Canada’s forestry industry is warning that a new wave of U.S. tariffs on Canadian wood products will not only intensify challenges for forest-dependent communities but also increase housing costs for American consumers.
The concerns follow the Trump administration’s announcement of a proposed 50% tariff on hundreds of categories of Canadian products, including several types of plywood, paper and other wood-derived materials. The new duties are scheduled to take effect on Aug. 19 and would be imposed under Section 338 of the Tariff Act of 1930, a little-used trade provision dating back to the Great Depression.
Derek Nighbor, President and CEO of the Forest Products Association of Canada, said the tariffs would have consequences on both sides of the border.
He argued that taxing essential construction materials used to build and renovate homes would ultimately increase housing costs for American families while disrupting the highly integrated North American construction supply chain.
The latest measures come on top of existing trade restrictions affecting the Canadian forestry sector. Canadian producers have already faced long-standing duties on softwood lumber, and last year the United States imposed an additional 10% tariff on certain softwood lumber products under Section 232 of the Trade Expansion Act of 1962, citing national security concerns.
According to analysts at CIBC, softwood lumber itself is not expected to be included in the new 50% tariff package. However, they believe products such as plywood, fibreboard, particleboard and veneered wood panels are likely to be significantly affected.
U.S. officials have linked the latest tariffs to Canada’s provincial restrictions on U.S. alcohol, the country’s supply-managed dairy system and quotas affecting American automobiles, which were introduced in response to earlier U.S. tariffs.
President Donald Trump also clarified that the newly announced duties are separate from previous tariff threats related to wildfire smoke drifting from Canada into the United States.
Nevertheless, CIBC analysts cautioned that the administration could still use Section 232 tariffs as a future negotiating tool, particularly given the president’s recent comments regarding Canadian wildfire smoke.
The proposed tariffs arrive during an already difficult period for Canada’s forestry industry.
Ian Dunn, President and CEO of the Ontario Forest Industries Association, described the proposed measures as a severe and unjustified obstacle to the integrated North American forest products supply chain.
He also highlighted the impact of the ongoing wildfire season in Northern Ontario, where preliminary estimates indicate that more than 7,250 square kilometres of forest have burned this year, making it the province’s most destructive wildfire season on record.
And Dunn said trade barriers inhibit the forestry industry’s ability to actively and sustainably manage forests, warning a weakened sector could backfire on wildfire mitigation efforts.
The forestry sector in British Columbia is also in trouble.
Canfor Corp. announced earlier this month it was permanently shutting down its Northwood pulp mill in Prince George, B.C., costing 300 jobs. The company cited a combination of weak global pulp prices and ongoing difficulties securing sufficient fibre supplies.
The province has also experienced several major mill closures over the past two years. The Crofton pulp mill, a West Fraser sawmill in 100 Mile House, and a Drax pellet mill in Williams Lake all shut down in 2025.
The BC Council of Forest Industries is saying one of Canada’s most important resource industries is facing growing pressure. Since 2023, 21 lumber mills in British Columbia have shut down permanently or indefinitely.
