Kevin Mason
Economic Outlook: Risks abound for 2026 and beyond but we see little chance of upside surprises for global GDP growth next year. Instead, we forecast modest declines in both US and Chinese GDP in 2026, with the Eurozone growth rate nudging up slightly from depressed levels. US-driven tariffs will stabilize but remain a drag and may become the norm for the next three years. As we’ve noted before, demand won’t be driving upside for the forest sector. Interest rate relief in the US continues to lag earlier expectations (with two further, 25bps cuts expected next year), and a US housing recovery will likely be pushed out to the second half of 2026 at the earliest (potentially 2027). A further weakening of the USD relative to other major currencies will create additional headwinds for US-based producers focused on exports but should also put downward pressure on US imports.
Forest Products Outlook: For most markets, the first half of 2026 will look a lot like 2025, with oversupply resulting in weak prices and lacklustre earnings. Highlights include:
- Housing starts will slip next year to 1.33MM as mortgage rates are expected to move only moderately lower. Affordability issues persist.
- Log prices should trend sideways, with some markets up and others down. Demand from China could rise as its US log ban has ended.
- Lumber prices will move up in 2026 as supply reductions related to high costs (duties, tariffs, etc.) begin to bite harder.
- Panel prices are likely to remain rather low in 2026 due to OSB (particularly) facing oversupply issues as a couple of mills ramp up.
- Pulp prices hinge on supply dynamics; the situation has changed as China has boosted its internal supply. Although prices are moving off their lows, shuts are needed to maintain upward momentum.
- Newsprint demand will drop by double digits next year, but, with some mills currently offline, prices should hold until supply restarts.
- Paper prices will be mixed, with expectations for an increase in uncoated woodfrees; most other grades should hold at/near year-end levels. The removal of tariffs would push prices lower.
- Containerboard producers are expected to drive a price hike in Q1 given the massive capacity shuts this year. Demand will remain sluggish, but rising box shipments aren’t needed to support hikes.
The 
Prime Minister Mark Carney said Canada probably won’t reach a near-term deal with the United States to lower tariffs on sectors such as steel and aluminum, and negotiations are likely to be rolled into next year’s review of the US-Mexico-Canada Agreement. Canada and the US were close to a pact on metals tariffs, but President Donald Trump then terminated talks in October. …“My judgment is that that is now going to roll into the broader CUSMA negotiation, so we’re unlikely, given the time horizons coming together, to have a sectoral agreement,” Carney said on Thursday. “Although if the United States wants to come back on that in those areas, we’re always ready there — we’re very ready.” …Canada is “very ready on forest products to strike an agreement,” the prime minister added. The U.S. has placed roughly 45% duties and taxes on imports of Canadian softwood lumber, to the frustration of US homebuilders.
Canada and the U.S. will launch formal discussions to review their free trade agreement in mid-January, the office of Canadian Prime Minister Mark Carney said. The prime minister confirmed to provincial leaders that Dominic LeBlanc, the country’s point person for US-Canada trade relations, “will meet with U.S. counterparts in mid-January to launch formal discussions”. …Carney met with the leaders of Canada’s provinces on Thursday to give them an update on trade talks. Canada is one of the most trade-dependent countries in the world, and more than 75% of Canada’s exports go to the country’s southern neighbor. But most exports to the US are currently exempted by USMCA. …Canada is the top export destination for 36 US states. Nearly $3.6 billion Canadian worth of goods and services cross the border each day. About 60% of US crude oil imports are from Canada, as are 85% of US electricity imports.
SUNDRE, Alberta – The general manager of what will soon become the former West Fraser – Sundre Forest Products said there will be no impact on staff or operations amid a corporate reorganizing. According to a December letter to vendors, West Fraser is “undertaking an internal corporate reorganization, whereby Blue Ridge Lumber, Spray Lake Sawmills, Crowsnest Forest Products, Sundre Forest Products, and Manning Forest Products will be amalgamated into one company and renamed West Fraser Alberta Wood Products Ltd.” The new entity is to remain a wholly-owned subsidiary of West Fraser Mills Ltd., and the amalgamation and rebranding will be effective as of end of day on Dec. 31. “There’s zero impact to operations,” said Jason Foote. “This restructure is administrative”.
Nine more forestry companies are being supported to modernize, innovate and diversify their product lines and fibre sources to make more high-value, made-in-BC products, and help protect and create jobs. “It’s no secret our forestry sector is facing many challenges, making these investments timely,” said Minister of Forests, Ravi Parmar. …Through the BC Manufacturing Jobs Fund, the Province is contributing $2.5 million to plan or complete capital projects. For example, Canadian Bavarian Millwork and Lumber in Chemainus will receive as much as $1.4 million to help build its new facility. …Additional investments include:
CHEMAINUS, BC — Western Forest Products’ value-added division in Chemainus is receiving up to $7.5 million from the province to add two new continuous dry kilns to its manufacturing operations. The investment, from the province’s BC Manufacturing Jobs Fund, will allow WFP’s facility on River Road to expand the production of high-value products and create new opportunities for second-growth hemlock to produce higher-value products, as well as increasing the stability of the forest company’s operations on Vancouver Island. Minister of Jobs and Economic Growth Ravi Kahlon and Forest Minister Ravi Parmar joined Steven Hofer, CEO of WFP, to make the funding announcement, which is expected to strengthen Vancouver Island’s manufacturing sector. In addition, the ministers announced that 
For Crofton mill workers it was like getting a lump of coal in their stockings. Last week owners of the Domtar pulp mill announced they were shuttering the operation …Who and what is to blame is a complicated tangle, encompassing questions about the future of the forest industry in this province. …While we must confront these questions, the closure also highlights the dangers of community dependence on a particular operation, or even industry. While the workers will, of course, be the most affected, North Cowichan residents will also feel the pain from the mill closure, as it is the municipality’s single biggest taxpayer. ….We can all hope that there will still be a future for the Crofton mill site… but that’s in no way a given. The municipality will be facing some very difficult decisions about services and what it can afford. The larger community will also feel the loss of all of those well paying jobs.
NANAIMO — Exploratory discussions around potentially restricting industrial business activities in Nanaimo irked representatives of Nanaimo Forest Products (NFP), which operates Duke Point’s Harmac Pacific pulp mill. The narrowly approved Nov. 17 notice of motion from Nanaimo city councillor Paul Manly. …Harmac Pacific is actively attempting to rezone a pair of adjacent Phoenix Way lots involving a combined 244 acres bordering Cedar’s Cable Bay Trail. “If this bylaw were to become a reality, it would threaten the ability of our business to continue. …Mayor Leonard Krog is heavily opposed to the motion. “This motion basically says to anyone who wants to invest in this community ‘Don’t bother going to Nanaimo, don’t bother worrying about whether the land is zoned for heavy industry because Nanaimo wants to limit everything that might actually create some real jobs…’” …Harmac Pacific employs roughly 340 employees at its specialty pulp operation, which features a unique employee-owned ownership model.
President Trump’s tariff and trade policies dominated the world’s political discourse through 2025. …The good news is that the BC economy has been fairly resilient through 2025. …BC trade resilience can also be attributed to a broader export commodity mix, dominated by forestry, agricultural and seafood products, as well as mining and oil and gas. …Forest products were tagged with a sectoral tariff of 10 per cent in October 2025, on top of new anti-dumping and countervailing tariffs on softwood lumber. …This has put tremendous pressure on an industry. …It’s difficult to disentangle the impact of tariffs from overall adverse trends in the BC forest industry, many mill closures and curtailments in recent years. BC forestry exports are among the most exposed to the US market, with about 75% of forestry exports headed south. Exports of softwood lumber were down 26% in August 2025 compared to August 2024. Pulp and paper exports were also down 9% on a year-to-date basis compared to 2024.
The Softwood Lumber Board has released its Q3 2025 Report, highlighting significant progress tied to its new strategic plan. This quarter, SLB-funded programs advanced a coordinated strategy centered on high-opportunity sectors—1-8 story multifamily, commercial, K-12 education, and the fast-growing industrial segment—while accelerating project conversions, strengthening building code support, scaling post-secondary education, and expanding outreach in key cities.
EDMONTON, AB – Celebrated for its pioneering mass timber design and construction, commitment to safety and collaborative excellence, Limberlost Place has been named the Global Best Project of the Year by Engineering News-Record (ENR). In addition to PCL Construction and partners taking home the top honour, PCL was also awarded ENR’s Global Best Projects Award for Limberlost Place in the Education/Research category. …Ontario’s first institutional building of its kind, George Brown Polytechnic’s Limberlost Place has set a new precedent for mass timber construction as a model for sustainable, green building innovation. Located in Toronto, Ontario, the 10-story mass timber, net-zero educational facility integrates first-of-its-kind solutions including: Groundbreaking slab band structural system that advances the use of mass timber in multi-storey buildings; North America’s largest mass timber columns soaring three stories tall; and a striking mass timber feature stair, spanning levels three to five as a centerpiece of architectural design.
In 2022, Canada hosted a pivotal UN nature summit in Montreal, where the Liberal government led a diplomatic push for a global deal on protecting ecosystems. Countries agreed to conserve 30 per cent of the world’s lands and oceans. Canada pledged to reach that target by 2030 with a plan to more than double the current amount of protected spaces. Three years later, the landscape is very different. Steven Guilbeault, the former environmental minister … has quit cabinet over new moves to expand oil and gas resource development. Prime Minister Mark Carney’s first budget barely mentions nature and his government is focused instead on major resource projects. Now, environmental groups and others are concerned that the apparent pivot from the Carney government will reverse years of progress made on nature conservation. Among the initiatives now facing uncertainty: new national parks and protected areas, as well as federal support for the “win-win” Indigenous guardians program…
In 2025, the BC Wildfire Service (BCWS) worked tirelessly with people and communities to fight wildfires and build community resilience throughout the province. “We’re coming off our second-worst wildfire season in Canadian history,” said Ravi Parmar, Minister of Forests. “From technology to equipment and training, all to protect people and communities, the BC Wildfire Service has shown us that they are a global leader in wildfire work. Thanks to the dedicated members working tirelessly to fight the threat of wildfire. In 2026, we will raise the bar even higher. …Since April 1, 2025, more than 1,350 wildfires burned an estimated 886,360 hectares of land in B.C. The 2025 season compared to the past five years:
VICTORIA — The BC government says cutting red tape has allowed provincial pulp mills to more than double their use of timber salvaged from forest fires. The Ministry of Forests says in a statement that mills processed more than one million cubic metres of wildfire chips in 2024-25, up from 500,000 cubic metres in 2023, and representing about seven per cent of all processed wood. Forests Minister Ravi Parmar says that BC can’t let anything go to waste, including logs that have been burned in wildfires.” The statement says pulp mills rarely accepted burned timber before 2022, but both government and industry recognized the opportunity of turning wildfire-affected fibre into wood chips. It says that faster permitting and stronger partnerships between government and industry made it even easier to use that type of timber and the work will continue in 2026.
Over an hour of discussion followed BC Timber Sales’ (BCTS) presentation at the Sunshine Coast Regional District’s (SCRD) Dec. 11 committee of the whole meeting. …BCTS representatives, a delegation at the committee meeting, faced a direct ask from Gibsons area alternate director Annemarie De Andrade to pause harvesting activities on TA0519, in the Gibsons aquifer recharge area pending further study of the impacts of such logging. “We can continue to listen and continue with a light footprint, but we cannot pause,” was the response from BCTS’s Chinook Business Area timber sales manager Stacey Gould. She explained BCTS has a role as a revenue generator for the province. …That “lighter” BCTS footprint… is havesting about half of the volume it is permitted to on the lower Sunshine Coast. To make up for that, higher levels of harvesting need to be undertaking in other locations.
A B.C. court has issued a rebuke to the City of Vancouver, declaring it overstepped its authority when it authorized the cutting down of thousands of trees in Stanley Park without approval from the park board. Handed down Dec. 17, the decision from B.C. Supreme Court Justice Jasvinder Basran analyzed a multi-stage approval to cut down thousands of trees in Vancouver’s largest park. In 2023, the city entered into an $1.9-million supply agreement with B.A. Blackwell and Associates to remove an initial 7,000 trees over six months [due to] a hemlock looper moth infestation… According to Basran’s judicial review, the initial decision to cut down trees in Stanley Park … was made without the proper authority. …The judge found the city circumvented the park board’s authority in the first phase of the tree removal, but that it went through the proper channels to approve the second and third stages of the work.
The Alberta government isn’t ruling out lifting a near 20-year ban on hunting grizzly bears, a divisive issue between conservationists, politicians, and hunters. Forestry and Parks Minister Todd Loewen says all options are on the table following several recent bear attacks and close encounters in the province. Grizzlies are being spotted in parts of the province they haven’t inhabited in more than a century. “There’s no plans at this time yet. We don’t want to take anything off the table. I think it would be irresponsible not to have all options on the table so we’re looking at everything,” Loewen said. There has been a ban on hunting grizzly bears in Alberta since 2006. …Loewen says there are several factors that would have to be considered …including the number of bears in the province and recent grizzly-human interactions, and their expansion into the foothills.
QUEBEC — A rare old-growth forest in Quebec’s Mauricie region is at the centre of a growing conflict between conservation advocates and the provincial government, after forestry roadwork was authorized in an area currently under review for protected status. The forest, known as the Grandbois Lakes forest, is located near Sainte-Thècle, in the Mékinac Regional County Municipality, northeast of Shawinigan. Composed largely of red spruce trees, the ecosystem is considered one of the last intact forests of its kind in southern Quebec. Despite its ecological value, the Ministry of Natural Resources and Forests has approved the construction of a winter road through part of the forest — a step that could lead to logging in the coming months. The roadwork is slated to be carried out by the forestry company Forex Langlois. …Environmental groups and local residents gathered to oppose what they say is a threat to an irreplaceable ecosystem.
NEW YORK, NY – Mercer International announced that its subsidiary, Mercer Peace River Pulp (MPR), and Svante Technologies (Svante) have commenced operation of a previously announced carbon dioxide (CO₂) capture demonstration unit at the Mercer Peace River pulp mill in northern Alberta. The pilot project is designed to evaluate Svante’s solid sorbent carbon capture technology on biogenic CO₂ emissions from the mill’s recovery boiler flue gas. As a cost-efficient step, this stage builds on the previously announced Front-End Engineering and Design Phase 2. …“Commissioning this demonstration unit… allows us to evaluate carbon capture performance in our operating environment and gather practical data on what would be required for any future scale-up,” said Bill Adams. “The results from this on-site demonstration will help us evaluate the decarbonization potential of this technology for biogenic emissions and inform longer-term planning across our pulp operations.”
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