbia/Flickr)
“Due to unjustified U.S. tariffs, changing global markets, and shifting wood product needs, our forest sector is facing significant pressures,” the budget states. Carney’s government says the new money adds to $2.9 billion in support it has announced for the sector since August 2025, when it unveiled measures to transform the softwood lumber industry.
In June, Wood Central reported that the government’s action plan was meant to lower the risk of investing in projects from mill upgrades starting at $250 million to biorefineries needing as much as $3 billion each. That work was due to come together in a formal Forest Sector Strategy for Canada by the end of this year, the government said at the time, after its own task force warned that the sector faced an existential risk.
“The more subsidies Canada provides to its industry, the more duties will get collected at the border,” said Zoltan van Heyningen, executive director of the US Lumber Coalition, in April. His coalition, which says it speaks for large and small American softwood producers, keeps a running tracker of the Canadian support it calls subsidies, counting from August 2025, the same period the budget’s $2.9 billion covers.
Meanwhile, the United Steelworkers union welcomed the budget’s investment in forestry, wood products, and critical minerals as “important steps toward the industrial strategy Canada needs”, less than three weeks after forestry workers urged Canada’s governments to fund mill upgrades. The union warned that Canada could not become “masters of our own destiny while allowing the jobs and industrial capacity we have today to disappear”, echoing the title the government gave its budget.
Most Canadian producers still pay a combined US dumping and subsidy duty of 24.75 per cent on the lumber they ship to the United States, with Donald Trump’s 10 per cent tariff charged on top. Wood Central reported in July that Canada and British Columbia had written into their Cooperative Prosperity Agreement a package of measures to rescue the province’s softwood lumber sector, due by the start of next month.
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