Kelly McCloskey
Robert McKellar
When we first reached out to political risk expert Robert McKellar in mid-2024, our goal was to spark a conversation the forest sector wasn’t yet having—about political risk and its growing influence on everything from trade policy to investment decisions. Robert’s op-ed in August, 2024 made the case that political risk is not just something that happens in volatile regions—it is the exposure of businesses to political forces, whether through government policies, trade dynamics, or geopolitical shifts. He identified major political forces impacting the Canadian forest sector—including the growing China-West rivalry and Canada-US trade friction—to help companies assess the relevance of political risk for themselves. In hindsight, his foresights were well placed.
After the election of President Trump and given how quickly the trade situation evolved, we reached out to Robert a few weeks ago to re-examine these dynamics. And given the complexities, we decided on a two-part approach. In Part I, in February 2025, Robert set the stage by looking at Trump’s leadership style and his approach to business, he outlined how forest product companies can assess and manage political risk, and then he focused on the most pressing risk to the sector—tariffs. The other risks—lumber duties, interference in Canadian-owned US-based industries, and the impact of US-China trade tensions on lumber sales—were left for Part II. In that this is a long read, in the “READ MORE document” are the following hyperlinked-titles—should you wish to proceed directly to a given section:
- Recap of Part I
- Is Trump toying with Canada or is there a plan?
- The latest on duties and tariffs
- Are Canadian US-subsidiaries at risk?
- US-China friction and lumber sales
- How to plan and manage for political risk
This isn’t a typical industry commentary. It’s not about what government should do, or where markets might go next. It’s about what companies can do now to better anticipate, adapt to, and, at times, even leverage political disruption. [full disclosure, Robert McKellar is Tree Frog co-editor Sandy McKellar’s brother]
US President Trump said, “If the European Union works with Canada in order to do economic harm to the USA, large scale tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had,” he said. On Wednesday, Trump unveiled a 25% tariff on imported vehicles, expanding a global trade war and prompting criticism and threats of retaliation from affected US allies. European Commission President Ursula von der Leyen described the move as “bad for businesses, worse for consumers,” while Prime Minister Mark Carney labeled the tariffs a “direct attack” on Canadian workers and said retaliatory measures were being considered. The new levies on cars and light trucks will take effect on April 3, the day after Trump plans to announce reciprocal tariffs aimed at the countries responsible for the bulk of the US trade deficit. 
Yesterday, we featured Part II of our in-depth Q&A with political risk expert Robert McKellar, a follow-up to an August 
As a federal election kicks off, the trade war with the US is casting a long shadow over voters’ choices, and whoever forms the next government will have the tall order of trying to draw this conflict to a close. …International trade experts say that will be much easier said than done. The two economies are more integrated than ever before, and President Donald Trump’s chaotic governing style makes it extremely difficult to know how to even begin to unravel this dispute. …Carney met with the country’s premiers and leaders from long-time allies in other countries to chart a short- and long-term response to the tariffs. He has conceded there’s a limit to how much Canada can do to respond. …Russell Williams at Memorial University said because Trump keeps threatening Canada’s existence, a political, rhetorical de-escalation is essential before any compromise on trade can be reached. 
US President Donald Trump’s coming wave of tariffs is poised to be more targeted than the barrage he has threatened, aides and allies said. …The White House is narrowing its approach to take effect on April 2, likely omitting a set of industry-specific tariffs while applying reciprocal levies on a targeted set of nations that account for the bulk of foreign trade with the US. …The White House is still planning to unveil the reciprocal -tariff action on that day, though. …The fate of the sectoral tariffs, as well as tariffs on Canada and Mexico that Trump said were justified by fentanyl, remains uncertain. …The administration is now focusing on applying tariffs to about 15% of nations with persistent trade imbalances with the US… such as Australia, Brazil, Canada, China, the European Union, India, Japan, South Korea, Mexico, Russia, and Vietnam.
COFI 2025 – April 2-4 in Prince George, BC — As BC’s forest sector grapples with significant turbulence – including US tariffs, geopolitical uncertainty, and sector-wide challenges in BC – strong leadership and collaboration are essential to securing a sustainable and competitive future. The “Calm, Cool, & Collaborative: Leadership for Turbulent Times” panel at the 2025 COFI Convention will bring together senior decision-makers from industry, government, and First Nations. These influential voices will share their insights on navigating market uncertainty, shaping effective policies, and strengthening community resilience. Jon our panelists: Hon. Ravi Parmar, Minister of Forests, Province of BC; Chief Councillor John Jack, Huu-ay-aht First Nations; Juan Carlos Bueno, President & CEO, Mercer International; and Lisa Dominato, Councillor, City of Vancouver for a lively discussion moderated by Greg Stewart, President, Sinclar Group Forest Products Ltd. & Chair, COFI Board of Directors. 
COFI 2025 Convention: April 2-4, Prince George, BC — The global trade landscape is evolving rapidly. Economic uncertainty, shifting regulations, and geopolitical challenges are reshaping market access for Canadian forest products. Staying competitive requires a clear understanding of emerging risks and strategic opportunities. At the COFI 2025 Convention, a panel of industry experts will examine the forces shaping international trade and explore actionable strategies to enhance industry resilience. Presenter and Moderator Russ Taylor, President, Russ Taylor Global will lead the discussion with panelists: Kate Lindsay, Senior VP & Chief Sustainability Officer, Forest Products 
The two BC regions that include resource-reliant communities like Smithers, Vanderhoof and Terrace stand to lose the most from tariffs, according to new research from the Institute for Research on Public Policy. …While BC stands to be the least affected province, tariffs are likely to cause the greatest disruptions in regions of Bulkley-Nechako and the Kitimat-Stikine. The first region depends heavily on forestry, while the second includes Rio Tinto’s aluminum smelter in Terrace. Counting existing countervailing duties, BC forest products could face tariffs exceeding 50 per cent, if not higher. …Almost three-in-10 workers in Bulkley-Nechako hold jobs in export-oriented industries with about 5.6% of the total work exposed to US tariffs. …Rounding out of the Top 5 are the Peace River and Cariboo (both 5.5%) and Kootenay-Boundary (5.4%). Regions potentially least affected by the tariffs include the Capital Region (1.5%), Squamish-Lillooet (1.4%) and the Central Coast (1.2%). Greater Vancouver’s exposure is 2.8% and the fast-growing Fraser Valley is 4%.
…Donald Trump is plunging North America into a trade war and clogging the flow of goods between Canada and the U.S. …Canada’s forestry industry is in the crosshairs, with a 25 per cent tariff on lumber and pulp and paper products. The likely result is higher prices on everything from the materials used to build homes to basic necessities like toilet paper. Quebec’s economy is deeply rooted in its forests… Toilet paper is a big part of that flow. Two years ago, Canada exported over $1.6 billion worth of TP, with the U.S. receiving almost all of it. …Even if American mills had the capacity to process more lumber, they’d still face a workforce problem. It’s ironic that the U.S. is penalizing Canada — a responsible steward of the trees — right after we delivered firefighters, equipment and water bombers to protect California’s trees. Canada offered its support to the U.S., but now we’re getting burned.
EAST HANTS, Nova Scotia — The Honourable Kody Blois, Minister of Agriculture and Agri-Food, announced federal funding for MTC Mass Timber Company (MTC) to support its move to technology-driven manufacturing that will create high-value mass timber products in Nova Scotia. Through an investment of $500,000, MTC will advance the detailed design of Canada’s first large-scale, clear-span mass timber manufacturing structure that would house a new industrial plant. Once constructed, MTC will be Canada’s first vertically integrated mass timber manufacturer in Atlantic Canada, allowing further growth of the region’s offsite building construction sector and improving access to housing for Nova Scotians. MTC was also conditionally approved for $10 million in federal support, subject to the required due diligence measures, and the negotiation of a final agreement.
OTTAWA — The Honourable Jonathan Wilkinson announced a $16.3 million investment over the next three years, starting in 2024–25, to support 25 projects through the Government of Canada’s Fighting and Managing Wildfires in a Changing Climate Program (FMWCC) – Training Fund. Through this investment, over 2,800 youth and community members in remote, rural and Indigenous communities across Canada will receive wildland firefighting training to enhance community capacity for responding to and managing wildfires. …Some of the projects funded through the FMWCC Training Fund include: $329,109 to the Keewaytinook Okimakanak’s project in Thunder Bay, Ontario… $499,330 to the Metis Settlements General Council’s project in Edmonton, Alberta… $946,330 to Prince Albert Development Corporation Management Co. Ltd.’s project in Prince Albert, Saskatchewan… and $1,999,999 to the Independent First Nations Alliance’s (IFNA) project in Sioux Lookout, Ontario.
A Canfor operation in Prince George and three area First Nations have received federal funding to boost innovation in forestry. The $293,500 in local funding is part of more than $20 million the Canadian government is investing in 67 projects province-wide. The funds are part of a broader effort to enhance the competitiveness and resiliency of Canada’s forest industry, which has faced increasing trade barriers, particularly from the US. Among the recipients is Canadian Forest Products, or Canfor, which will receive up to $121,500 for a project aimed at producing innovative, formaldehyde-free and isocyanate-free wood adhesives. The company will explore extracting kraft lignin from black liquor at its Northwood mill in Prince George, converting it into a new, sustainable bioproduct. The project aims to determine the commercial viability of this process, which could open up new revenue streams and reduce reliance on harmful chemicals.
At UBC’s Faculty of Forestry, we are shaping a sustainable, biodiverse, and inclusive future by advancing the stewardship of forests and the environment. The Faculty is Canada’s largest forestry school, welcoming over 1,600 students annually. Our innovative research, hands-on education, and community engagement are addressing some of the most pressing global challenges. This Giving Day, we’re proud to feature the 
THUNDER BAY — Three First Nations organizations in Northwestern Ontario are getting significant new funding to support the training of wildland firefighters. Some of the training will take place in Thunder bay. Keewaytinook Okimakanak, which represents six remote First Nations, will use $329,000 to to help train 25 youth in wildfire prevention and mitigation to build up local fire management practices and enhance community resiliency to forest fires. In Sioux Lookout, the Independent First Nations Alliance, which includes five First Nations, is getting $2 million to train 50 participants and increase the capacity for managing fires at the local level. The Whitefeather Community Resource Management Authority will use an allocation of just under $1.6 million for firefighter training for 144 community members on the Pikangikum First Nation.
Apologies are in order if anyone blamed it on the dog. The Kruger pulp mill on Mission Flats Road says it is responsible for what some might have noticed was a stronger than usual odour in the air in Kamloops late Friday afternoon. According to Kruger spokesperson Paule Veilleux-Turcotte, the smell was the result of a failure in the mill’s odour control equipment. “The plant halted its operations to repair the equipment, but, despite shutting down, some residual levels of the gases would still have been noticeable within the community,” Veilleux-Turcotte said in an email to Castanet Kamloops. “Despite the equipment issues, operations remained in compliance with the site permit for the duration of the event.” Veilleux-Turcotte said the issue was fixed by about 10 p.m. on Friday night, and, upon confirmation of the repairs, the mill resumed operations. [END]