Kevin Mason
The incoming U.S. administration has highlighted that it will impose tariffs on friends and foes alike. The application and size of any potential tariffs are unknown, leaving countries and companies guessing about how to position themselves. First-order impacts will be greatest on partners with few alternatives (i.e., Canadian lumber production). Second-order effects are always harder to forecast, but, if Asian paper imports turn away from the U.S., they are likely to flood Europe and/or traditional U.S. export markets. Retaliatory tariffs are to be expected, with the greatest risks to products dependent on export markets, including fluff, dissolving pulp and pellets.
Leaving aside the inevitable unknown unknowns, there are several known economic drivers in the year ahead. Interest rates are expected to decline in 2025, although expectations for the pace of declines keeps changing. Lower rates should increase U.S. housing activity, and even a small increase in activity should have an outsized impact on solid wood and housing markets (as labour allows). The U.S. dollar is expected to strengthen, putting downward pressure on commodities. The U.S. is expected to impose steep tariffs on imports—particularly those coming from China, but also from other countries. This will reshape trade flows over the next few years and should boost domestic manufacturing (although the last go-around showed little benefit). The Chinese real estate conundrum is too deep to be solved in 2025 and will continue to be a drag on confidence, consumption and credit within China and beyond its borders.
As most may have heard by now, Premier Eby has announced an agreement in principle between the BC NDP and Greens. …Of key significance to the forest sector, the agreement commits “to undertake a review of BC forests with First Nations, workers, unions, business and community to address concerns about sustainability, jobs, environmental protection and the future of the industry.” Such broad encompassing reviews typically take several months, if not over a year to complete and even longer before acting on recommendations. To propose such a review now is a prime example of just how forestry in British Columbia has truly become all about politics and not common sense. The two parties in their wisdom, have agreed to a review while the BC forest industry is literally in its death throes.
NEW YORK — The U.S. increasingly relies on Canadian crude oil to meet domestic demand and that relationship faces potential strain amid the threat of tariffs from President-elect Trump. More than 50% of crude oil imported to the U.S. comes from Canada, up from 33% in 2013. The increase follows a jump in production from Canada’s western provinces and growing pipeline capacity to its southern neighbor. Trump has threatened blanket tariffs of up to 25% on products from both Canada and Mexico. That has raised concerns about higher energy costs trickling through the entire U.S. economy. “All three countries remain heavily reliant on each other economically, and hefty taxes on key U.S. imports like crude oil or softwood lumber risk exacerbating U.S. consumer inflation,” said the Americas for UBS Financial Services. …Canada, with its proximity to the U.S., is also the nation’s biggest trading partner. 
The B.C. government has appointed a new chair and three new directors to the BC Hydro board of directors. …Glen Clark has been appointed the new chair of the BC Hydro board of directors. Clark will take over the post from current chair, Lori Wanamaker, whose term will end on Dec. 31, 2024. …Merran Smith is president of New Economy Canada and brings award-winning leadership uniting industry, government and civil-society partners. …Brynn Bourke is executive director of the BC Building Trades (BCBT). …Don Kayne is president and CEO of Canfor Corporation, and former CEO of Canfor Pulp Products Inc. Kayne has deep experience in international sales and marketing, human resources and executive compensation through 45 years with the forest company. 
The monitor for the San Group of companies has been granted broader powers by the Supreme Court of B.C. to manage and make decisions about the financially troubled forestry company, which has operations in Port Alberni. The San Group’s protection from creditors was extended at a court hearing in Vancouver on Thursday. The next hearing is set for Jan. 16. Expanded powers granted to Deloitte include the ability to administer the company’s restructuring and any winding down of the business, plus liquidating property and disposing of assets. The monitor is permitted to continue running the business, and said it anticipates working with current management. The various parties are expected to be back in court to ask for approval for a sale and investment solicitation process. …The court agreed the company can increase its borrowing limit to $1 million — up by $400,000 — to keep operations going.
Donald Trump talked about using tariffs as a means to increase American manufacturing. …One important economic aspect surrounding these tariffs centers on their potential impact on the housing market in 2025. …The good news for the upcoming year’s outlook on housing is that the overwhelming majority of such sourced building materials are not imported. Instead, housing market experts suggest that interest rates and bottlenecks in existing supply chains are the real threats to the market worth watching. …The biggest potential tariff expense impacting home builders would come from enacting such a cost on Canadian lumber. Market observers remain skeptical that the President-elect would really enact the tariff on close ally Canada’s raw materials. The real threat to the housing market in 2025 comes not from potential tariffs, but instead from high interest rates and lingering bottlenecks in supply chains, according to Stephen Haines of Artisan Built Communities.
Lumber prices have rebounded to around $560 per thousand board feet, up from a seven-week low of $531 on December 16th, driven by strong demand and supply constraints. U.S. existing home sales rose by 4.8% in November, the highest in eight months, reflecting growing momentum in the housing market, with more buyers entering as job growth continues, housing inventory rises, and consumers adjust to mortgage rates between 6% and 7%. Additionally, building permits surged by 6.1% in November, the highest level since February 2024, signaling strong future construction activity. On the supply side, production cuts and mill closures are restricting lumber availability as Western Forest Products reduced output by 30 million board feet, and Canfor Corp. shut two mills, cutting annual production by 670 million board feet. These supply limitations, coupled with U.S. tariffs on Canadian softwood lumber and rising import tariffs amid the China trade dispute, are pushing prices higher. [END]
BOSTON — Placing tariffs on Canadian products entering the U.S. would be “devastating” to the New England economy, Gov. Maura Healey said during an interview with the Herald this month. …Massachusetts relies heavily on Canadian lumber for building homes, and another Trump pledge to enact an additional 10% tariff on Chinese products would stymie local efforts to spur the energy and advanced manufacturing industries, Healey said. “Where does our lumber come from? A lot of it from Canada. So this really hurts. And it’s not just Canada. Look at China. We’re trying to lean hard into technology, applied AI in the state,” Healey said. “There are a lot of component parts that, sure, we want one day to be made here in America but right now they’re made overseas. So tariffs would really hurt our state.” “It would be devastating for the New England economy if President Trump imposes tariffs,” the governor added.
New actions are being implemented to help more people find affordable homes in the communities where they live and work. …Starting Jan. 1, 2025, the B.C. home-flipping tax will be in place to discourage investors from buying housing to turn a quick profit. People who sell their home within two years of buying will be subject to the tax, unless they qualify for an exemption, such as divorce, job loss or change in household membership. It is expected approximately 4,000 properties will be subject to the tax in 2025. All revenue from the tax will go directly into strengthening housing programs and building new affordable homes in B.C. …Other measures to help make homeownership more accessible and improve the supply of housing, which came into effect April 1, 2024, are new thresholds for the first-time homebuyers’ program and the newly built home exemption.
Toilet paper and biomass pellets are emblematic of the fight to save northern forests – and prevent some the planet’s more important biodiversity from going down the toilet (or up in smoke). While much of the focus on deforestation is on the world’s tropical forests, the degradation of boreal and temperate forests continues apace, threatening their ability to store carbon and destroying ecosystems.
For several years, McMillan LLP has been a go-to law firm for the Paper Excellence corporation. This large Canadian forestry company has been represented by McMillan on transactions worth over $6 billion. The ethical problem arose when McMillan took on a new retainer, for the Forest Stewardship Council (FSC). That client’s main work is administering the “FSC” certification, which you may have seen stamped on some wood products… One of FSC’s rules is that, in order to remain certified, a company must not only avoid destructive forest practices, but must also not be “indirectly involved” with companies that do so… In November 2023, Greenpeace alleged that Paper Excellence was effectively a corporate sibling of Asia Pulp & Paper, insofar as both were controlled by Indonesian forestry company Sinar Mas. That allegation was contested by Paper Excellence, and so the FSC sought corporate law expertise to conduct a review. The firm that FSC hired was none other than McMillan LLP.
The consulting company that recommended the removal of thousands of trees from Stanley Park is sharing its perspective on a project that’s spurred considerable local controversy. The Vancouver Park Board began removing trees from the park after it revealed in November 2023 that up to 160,000 of them had been killed by a hemlock looper moth infestation and had become unsafe. The report that led to the removal was authored by B.A. Blackwell and Associates, which also worked to restore the Stanley Park forest after a damaging windstorm in 2006. “I felt this was an opportunity to provide an education moment because there’s a lot to learn about this issue, it’s complicated,” Bruce Blackwell, the company’s principal, told Global News during a tour of the affected areas of the park on Thursday. Blackwell was emphatic that the only purpose of the tree removal in the park is public safety.
Walking through the clear-cuts north of Lund, I’ve noticed they’re not terrible by typical standards … the real problem lies in what comes next: replanting. Replanted areas aren’t forests; they’re fiber-farms—dense monocultures devoid of biodiversity. There are no birds, deer, or diverse plant life, just crowded trees competing for scarce nutrients. If we had to live off these lands, we’d starve. Replanting is a public relations greenwash, creating biological deserts instead of ecosystems. Naturally regenerating forests, by contrast, begins with nitrogen-fixing alders, enriched soils and balanced biodiversity. …Yet British Columbia clings to outdated forestry models focused on short-term profit. …Why not replant one clear-cut while letting others regenerate naturally? We could compare outcomes and learn something valuable. …We could listen to professional foresters and scientists rather than corporate lobbyists. BC could lead the world in forestry innovation, but only if we upgrade our economic belief systems. 
For the first time since the pandemic, Canada had a year-over-year decline in its greenhouse gas emissions — though it is still a long way off its 2030 target. A preliminary 
While details are minimal to this point, the BC Forest Safety Council is reporting a logging truck driver was killed outside of Logan Lake sometime Monday. According to the Safety Council’s bulletin issued Wednesday, the person was killed December 16th while attempting to “tow a log truck that had spun out on an icy road.” The details on a specific location, as well as the circumstances surrounding the person’s death, have not been detailed. …A separate bulletin issued by the BC Forest Safety Council this week also highlights the dangers that forestry workers face while on the front-lines of felling operations. It points to two separate, non-fatal incidents involving heavy machinery being used in different operations in the Southern Interior this fall, including one near Scotch Creek in the Shuswap. Both involve harvesting in steep-sloped areas.
