President-elect Donald Trump has justified his threat of 25% tariffs on Canada by pointing to the US trade deficit. Top Canadian economists have a response to that: it’s all because your country wants cheap oil. The US is on track to end 2024 with the largest overall trade deficit in its history. Its imbalance with Canada is about $60 billion. …Trump has repeatedly claimed the deficit is a subsidy to the Canadian economy, and said Tuesday the US doesn’t need anything from Canada. Import and export data, however, paint a different picture. Among the US’s top partners, its trade with Canada is the most equally balanced — because Canada buys $85 million from the US for every $100 million it exports. When stripping out oil and gas, the US actually has a significant trade surplus with Canada — its biggest energy supplier and a key buyer of American products from food to machinery.
“The Americans have had the better side of the deal because for more than a decade, they’ve been running surpluses on the non-energy side,” Stéfane Marion at National Bank of Canada, said. “Your deficit is with Canada on energy, but Canada allows you to have access to energy at a discount that you refine or transform to sell at a higher price to the rest of the world.” The US has been a net total energy exporter since 2019 as increases in domestic production lowered the need for imports. Still, it imports crude oil, petroleum products, natural gas and electricity from Canada. …“For the first time, the US is actually a net beneficiary when energy prices increase because they’re a net exporter,” Marion said. “Americans need to know the reason you have that is partly because of Canada.”
With President-elect Trump set to take over the Oval Office on January 20, the Canadian lumber industry looks to be taking action… advising customers that they will add 25% to lumber exports to the US when the tariff is announced. With Canadian mills already paying an average of 14.4% import duties on US shipments, they have no alternative but to increase prices by the 25% to cover the potential tariff. Nic Wilson, CEO of the Denver Mass Timber Group Summit reports that… “
Nicolas Schmitt, an economics professor at SFU, highlighted that the province’s economy has shifted from a goods-based to a service-driven model. He said this transition has made the economy more diversified and resilient. With key regions like Vancouver and the Okanagan Valley showing strong growth in service sectors, B.C. is well-positioned to withstand global economic uncertainties and to continue thriving. “This war might affect more interior B.C. than urban B.C. That is a potential problem for the interior. Where those lumber mines and all those goods are being exported. So that creates an urban rural divide.” In a statement provided by Kurt Niquidet president of the B.C. Lumber Trade Council, he said federal parties must collaborate to tackle the ongoing softwood lumber duties and the potential imposition of further tariffs. …While B.C.’s diversified economy offers resilience, the potential impacts on industries like lumber, especially in rural areas, require attention. 
Advisors on Trump’s incoming economic team are considering a gradual implementation of tariffs, increasing them incrementally each month. This approach is intended to strengthen their negotiating position while minimizing the risk of sudden inflation, according to sources familiar with the discussions. One concept involves a plan to raise tariffs by 2% to 5% per month, using executive powers granted under the International Emergency Economic Powers Act. The idea is still in its early stages and has not yet been formally presented to Trump, indicating that the strategy is in the initial phase of consideration. Trump has not yet approved of the plan. Supporters include Trump advisors Bessent, Haslett and Miran. [to access the full story a Bloomberg subscription is required]
Lumber prices surged to around $580 per thousand board feet in January, marking a six-week high, as uncertainty surrounding potential tariffs on Canadian softwood lumber imports to the U.S. stoked panic buying. The looming 25% tariff proposed by President-elect Trump has prompted U.S. buyers to rapidly secure inventories ahead of anticipated price hikes, further escalating demand. With Canadian lumber already subject to an average 14.4% import duty, the additional tariff is expected to push prices even higher. U.S. reliance on Canadian softwood lumber remains substantial, as Canada supplies a significant portion of the country’s lumber needs. While alternative suppliers, such as Germany and Sweden, may partially fill the gap, they lack the capacity to match Canada’s production in the long run. Meanwhile, domestic challenges, including workforce shortages and sawmill closures, are limiting U.S. production, contributing to ongoing supply constraints. [END]
The mere threat of tariffs being tacked onto Canadian lumber imports in the U.S. is raising fears of panic buying that could roil lumber markets and prices. “A number of Canadian lumber companies are now advising customers that they will add 25% to lumber exports to the U.S. when the tariff is announced,” 
A potential hike in tariffs imposed on Canadian exports to the US as early as January will highlight developments that could define first-quarter trends in the softwood lumber market. …Many traders have expressed a perception that the US economy will prosper in 2025 with a more business friendly administration in the White House. However, if the tariffs are imposed, they could significantly alter the flow of softwood lumber and panels from Canada to the US. Some Canadian producers have already noted that they will withdraw from the US market rather than deal with the rising costs. If returns on shipments to the US plunge, many Canadian mills could funnel a larger percentage of production offshore, especially to Pacific Rim destinations. …Southern Pine traders hope the first quarter sets the stage for a rebound after a difficult year in 2024. Production outpaced demand for most of the year, sustaining steady downward pressure on prices.
The NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 68 for the fourth quarter of 2024, up five points compared to the previous quarter. Remodelers are more optimistic about the market than they were earlier in the year, corroborated by NAHB’s recent analysis of home improvement loan applications. Demand in many parts of the country was stronger than usual for the fall season, especially demand for larger projects, with leads coming in after the uncertainty about the November elections was removed. …The Current Conditions Index averaged 75, increasing three points from the previous quarter. All three components remained well above 50 in positive territory: large remodeling projects rose eight points to 75, moderate remodeling projects increased two points to 73, and small remodeling projects inched down one point to 76. …The Future Indicators Index was 61, up six points from the previous quarter. 
A report released by the Commerce Department on Friday showed new residential construction in the U.S. surged by much more than anticipated in the month of December. The Commerce Department said housing starts soared by 15.8 percent to an annual rate of 1.499 million in December after tumbling by 3.7 percent to a revised rate of 1.294 million in November. …The spike by housing starts came amid a substantial rebound by multi-family starts, which skyrocketed by 61.5 percent to an annual rate of 449,000 in December after plummeting by 30.7 percent to an annual rate of 278,000 in November. Single-family starts also shot up by 3.3 percent to an annual rate of 1.050 million in December after surging by 7.7 percent to an annual rate of 1.016 million in November. Meanwhile, the report said building permits slid by 0.7 percent to an annual rate of 1.483 million in December after surging by 5.2 percent to a revised rate of 1.493 million in November.
As we close the 2024 chapter, we wanted to share a recap of the top stories from the SLB last year. As we continue to work towards our mission to make softwood lumber the building material of choice in the United States, we reflect on the impact the SLB and its funded programs made last year. 
The massive fire that began in Pacific Palisades on January 7 has kept the city on edge ever since, with multiple other outbreaks flaring up around L.A. in the following days. While many have been contained or extinguished, the devastation left in the fire’s wake is astonishing, with homes reduced to ashes. In light of this reality, one question remains: why is wood the primary choice for construction in an area so prone to wildfires? The U.S. is rich in forests making wood a readily available material. [Wood is] more affordable, with lower prices than other materials like steel or concrete. …The tradition of building with wood in the United States dates back to the arrival of European settlers… Wood allows for faster construction, making it an attractive choice for building homes. …However, the increasing frequency and intensity of wildfires may serve as a wake-up call, prompting a shift to fireproof materials like concrete.
As wildfires continue to burn out of control across Los Angeles, questions have turned to why and how California authorities allowed the perfect conditions — extremely dry, uncleared forests, hillsides and brush — to proliferate during an already dangerous fire season made worse by a Santa Ana wind event that hits the area with relative frequency. Well before those dangerous conditions sparked the massive blazes… this week, the region was already a tinderbox due, in part, to a lack of prescribed fires. …The reason California hasn’t conducted more controlled burnings comes down to existing environmental laws in the U.S. that have posed bureaucratic obstacles to prescribed fires. It often takes years for proposals to go through reviews before any controlled burning can take place. …Lawmakers have introduced legislation that would allow for more controlled burning, but because no laws have been passed, environmental red tape has continued to present challenges to proactive fire management.
PORT ANGELES — The committee of commissioners representing five encumbered counties, including Clallam and Jefferson, have arrived at a recommendation for how timber revenue from replacement lands should be distributed between the counties. The ratio agreed upon by the committee, known as the impact share method, will distribute funds based on how many encumbered acres each county has when compared to the total number of acres encumbered between the five counties. The Washington State Association of Counties (WSAC) will vote on the recommendation at its Feb. 5 meeting, Clallam County Commissioner Mark Ozias said. Encumbered counties are those which have substantial portions of their state trust land set aside for protection of endangered species such as marbled murrelets and northern spotted owls.
The impact of a changing climate is evident in the bigger picture for the state. California has experienced a decades-long drought that ended just two years ago. The resulting wet conditions since then have seen the rapid growth of shrubs and trees, the perfect fuel for fires. However last summer was very hot and was followed by dry autumn and winter season – downtown Los Angeles has only received 0.16 inches of rain since October, more than 4 inches below average. Researchers believe that a warming world is increasing the conditions that are conducive to wildland fire, including low relative humidity. These “fire weather” days are increasing in many parts of the world, with climate change making these conditions more severe and the fire season lasting longer in many parts of the world, scientists have shown.
USA BioEnergy (USABE) announced it has closed on the acquisition of 1,600+ acres of land in East Texas for its new $2.8-B advanced biorefinery, designed to convert wood waste into sustainable, net-zero aviation fuel (SAF). The landmark SAF facility already secured a 20-year offtake agreement with Southwest Airlines and is at the forefront of advancing ultra-low-carbon fuel, which is much needed in the future of aviation… Once blended with conventional jet fuel, the SAF could produce the equivalent of 2.59 billion gallons of net-zero fuel and avoid 30 million metric tons of CO2 over the offtake agreement term. According to USABE calculations this will enable approximately 112,000 short (less than three hours) or 7,000 long haul (more than 10 hours) net-zero airline flights per year.
Firefighters in southern California are battling the Palisades and Eaton Fires. …Residents of many fire-prone areas have grown familiar with the orange, apocalyptic haze of wildfire smoke as these blazes have become more common because of climate change. Such smoke can contain an unpredictable cocktail of chemicals associated with heart and lung diseases and even cancer, which is the leading cause of death among firefighters. Here’s what makes wildfire smoke so dangerous. When trees, shrubbery and other organic matter burn, they release carbon dioxide, water, heat—and, depending on the available fuel, various volatile compounds, gaseous pollutants and particulate matter. Those tiny particles, which become suspended in the air, can include soot (black carbon), metals, dust, and more. If they’re smaller than 2.5 microns in diameter, they can evade our body’s natural defenses when inhaled, penetrating deep into the lungs and triggering a wide variety of health problems.
Alberta will join other Canadian provinces helping battle raging wildfires in Los Angeles, the largest in the California city’s history. The province announced Thursday it’s preparing to deploy an incident command team and additional wildfire-fighting resources to support California, including water bombers and night-vision helicopters. Thousands of firefighters have been battling roaring flames that have left neighbourhoods in ruin and burned thousands of structures, while killing at least five people. “Good neighbours are always there for each other in times of need, and we will assist our American friends in any way they need during this crisis,” Premier Danielle Smith wrote on X. …In fighting the Palisades fire, the Los Angeles water system “buckled” under the demand, as some hydrants ran dry, hindering firefighting efforts. According to the Los Angeles Times, more than 2,000 structures have burned and at least 130,000 residents are under evacuation orders due to the wildfires.
PACIFIC PALISADES, California − Firefighters were progressing in their battle against two massive wildfires as winds eased early Thursday, bringing a respite to frustrated and beleaguered residents across Los Angeles County who have been on edge for over a week. All “particularly dangerous situation” red flag warnings largely expired by Wednesday night without causing any significant fire growth, according to the National Weather Service. But dry conditions and locally gusty winds were forecast to linger into Thursday − particularly in the mountains, the weather service warned. According to the weather services, temperatures were also expected to drop five to 10 degrees below normal for the remainder of the week, and Friday is predicted to be the coldest. “Good news,” the weather service’s Los Angeles office said. “Bad News: Next week is a concern. While confident that we will NOT see a repeat of last week, dangerous fire weather conditions are expected.”
Foreboding weather forecasts keep tensions high in Los Angeles as one of North America’s largest cities battles wildfires that have already claimed at least two dozen lives and thousands of homes. Here are some data points that put into context the peril the city is in. The most destructive fires in California history — and how they compare to Canada’s largest wildfire: Palisades and Eaton fires are already among the most destructive in California’s history, scorching more than 10,000 structures in just a matter of days. With persistent winds in the forecast, those numbers could climb even higher. For context, Canada’s most devastating wildfire — in Fort McMurray, Alta., in 2016—destroyed an estimated 2,400 structures.
Fires burning homes and businesses in Los Angeles for a week have killed at least 24 people, displaced thousands of others and destroyed more than 12,000 buildings in what might be the most expensive conflagrations in the nation’s history. The blazes started Jan. 7, fueled by fierce Santa Ana winds that have posed problems for the large forces of firefighters deployed across several areas of the sprawling city. Cal Fire reported that the Palisades, Eaton, Kenneth and Hurst fires have consumed about 63 square miles (163 square kilometers). Investigators are still trying to determine what sparked the fires. They could be the nation’s costliest ever.