President Donald Trump’s escalating trade fight with Canada is squeezing the economy north of the border, threatening jobs and adding to families’ financial strain as steep U.S. tariffs on roughly $20 billion in goods remain in place. U.S. tariffs have hammered the country’s steel, aluminum, lumber and automobile producers that depend heavily on the American market. Steel exports have fallen by roughly half since the tariffs took effect, while lumber exports were about 20% below 2024 levels earlier this year. Production and jobs have also declined in some of the hardest-hit industries. Canadian families are feeling the squeeze, too. Consumer prices were 3% higher in August than a year earlier, with grocery prices up 2.8% and transportation costs jumping 7.5%, according to the government’s own data. …Scott Lincicome, at the Cato Institute said free trade in products including fertilizer, energy and lumber helps keep costs down for American farmers, homebuilders and consumers.
The Bank of Canada has not raised interest rates since July 2023. And while an eighth-consecutive hold is widely predicted next week, a growing number of economists and traders are now expecting the central bank to hike its trend-setting rate to tamp down stubborn inflation. Mortgage and debt experts say higher rates would have significant impacts on Canada’s sagging real estate market. Payments on variable-rate mortgages would rise immediately, along with rates for new fixed mortgages. Home prices could dip lower. …The volume of home sales nationwide is currently at a 25-year low, says Ben Rabidoux of Ontario-based Edge Realty Analytics. He describes confidence among buyers today as “unbelievably weak across the country,” owing to a slew of economic uncertainties ranging from the Canada-U.S. trade war to the impact of AI on jobs.
Lumber futures fell below $527 per thousand board feet, retreating toward a two-year low amid persistent weakness in the US housing market. Homebuilder confidence has fallen to its lowest level in 14 years, as high mortgage rates, labor shortages and high construction costs continue to weigh on the sector. Mortgage rates have climbed to 7.4%, their highest level in three years, raising borrowing costs, dampening housing demand and weighing on prices. On the other hand, trade tensions with Canada continue to constrain lumber availability and pressuring prices. Although the US Department of Commerce lowered antidumping and countervailing duties on Canadian softwood lumber to 24.75% from 35.16%, a separate 10% US tariff brings total duties to 34.75%, limiting the potential for a supply recovery.
Canada’s annual inflation rate rose to 3.1% in September, data showed on Monday, as higher gasoline and diesel prices pushed the consumer price index above the Bank of Canada’s upper limit once again after three months. Analysts polled by Reuters had forecast inflation of 3.2% in September, up from 3% in August. The September inflation figure is the last CPI data before the BoC’s monetary policy decision later this month. On a month-on-month basis, CPI rose by 0.1% in September from a drop of 0.1% in August, Statistics Canada said. BoC Governor Tiff Macklem has said that new forecasts that will be released alongside the rates decision will show higher inflation in Canada. The higher CPI was largely driven by a 19% rise in energy prices on an annual basis, following a 15.4% rise in August. 
Tariffs and the trade war with Canada are hurting United States businesses, according to the latest U.S. Federal Reserve‘s Beige Book released. “Most of the trade tensions are mentioned in terms of the negative effect on manufacturing,” Robert Embree said of the U.S. economic survey. “We see that in New York. We see that in Boston. We see that in Minneapolis. They’re all reporting adverse effects from tariffs or trade conflicts with Canada.” Issues arising from damaged cross-border trade with Canada came up in reports from several Fed banks, including those in New York, Minneapolis, Boston and San Francisco. For example, “a number of manufacturing contacts reported that tariffs were raising input costs, disrupting supply chains and damaging cross-border trade, particularly with Canada,” the Federal Reserve of New York’s portion of the report said. As a result, businesses said they were delaying capital spending and their planning had become more complex.
U.S. tariffs could leave more Canadian lumber available for domestic construction, potentially supporting nearly 4,000 additional homes a year and lowering building costs, according to Canada Mortgage and Housing Corporation. CMHC 
Lumber futures rose to $540 per thousand board feet, their highest level in nearly a month, as Hurricane Isaias threatened supplies across key producing regions. The storm swept through the US Gulf Coast, causing major power outages in Alabama and Mississippi, both significant lumber-producing states, raising concerns over supply disruptions and pressuring prices. Lumber supplies were already constrained by escalating trade tensions between the US and Canada. …However, gains remain tempered by weakness in the US housing market. Mortgage rates have climbed to 7.4%, their highest in nearly three years, raising borrowing costs for homebuyers and weighing on housing demand.
The Canadian economy proved more resilient than feared earlier this year. Now, while many hope domestic infrastructure and investment projects will help the economy grow and boost its export diversification, the country is likely facing a period of slower growth in the short term. That’s why Deloitte Canada recently raised its forecast for this year but cut next year’s growth forecast from 2 to 1.6 per cent, a figure that accounts for Canada’s retaliatory tariffs but not the Sept. 15 expansion or the Sept. 29 import bans. To better understand where the economy has proven most resilient, and where future challenges lie, National Post reached out to Deloitte Canada’s Chief Economist Dawn Desjardins for some insights. ….What has kept Canada’s economy afloat so far, and why do you expect that resilience to weaken? …Dawn Desjardins: But for 2027, all the events of recent weeks and months certainly suggest that it’s having an impact on Canadian business confidence, Canadian consumer confidence. [A National Post subscription may be required for full access to this story]
Canada lost 68,000 jobs in September, according to Statistics Canada, marking a second straight month of losses. The unemployment rate ticked up by 0.1 percentage points to 6.5 per cent, which is where it stood at the start of 2026. Economists polled ahead of the release had predicted employers added 9,200 positions in September. The decline follows 42,000 job losses in August, which came as a surprise to economists and snapped a hot streak for the labour market. …Statistics Canada says job losses were split between full- and part-time work and were concentrated in the public sector. The decline was concentrated in youth aged 15 to 24, who accounted for 48,000 job losses, according to the data agency. But the pool of young workers also shrank in September, leaving the unemployment rate for that group relatively unchanged at 13 per cent.
In August, the U.S. trade deficit hit a seasonally adjusted $106 billion, the highest total since President Trump announced his sweeping tariff regime. Since those tariffs, the trade deficit has stayed around normal levels. …President Trump imposed the tariffs, in his own words, to close a trade deficit which he deemed a “national emergency.” …All of this was complete nonsense. …First, the nation does not lose money when it imports more goods and services than it exports. …Second, the nation isn’t even sending more dollars abroad than it receives when you zoom out beyond mere imports and exports. Foreigners typically want to do something more with the dollars they get. So virtually every dollar sent abroad returns to America in one form or another. Through our trade deficit, we receive many more tangible goods of value than we have to give up in return because the U.S. economy is exceptionally attractive.
The Carney government says it wants housing starts in Canada to double to 500,000 per year within the next several years. …At first glance, it’s an odd goal for the government to embrace. More than four-fifths of the existing residential housing stock in Canada consists of “market housing” — units constructed by developers and homebuilders guided by market-based signals. These signals include housing demand and business objectives such as making a profit, keeping the firm’s workers employed, etc. Ottawa’s direct role in building the country’s housing stock has been minor. …If markets operate well, the supply of housing will adjust in the face of trends in demand. Unfortunately, the homebuilding industry is subject to a heavy dose of regulation — mainly by municipalities and the provinces — and must grapple with a plethora of taxes and fees that drive up construction costs. 
Lumber futures fell to $527 per thousand board feet, reaching their lowest level in two years, as rising borrowing costs weighed on housing demand. Growing concerns over inflationary pressures and government debt have strengthened expectations of higher-for-longer interest rates and fueled a broader sell-off in the bond market, pushing sovereign yields to their highest levels in over two decades. As a result, mortgage rates climbed to 7.3%, their highest level in three years, further straining an already weak housing market. Although lacking any particular economic significance, economists refer to the 7% threshold as a psychological ceiling.
Lumber futures fell to around $530 per thousand board feet, remaining near their lowest level in nine months, as rising borrowing costs weigh on housing demand. Growing concerns over inflationary pressures have fueled a broader selloff in global government debt markets, pushing yields to their highest level in nearly two decades. As a result, mortgage rates climbed above 7%, a level last seen in January 2025, further weighing on prospective homebuyers. Although lacking any particular economic significance, economists refer to the threshold as a psychological ceiling. Meanwhile, lumber-intensive single-family housing starts increased 7.6% in August. Providing an offsetting pressure, Ottawa had announced counter-tariffs of 25% on US lumber and 50% on plywood following US tariffs on several lumber-related goods.
Time after time, week after week, there is yet another story lamenting Canada’s continued reliance on its resource economy. Wood, minerals, oil, gas and more are written or spoken of as antiquated, crumbling foundations of an economy that must supposedly grow up and embrace the world of tech and renewable energy. In June 2026, Canadian merchandise exports reached a record $78 billion, while imports totalled $73.8 billion, producing a $4.2-billion trade surplus. Why? Because Canada’s natural resource economy has proven once again that it can generate enough export earnings to offset deficits elsewhere in merchandise trade, supporting national income and domestic production. According to Statistics Canada’s merchandise data, five resource and resource-based product categories stand out. …Combined, they accounted for $46.2 billion in exports, while accounting for just $18.9 billion in imports, for a surplus of around $27.4 billion. Compare that with every other merchandise category in Canada, which ran a combined deficit of roughly $23.2 billion.
Much of the current discussion about BC exports understandably focuses on tariffs and the evolving trade relationship with the US. …A complete picture of what the province sells to earn its way in the world must include services. They generate roughly 40% of the province’s international export earnings. …The shift toward services has been underway for decades, supported by steady growth in gateway transportation and the rapid expansion in technology and professional services. …BC’s export mix has become more diversified partly because services have performed well, but also because merchandise exports have struggled. …The largest contributor to the decline in BC’s real merchandise exports is softwood lumber and other forestry-related exports, which have plunged since 2017. That decline reflects a shrinking timber harvest mainly attributable to provincial policy changes, a dwindling fibre supply, rising costs and other pressures that have reduced the competitiveness of the B.C. forest sector.
TORONTO — A new report says Ontario’s housing market is expected to improve “modestly” next year as favourable economic conditions help push buyers off the sidelines, though higher borrowing costs could dull the extent of the rebound. Desjardins senior economist Kari Norman said the province’s housing sector “is in the midst of a striking contradiction.” Her report called the market “weak” despite improved affordability, greater buyer choice and easing rental conditions. The forecast predicts existing home sales will rise nearly five per cent in 2027 compared with this year, driven by lower prices, rising disposable incomes, policy supports for first‑time buyers and some release of pent‑up demand. But activity would still be well below long‑term norms, the report noted, while balanced market conditions should lead to average price growth of 2.4 per cent next year. The analysis said the interest rate backdrop will likely remain challenging.
The total market share of non-site-built single-family homes (modular and panelized) was just 3% of single-family homes in 2025, according to NAHB analysis of completion data from the 
Used cooking oil and crude tall oil originate in different industries, but renewable fuel production connects their commercial value. As demand for suitable feedstocks changes, signals from the used cooking oil market can help explain pricing pressure reaching forest-derived materials. That connection gives tall oil a broader market context. Its value reflects demand from established chemical applications and its role in renewable fuel supply chains. Changes in fuel economics can influence that balance, even when conditions in pulp markets remain relatively steady. 
The Federal Reserve’s inflation fight is running into a growing complication: The housing market is slumping even as broader price pressures persist. Housing data deteriorated further in September, according to separate reports Tuesday, adding to an already complicated policy landscape for the central bank as it contemplates its next move on interest rates. Things appear poised to get worse before they get better. If the Fed raises short-term rates as expected over the next several months, mortgage rates that are already at 7.43% could push even higher, putting a further damper on affordability. Higher home borrowing costs have coincided with a general rise in inflation and a housing shortage. “The housing market is about to go into a deep sleep unless Washington can do a 180 on its policies and make the cost of a new home more affordable,” wrote Chris Rupkey, chief economist at Fwdbonds. 
Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,400,000. This is 0.2 percent below the revised August rate of 1,403,000 and is 3.0 percent below the September 2025 rate of 1,444,000. Single-family authorizations in September were at a rate of 845,000; this is 4.0 percent below the revised August figure of 880,000. Authorizations of units in buildings with five units or more were
WASHINGTON – US single-family homebuilding and permits for future construction fell sharply in September as higher mortgage rates suppressed demand, suggesting residential investment resumed its declining trend in the third quarter. Single-family housing starts, which account for the bulk of homebuilding, dropped 4.6% to a seasonally adjusted annual rate of 859,000 units last month, the Commerce Department’s Census Bureau said on Tuesday. Single-family building permits decreased 4.0% to a rate of 845,000 units. Mortgage rates have surged in recent weeks, with the 30-year fixed rate averaging 7.40% last week. …Slumping sales have led to a glut of unsold houses on the market, further reducing the incentive for developers to break ground on new single-family housing projects. Despite the overhang of new single-family homes, there is a national housing shortage. …Residential investment rebounded in the second quarter, also reflecting renovations. The rise followed five straight quarterly declines.
U.S. kitchen cabinet sales fell 4.3% in August 2026 from a year earlier to $177.6 million, according to the Kitchen Cabinet Manufacturers Association (KCMA), whose Trend of Business report covers 47 participating manufacturers. Custom cabinet sales rose 12.2% to $54.0 million, semi-custom sales fell 9.0% to $95.0 million and stock sales fell 13.6% to $28.6 million. The number of cabinets shipped fell 11.4% to 437,697. In January–August, participants’ sales fell 6.3% to $1.41 billion. Custom sales fell 0.1% to $393.0 million, semi-custom fell 8.5% to $792.0 million and stock fell 8.3% to $228.7 million. Cabinet quantity fell 9.7% to 3.63 million. KCMA estimates the overall U.S. cabinet market for 2026 at $20.9 billion in sales and 92 million cabinets. [END]
Capacity utilization at U.S. sawmills and wood preservation plants rose to 76.5% in the second quarter from 70.8% in the previous quarter, according to the Census Bureau. That was the highest since the second quarter of 2025, when it was 77.6%. The Federal Reserve’s industrial production index for sawmills and wood preservation averaged 108.4 in the quarter, up 4.1% from the previous quarter and up 0.7% from a year earlier. Utilization at makers of veneer, plywood and engineered wood products rose to 75.5% from 67.8% in the previous quarter (65.5% a year earlier), while at other wood product manufacturers it rose to 73.3% from 70.1% (67.9% a year earlier). The survey measures actual output as a share of full production capability, so it shows how hard plants are running rather than how much capacity exists. The estimates are subject to revision.
Mortgage rates increased again this week, with the average 30-year rate hitting 7.4 percent for the first time since November 2023, Freddie Mac reported. The average 30-year mortgage rate rose 12 basis points from last week, when it was 7.28 percent, according to the government-sponsored company. This rate has risen for seven consecutive weeks and has sat above 7 percent for three weeks straight — the first such stretch since April 2024 and May 2024. …Home loan borrowing costs have spiked amid the U.S.’s ongoing war with Iran and a global bond market sell-off, as investors flee the market over persistent inflation and elevated oil prices. The week before the U.S. and Israel attacked Iran, the average 30-year mortgage rate was 142 basis points less. The 10-year U.S. Treasury bond yield similarly rose following the war. …Brent crude oil, the international benchmark, is trading at more than $103 per barrel as of Thursday afternoon.
In the third quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 62, up one point compared to the previous quarter. The RMI has remained within a narrow band between 59 and 70 for the past four years. Remodeler sentiment remains the standout sector within the housing industry, when compared to its single-family and multifamily counterparts. Despite sentiment remaining stable, remodelers report that economic uncertainty is making some potential customers hesitant to move forward with projects. Labor shortages, exacerbated by immigration enforcement and competition from data center construction, are extending the time it takes to complete projects. Nevertheless, remodeling is gaining share in the overall construction market, as it is somewhat less sensitive than new construction to the current elevated interest rates. NAHB’s projection for remodeling activity will remain stable in 2026 and grow slightly in 2027, which is consistent with today’s reading.
Mortgage rates rose sharply in September as multiple factors applied significant upward pressure on the U.S. treasury yields. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.86% in September, up nearly 20 basis points (bps) from August. The recent increase effectively erased the improvement in mortgage rates over the past year, with the 30-year mortgage rate reaching 7.03% by the end of the month. Compared to a year ago, the average rate is higher by 51 bps. The 15-year mortgage rate averaged 6.20% in September, up 22 bps from August and 70 bps from a year ago. The 10-year Treasury yield, a key benchmark for long-term borrowing, jumped 26 bps to an average of 4.94% in September and surpassed 5.00% toward the end of the month. …Broader concerns over elevated oil prices and geopolitical tensions, the U.S. fiscal deficit, and strong competition for capital from AI and hyperscaler investment also contributed to the rise in long-term yields.
On Monday, President Donald Trump signed an executive order temporarily allowing off-road “dyed” diesel fuel to be used on highways and deferring the applicable federal excise tax for the remainder of the year. The order directs the Secretary of the Treasury to defer payment of the federal excise tax normally imposed when dyed diesel is used on-road. The deferred tax would not accrue interest or penalties, and Treasury is also directed to explore ways to eliminate the obligation to repay those deferred taxes. The Secretary of Transportation is directed to coordinate with states, industry leaders, and labor organizations on access to dyed diesel. …The administration said the temporary measure is intended to reduce fuel costs for farmers, truckers, and other workers affected by restricted global diesel supplies. The full order is available 
Diesel prices have surged to levels that are creating significant cost pressures for logging and log-hauling businesses, which depend on heavy-duty trucks and fuel-intensive operations. As fuel costs climb, the expense of moving raw forest products rises with every mile, tightening margins and straining contractors who already operate on thin financial footing. These increases ripple through the entire supply chain, affecting delivered wood costs and operational predictability. As FRA President Tim O’Hara notes, “Rising diesel prices are creating real challenges for logging and hauling businesses, and mills have been working with contractors to ease some of that burden. It’s a strong reminder that our wood supply chain succeeds when every link supports the other.” The analysis underscores the need for short-term relief measures to stabilize costs and support the sector during this period of volatility. 
Business registrations in Russia’s forestry and logging sector fell sharply in the first eight months of 2026 while liquidations increased, according to Rusprofile calculations reported by Kommersant. …Russia recorded 1,210 new registrations of companies and sole traders in forestry and logging during January–August 2026, down 19.9% from the corresponding period, according to calculations by business-information service Rusprofile cited by Kommersant. Over the same eight months, 1,590 liquidations were recorded, an increase of 9.6%. That left liquidations 380 above registrations. Rusprofile calculated that the number of businesses closing was 31.3% higher than the number entering the sector.
UK residential construction remains in a slump, with the value of started projects 33% lower than the same period last year, according to new data from Glenigan. The value of started projects fell 8% in the three months to the end of September 2026, the construction experts found. The figures, published in the October 2026 edition of the Glenigan Construction Index, show weakness continuing across the housing market despite growing government ambitions to increase housebuilding. The index tracks underlying construction projects valued at £100m or less, unless otherwise stated. The residential figures underline the gap between the government’s housebuilding ambitions and the number of schemes actually getting under way. …Overall construction activity also remained subdued. The value of underlying projects starting on site fell 2% against the preceding three months and was 18% below the level seen a year earlier.
UK — Demand in softwood markets remains patchy at best, and an overall weakness in the market predominates leading merchants to adopt an ultra-cautious approach. Now that the Scandinavian mills are back in production after the summer holidays, their attention is focused on which markets will be able to absorb their productions. With UK demand on the back foot, importers and are concerned that the Swedes may try to squeeze unwanted volumes into the UK with price inducements. If this happens, and an excess of softwood arrives, it can only result in another self-destructing price war. …To mitigate the effects of low demand, some sawmilling groups are reducing production. …Sawmillers Holmen have announced reduced output for their Linghem mill in Sweden, Stora-Enso is discussing permanent closure of the Veitsiluoto unit in Finland, and there has been an overall drop in production among German softwood producers. …Further afield, curtailments are spreading across the US and Canada.
An analysis originally published by Austria’s Landwirtschaftskammer Kärnten says Europe’s timber industry continues to face weak construction activity, high financing costs and subdued demand. Global Wood’s English-language report says… The European timber industry is facing a prolonged period of consolidation as weak construction activity, industrial recession and higher financing costs continue to pressure the sector. The outlook was discussed at International Wood Day in Klagenfurt, Austria, where around 300 industry leaders and experts gathered. Raiffeisenbank International chief economist Gunter Deuber said Germany’s continued industrial weakness is affecting Central European sawmills, panel manufacturers and timber construction companies, with building permits remaining at historically low levels. High household savings and cautious spending are also limiting residential construction, while stricter lending conditions and elevated construction costs are delaying projects. Although interest rates have fallen, financing remains more expensive than before 2022. 
New housing starts in England rose sharply in the second quarter of 2026. This came even as the number of homes granted planning permission continued to decline, according to figures published Thursday by the Ministry of Housing, Communities and Local Government (MHCLG). Builders started work on 35,910 new dwellings between April and June. That was a seasonally adjusted 6% increase on the first quarter and 20% higher than the same period last year, the department’s “Housing Supply: Indicators of New Supply” release showed. Completions, however, fell to 35,800, down 3% quarter-on-quarter, though still 1% above a year earlier. Over the same period, permission was granted for 212,000 homes in the year to June 30. That was a 12% drop from the 242,000 approved a year earlier, according to provisional figures MHCLG compiled with contractor Glenigan. …MHCLG estimates 196,900 net additional homes were delivered in England in 2025-26. That was a 6% fall from the previous year.