Kelly McCloskey
Robert McKellar
Over the past two years, Tree Frog has periodically turned to political risk consultant Robert McKellar to help readers better understand the geopolitical forces increasingly shaping the business environment in which the North American forest sector operates. In his feature Trump’s Second Term and Political Risk in the Canadian Forest Sector, Robert explored how changing politics, government policy and international relations can create both risks and opportunities for forest companies. In doing so, he also introduced readers to the discipline of political risk management—a practical framework for anticipating and responding to an increasingly uncertain world.
Robert’s earlier articles generated thoughtful feedback and reinforced a common observation: the pace of global change is becoming increasingly difficult to follow. Every day seems to bring another headline about tariffs, trade disputes, wars, sanctions, shipping disruptions, energy prices, artificial intelligence, or some other geopolitical development. For many of us, the challenge is no longer keeping up with the news—it’s deciding what actually deserves our attention. Which developments are likely to influence markets, trade and investment in the forest sector? Which simply warrant monitoring? And which are little more than background noise? Those questions are central to political risk management. They are also questions we increasingly hear from readers trying to make sense of a relentless news cycle and what it means for their businesses and organizations.
In this article, Robert steps back from the daily headlines to explain how political risk professionals approach that challenge. His answer offers a practical framework for separating signal from noise—and a useful way of thinking about the global forces increasingly shaping the future of the forest sector.
Ontario Premier Doug Ford on Saturday blasted the criticism leveled at the Canadian government by the Trump administration and congressional Republicans over its handling of raging wildfires as “totally unacceptable.” “We’re trying to get through this,” Ford said, calling the rhetoric coming from some in the US “shameful.” President Trump threatened on Friday to impose additional tariffs on Canada over what he described as the government’s “willful negligence” and refusal to engage in “basic Forest Management”. The president said he planned to call Prime Minister Mark Carney to “find out what they are going to do” about the hundreds of wildfires raging across Canada. There were 955 active fires as of Saturday. Ford described current conditions as a “terrible scenario”. …Ford suggested those lawmakers have a “short, short memory,” noting how Canadian hydro-linemen and water bombers assisted in battling wildfires in California, Georgia and South Carolina last year.
US Ambassador to Canada Pete Hoekstra says President Trump‘s threat to impose new tariffs over smoke from Canadian wildfires should be taken seriously. Smoke from Canadian wildfires has blanketed several major American cities. “We are holding Canada responsible for the fact that they are not properly maintaining their Forests, and Brush therein,” Trump wrote on Truth Social. He said the wildfire smoke amounts to “Willful Negligence” and is “costing the US Billions of Dollars.” He added that the cost of the pollution “is incalculable” and should be “added to the tariffs Canada currently pays.” …Hoekstra would not say how large any potential tariffs could be or what legal mechanism the administration might use to impose them. But he said Canada could face consequences if the issue is not addressed. …The criticism comes despite the administration’s own moves to scale back US climate action.
PRINCE GEORGE, BC – The closure of Canfor’s Northwood pulp mill is putting renewed pressure on governments to support forestry workers in Prince George, with both union and political voices pointing to retirement bridging as one of the most urgent needs for workers facing job loss. The Northwood closure has left workers trying to understand what comes next, including when their jobs will end and whether there will be comparable work available in the region. Chuck LeBlanc, National President of PPWC, says many workers are still processing the announcement. …But finding similar work in Prince George could be difficult as there are fewer options left following years of mill closures and downsizing. …LeBlanc says one support that has been pushed before is bridging to retirement, a program that could help older workers leave the workforce with financial assistance while opening up jobs for others lower on the seniority list.
Alberta’s forestry sector enters a second half of 2026 with cautious optimism, even as weak housing markets supply, U.S. tariffs and softwood lumber duties continue to weigh on the industry. Ken Greenway, Alberta Forestry and Parks’ executive director of strategy, policy and economics, said northern Alberta’s timber industry remains relatively stable compared to some other parts of Canada, where forestry communities have faced sharper contractions. “We haven’t seen huge disruptions,” Greenway said. “Pulp is a weak market and that’s an area of concern, but softwood products prices are slowly moving to the positive side.” …“It’s a cyclical market, we’re at the bottom of a cycle at the moment. The current contraction across Canada – we have not seen as much in Alberta. We hope to withstand this storm.” The industry is also becoming more involved in wildfire mitigation.
The US will impose a 25% tariff on most imports from Brazil starting July 22, the U.S. Trade Representative’s office said on Wednesday — the first action under the Trump administration’s new tariff strategy that could eventually affect dozens of countries. …Wednesday’s announcement follows a proposal by the Trump administration in June to impose a punitive tariff of 25% on many imports from Brazil after deciding its practices were unfair on a range of issues from digital trade to illegal deforestation. The tariffs would apply to thousands of Brazilian imports, including sugar, agricultural machinery, apparel, electrical machinery, paper and steel. The U.S. said it would exempt all the products proposed for exemption in the June notice, except high-purity dissolving pulp and non-pharmaceutical applications of certain products. The exemptions include beef, coffee, rare earths, energy products, aircraft and aircraft parts.
A sweeping bipartisan housing affordability bill President Trump has refused — so far — to sign is set to become law on Friday, provided the president doesn’t act. The legislation, called the 21st Century ROAD to Housing Act, aims to improve housing affordability by incentivizing local governments to build more homes by streamlining complex environmental review processes, making it easier for credit unions and banks to issue mortgages, expanding access to modular homes, and restricting large corporate investors from purchasing single-family homes. Following months of negotiations, the bill passed Congress by wide margins in late June. …But even without Trump’s signature, the housing bill is on track to become law on Friday due to a quirk of constitutional law. …Trump could still veto the bill before Friday, although the final version passed Congress so overwhelmingly — 85-5 in the Senate and 358-32 in the House — that the legislative branch could potentially override his veto.
GERMANY — Mercer Torgau announced strategic actions at its Torgau facility in Germany including an expected overall workforce reduction of approximately 350 positions. …Mercer Torgau has been impacted by ongoing uncertainty in the global economy as well as heightened raw material and energy costs. …These strategic actions involve initiatives to streamline Mercer Torgau’s organization and processes, along with adjustments to its product portfolio. Among other things, Mercer Torgau’s production capacity and workforce structure will be realigned with market conditions. An initial reduction of approximately 100 contractor positions is expected in July 2026, and Mercer Torgau expects an overall workforce reduction of approximately 350 positions. Strategic actions have commenced and are expected to be completed in stages, completing in or about the second quarter of 2027. …Mercer Torgau manufacturing focuses on lumber for construction and packaging, pallets, planed wood products, wood pellets and briquettes.
The Canadian lumber industry saw enormous price spikes during the pandemic years of 2020-2022, with costs close to triple what they are today for some products. … “We saw prices skyrocket during COVID, but so too did the cost to operate,” said Aspen Dudzic, the Alberta Forest Products Assocation’s communications director. “And interestingly, post-COVID, we saw the market prices for lumber go down, but the costs to operate have not come down in the same way.” Even though lumber costs have seen a huge drop in prices in a vacuum, why haven’t these cost savings been passed on to the consumer? …“The supply chain is really complex,” Dudzic said. “Nothing we do operates in a vacuum, so there’s a lot of other compounding costs that we have to look at, like inflationary pressures, upticks in fuel and energy prices. …Top of mind is the ongoing trade war with the US.
US single-family homebuilding and permits for future construction fell in June, weighed down by higher mortgage rates and inventory of unsold new homes on the market. Single-family housing starts, which account for the bulk of homebuilding, slipped 0.2% to a seasonally adjusted annual rate of 895,000 units. Single-family homebuilding dropped 3.2% year-on-year in June. Permits for future construction of single-family homes dropped 2.4% last month to a rate of 871,000 units. They fell 0.2% year-on-year in June. The rate on the popular 30-year fixed-mortgage has increased by nearly 60 basis points since the US and Israel attacked Iran at the end of February. …Building permits for multi-family housing projects dropped 4.9% to a rate of 445,000 units last month. Overall building permits fell 3.0% to a rate of 1.367 million units. They declined 2.3% year-on-year in June.
State-level permitting activity continued to reflect a divided housing market through the first five months of 2026. Elevated mortgage rates and ongoing affordability challenges continued to weigh on single-family construction across much of the country, while multifamily permitting remained comparatively stronger, supported by gains in several regions despite continued weakness in parts of the South. Over the first five months of the year, the number of single-family permits issued nationwide reached 380,130. Compared with the same period in 2025, this represents a 6.1 percent decline compared with the May 2025 total of 404,977. In contrast, multifamily permitting activity remained stronger, with 208,192 permits issued nationwide, marking a 6.5 percent increase from the same period last year.
In the second quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 61, down one point compared to the previous quarter. The RMI has remained in the low 60s consistently over the past year. Even with this slight decline from the previous quarter, remodeler sentiment remains the standout sector within the housing industry, outperforming both its single-family and multifamily counterparts. …However, ongoing economic uncertainty and current cost pressures due to inflation are causing project delays, especially for larger ones. In the latest RMI survey, 74% of remodelers reported that their suppliers have increased prices of materials since March due to higher fuel costs, with the average increase in materials prices over that span being 6.7%.
Softwood markets across Latin America and the Asia-Pacific are approaching a turning point, according to the latest market report from Global Wood Trends and O’Kelly Acumen. The report says some of the world’s lowest-cost plantation producers are increasingly linked to major importing markets where domestic supply growth is limited. “With harvests expected to decline in key exporting regions, China remaining structurally dependent on imports, and Japan nearing peak production, the regional supply balance is likely to tighten through 2035 – creating new risks and opportunities for producers, investors, traders, and wood consumers,” it says. The ‘Global Softwood Roundwood Supply – Latin America & Asia-Pacific’ report… says Latin America, Asia, and Oceania. Latin America remain a highly competitive source of softwood roundwood. Brazil, Chile, Argentina, and Uruguay account for nearly all regional softwood supply, supported by large-scale plantation forestry and investment by integrated forest-product companies and institutional owners. 
SURREY, British Columbia — The Honourable Randeep Sarai, Secretary of State (International Development) announced over $8 million in RTRI funding for four Surrey businesses to help them diversify exports, grow locally, and compete globally – building prosperity for British Columbians and all Canadians. These investments support the Government of Canada’s measures to help businesses in sectors affected by global trade disruptions – such as forestry, manufacturing, and steel and aluminum – boost productivity, reduce costs, build more resilient supply chains, and reach new markets. … More details about these 
OTTAWA – The 2026 wildfire season has been manageable so far, largely because of significant amounts of rain across Western Canada, but federal officials cautioned Thursday the summer forecast is hotter and drier than normal in much of the country. … The southern Prairies and eastern Quebec have had more rain than usual this year, and it’s expected that above-average precipitation will continue in Alberta and the Northwest Territories. Forecasts for July and August are calling for higher than usual temperatures for Ontario, Quebec, northern parts of the Prairies and the territories. …The latest information from the Canadian Interagency Forest Fire Centre shows there have been 3,100 fires across the country so far this season, compared to around 2,900 at this time last year. …But the total area burned this year is less than last year, at around 12,000 square kilometres, down from 46,000 square kilometres.
British Columbia is expanding the BC Timber Sales Value-Added Manufacturing Program by creating a new dedicated category that will secure fibre for custom cutters and processors. BC’s action builds on Canada’s Forest Sector Transformation Task Force, which was commissioned in response to U.S. President Donald Trump’s new duties and tariffs on Canadian wood products. The task force recommends strong support for value-added operators so Canada can build high-quality products at home. “British Columbia’s path forward for forestry can’t just be providing dimensional lumber to Americans. We have to make more in B.C.,” said Ravi Parmar, Minister of Forests. …Custom cutters and processors are a group within the value-added wood-manufacturing sector without their own sawmilling facilities. …BC Wood Specialties Group Association’s chair, Kelly Marconi said “our custom cutting and processing members were part of the task force’s public consultation, so we are pleased to see this inclusive change.”
ALBERTA — Harvesting plans for forestry companies operating in the High Prairie and Slave Lake regions were presented June 17 at a joint open house in High Prairie. Plans were displayed by West Fraser Timber that operates High Prairie Forest Products, Tolko Industries, and by Millar Western Forest Products that bought the Slave Lake Pulp Mill from West Fraser and became the owner in April 2024. No representative was present from West Fraser. Companies hosted the event to allow citizens to comment on the proposed plans. Tolko plans to have operations in the Sweathouse area south of Snipe Lake, Salt Prairie and Whitemud, says woodlands supervisor Callie Skellett. …Millar Western plans to harvest trees in three areas, forestry superintendent Stuart Adkins says.
Two Western Washington tribes are suing the Trump administration to save endangered-species habitats nationwide. The lawsuit, filed in the US District Court in Seattle by the Swinomish Indian Tribal Community and the Squaxin Island Tribe, follows the Trump administration’s recent reinterpretation of the Endangered Species Act. The Interior Department and the Department of Commerce announced they were nixing the decades-old interpretation of the act: Damage to an endangered species’ habitat would no longer be viewed as “harm” to the species. The species act would only be used to prevent directly injuring or killing endangered wildlife. “It’s devastating because of the impacts on the ESA-listed Chinook salmon,” Swinomish tribal chair Steve Edwards said. …Noah Greenwald said companies would have little incentive to enter into or continue habitat conservation plans. …Nick Smith said the new rule could make projects like tree thinning in fire-prone forests easier to carry out.
CALIFORNIA — A bipartisan bill intended to protect people and forests from wildfires in the Shasta-Trinity and other national forests is dividing lawmakers and conservationists in Northern California and nationwide. Supporters of the Fix Our Forests Act say it speeds up the bureaucratic process for approving projects that reduce wildfire risk in national forests. These include control burn and vegetation removal projects. A chorus of conservationists opposed to the bill say they worry about uncontrolled logging in some of the country’s pristine forestlands. …According to the bill’s wording, it would limit how much environmental protection oversight projects that reduce vegetation would have to surmount before they’re approved. It also would limit legal challenges to those projects from community and environmental groups. The latter has been dividing lawmakers across both parties for more than a year.
To Caleb Chaplin, it’s clear what sets a patch of old forest on his family’s land in Naples apart from the woods around it. …Some of the trees are up to 200 years old. Foresters call these woods “late successional and old growth.” They’re also some of the rarest features on Maine’s landscape, trap lots of greenhouse gas and provide critical habitat for unique species. Chaplin said his family was planning to harvest the stand this year. …Then they learned the New England Forestry Foundation would pay them to delay harvesting. Chaplin said it was a tough decision at a time when these big trees are drawing some of the highest prices in the timber market. Ultimately, the family agreed to leave the stand alone for 10 years, and work with the foundation to develop a permanent conservation plan.
ITALY — The good news is that European forests continue to grow: according to the 2025–2026 Annual Report of the European Organisation of the Sawmill Industry (EOS), a body representing around 80 per cent of European sawn timber production, European forests now cover over 232 million hectares, equivalent to 35.4% of the continent’s land area, and over the last 35 years they have expanded by more than 23 million hectares, with an average increase of around 665,000 hectares each year. At the same time, Europe’s forest stock has reached 38.3 billion cubic metres, an increase of around 45% compared with 1990. Yet – and this is the less positive news – the availability of raw materials for the timber industry remains one of the main challenges to the sector’s competitiveness and to Europe’s sustainability objectives, as emerged from the Forestry-Timber General Assembly organised in Bologna by Filiera Legno (an association representing almost 600 companies in the timber industry). 
The long-anticipated El Niño is here. …In its monthly update in June, the US National Oceanic and Atmospheric Administration (NOAA), issued an El Niño advisory, confirming that the warmer conditions had developed in the specific part of the Pacific Ocean known as Niño 3.4. In order to be considered an El Niño, temperatures need to be 0.5 C above the average. Ocean temperatures are now close to 2 C above average. …The strongest El Niño in recent years was the one in 2015-2016, where the ocean temperature anomaly was roughly 2.75 C. ….Nat Johnson, a meteorologist at NOAA’s geophysical fluid dynamics laboratory, said the transition from a La Niña to El Niño has been very quick. …Meanwhile, in Canada, the effects will be seen in the winter months, bringing milder temperatures, but also drier conditions, something that is of great concern for wildfire development in the spring in Western Canada.
BC’s wildfire emissions in 2023 exceeded those of seven of the world’s ten largest national emitters. …At the same time, provincial policy has systematically reduced the managed forest harvest and shuttered 21 mills since 2023. …The policy of locking forests away from active management—while presented as environmental protection—is contributing to the very climate outcome it claims to prevent. Decadent, unmanaged stands are the fuel that feeds catastrophic wildfire. A well-managed, productive forest economy would reduce Canada’s climate impact more than any policy of exclusion. …The argument for locking forests away from harvest assumes that standing forests are always a carbon sink—absorbing more CO₂ than they release. This is true for young, actively growing forests. It is not true for old, decadent stands. …The solution is not less forestry. It is more forestry—done well, done sustainably, and done with the explicit goal of reducing Canada’s greenhouse gas emissions: uncontrolled wildfire in unmanaged forests.
IDAHO — On the afternoon of July 6, I looked toward the foothills from the Boise Bench and saw smoke. …With all the other fires burning in the West, wondered when our turn would come. Eighty-five percent of wildfires are human caused — and while the cause of the Claremont Fire has yet to be determined, it is certain that human activity played an important role. Science journalist and meteorologist Bob Henson writes that “extreme heat is among the most studied consequences of human-caused climate change, and the connections between a warming planet and amplified, localized extreme heat are not only intuitive but well-documented.” …Professor Friederlile Otto of Climate Science at Imperial College London writes, “we remain on a one-way trip towards a more dangerous future, and it’s time we hit the brakes… and implement solutions to protect our health and the health of the place we call home.”
Western Europe has been scorched by its hottest June on record, scientists have said, as the UK enters its third heatwave of the year and wildfires ravage France and Spain. Inflamed by carbon pollution, the deadly June heatwave helped push surface air temperatures for the region 3.06C above their average from recent decades. Globally, June 2026 was 0.56C hotter than the 1991-2020 average and 1.39C hotter than preindustrial levels, making it the second-warmest June on record, the agency found. …Western Europe is facing its third heatwave in six weeks and widespread dryness is helping small wildfires explode into unchecked blazes. Copernicus said the succession of heatwaves illustrated “the growing challenge” posed by worsening heat extremes. Raging infernos have laid waste to large areas of southern Europe in recent days, prompting the EU to scramble firefighters and water-bearing planes to help national services overwhelmed by simultaneous blazes. 
Thick, choking plumes of smoke from Canadian wildfires are pouring into major cities across the Great Lakes, Northeast and Mid-Atlantic, bringing dangerous air quality to more than 100 million people. The polluted air will last through at least Saturday in some areas as new waves of smoke waft south. …More than 100 million people in 18 states are under air quality alerts, many of which note that the air pollution is so high, even healthy adults will be affected. “The risk of health effects is increased for everyone,” the DC, air quality council said. …The smoke is being carried south from Canada in the wind. On Friday, the plume pushed farther south, making the DC area the new East Coast-epicenter of air pollution. Relief is coming as the wind pushes the smoke back into the Northeast and rain and storms are in the forecast
COLORADO — A pilot from Sooke on Vancouver Island was killed after the helicopter he was flying while battling wildfires in Colorado crashed into a reservoir. The aircraft reportedly went down in the Silver Jack Reservoir, shortly after 5 p.m. Sunday. The Gunnison County Sheriff’s Office says a dive team recovered the body of 56-year-old Nicholas Dale of Sooke, BC, from the submerged helicopter. The sheriff’s office says the helicopter was battling the 148-square-kilometre Gold Mountain wildfire when the crash occurred. It said the U.S. National Transportation Safety Board and Federal Aviation Administration are still investigating the incident. …The Associated Press reported that a procession of law enforcement vehicles carried Dale’s body to the city of Grand Junction, as residents turned out to express their gratitude to the fallen pilot and the thousands of firefighters still battling the blaze. …Dale was the fourth person killed in recent weeks while battling Colorado wildfires. 
