The Bank of Canada is holding its key interest rate at 2.25%, a move that was widely expected after an encouraging round of third-quarter data showed the Canadian economy has withstood some trade war-induced turmoil. Central bank governor Tiff Macklem wrote in his opening remarks that the current rate is at “about the right level” to give the economy a boost while also keeping inflation close to its 2% target rate. Canada’s economy proved more hardy than expected in the third quarter, with GDP and jobs growth beating expectations, and the unemployment rate dropping to 6.5% in November. Inflation is hovering just above 2%, and the Bank of Canada’s core measures of inflation are trending closer to 3%. While the steel, aluminum, auto and lumber sectors have been pummelled by US tariffs, which is weighing more broadly on business investment, “the economy is proving resilient overall,” Macklem said.
Lumber futures fell toward $530 per thousand board feet, down nearly 10% from November’s peak, as the market contends with pronounced oversupply and lingering weak demand. Mills and distributors continue to carry elevated inventories, a hangover from early 2025 when buyers front-loaded purchases in anticipation of tariffs, leaving the market with a persistent supply overhang. At the same time, US housing starts and building permits remain below last year’s levels, reflecting a prolonged construction slowdown as easing borrowing costs have yet to materialize in higher new building activity and limit near-term consumption of framing lumber. Demand from renovation and new homebuilding also remains subdued, with housing-related wood products consumption estimated to have declined in 2024 and only a modest recovery expected in 2025. 
Prime Minister Carney announced measures to help protect and strengthen the sectors most affected by U.S. tariffs. …The focus of the liquidity initiatives are to reduce bankruptcy or closure risk for leveraged or high-cost lumber mills through initiatives such as the BDC Softwood Lumber Guarantee Program… and enhancing EI worksharing and training grants. The demand support initiatives include working with railway companies to cut freight rates, prioritizing shovel-ready, multiyear projects that use Canadian wood products and creating demand for Canadian Wood products. The structural initiatives include a “forestry concierge” at Natural Resources Canada to help mills navigate loans and programs as well as an industry-led transformation task force to expand, diversify and identify opportunities and support affected communities. …The measures will help the sector but the bigger picture is really about duties and a supply/demand balance that has traditionally been difficult to obtain given this industry’s capital intensity. [to access the full story a Globe & Mail subscription is required]
The Consumer Price Index (CPI) rose 2.2% on a year-over-year basis in October, down from a 2.4% increase in September. The all-items CPI decelerated largely due to gasoline prices, which fell at a faster pace year over year in October (-9.4%) compared with September (-4.1%). Excluding gasoline, the CPI rose 2.6% in October, matching the increase in September. …The CPI rose 0.2% month over month in October. On a seasonally adjusted monthly basis, the CPI was up 0.1%. …Consumers paid more year over year in October for homeowners’ home and mortgage insurance (+6.8%) and passenger vehicle insurance premiums (+7.3%). Among the provinces, prices rose the most in Alberta for both measures, with a 13.7% increase in homeowners’ home and mortgage insurance and a 17.8% increase in passenger vehicle insurance premiums.
Vancouver, BC – Canfor Corporation and Canfor Pulp Products Inc. announced today that they have entered into an arrangement agreement pursuant to which Canfor Corp will acquire all of Canfor Pulp’s issued and outstanding common shares not already owned by Canfor Corp and its affiliates pursuant to a court-approved plan of arrangement under the Business Corporations Act. Under the terms of the Arrangement Agreement, the shareholders of Canfor Pulp, other than Canfor Corp and its affiliates, will have the option to receive, for each Canfor Pulp Share held: 0.0425 of a common share of Canfor Corp, or $0.50 in cash. ….Canfor Corp currently owns approximately 54.8% of the issued and outstanding Canfor Pulp Shares. The $0.50 per Canfor Pulp Share represents a premium of 25% to Canfor Pulp’s closing share price on December 2, 2025, on the Toronto Stock Exchange and a premium of 38% based on the 10-day volume-weighted average share price of Canfor Pulp as of December 2, 2025, on the TSX.
The US Federal Reserve is poised to deliver its third straight interest rate cut Wednesday, while simultaneously firing a warning shot about what’s ahead. Following a period of remarkable indecision about which way central bank policymakers would lean, markets have settled on a quarter-percentage point reduction. If that’s the case, it will take the Fed’s key interest rate down to a range of 3.5% to 3.75%. However, there are complications. The rate-setting Federal Open Market Committee is split between members who favor cuts as a way to head off further weakness in the labor market and those who think easing has gone far enough and threatens to aggravate inflation. That’s why the term “hawkish cut” has become the buzzy term for this meeting. In market parlance, it refers to a Fed that will reduce, but deliver a message that no one should be holding their breath for the next one.
The average mortgage rate in November continued to trend lower to its lowest level in over a year. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.24% in November, 2 basis points (bps) lower than in October. Meanwhile, the 15-year rate increased 3 bps to 5.51%. Both the 30-year and 15-year rates remain lower than a year ago, dropping by 57 bps and 52 bps year-over-year, respectively. …Falling mortgage rates have shown some impact on housing activity. Mortgage application activity continues to strengthen, led by increases in adjustable-rate mortgages and refinancing applications. Additionally, existing home sales rose to an eight-month high in October. There is no data available for new home sales in October due to the government shutdown.
The US Census Bureau announced the following value put in place construction statistics. …Construction spending during August 2025 was estimated at a seasonally adjusted annual rate of $2,169.5 billion, 0.2 percent (±0.7 percent) above the revised July estimate of $2,165.0 billion. The August figure is 1.6 percent (±1.5 percent) below the August 2024 estimate of $2,205.3 billion. During the first eight months of this year, construction spending amounted to $1,438.0 billion, 1.8 percent (±1.0 percent) below the $1,463.7 billion for the same period in 2024. …Spending on private construction was at a seasonally adjusted annual rate of $1,652.1 billion, 0.3 percent (±0.5 percent) above the revised July estimate of $1,647.5 billion. …In August, the estimated seasonally adjusted annual rate of public construction spending was $517.3 billion, virtually unchanged from (±1.2 percent) the revised July estimate of $517.5 billion. 
The Supreme Court could decide on the legality of many of the Trump administration’s tariffs within months, but the ruling won’t impact many of the administration’s levies on imported construction materials such as lumber, steel, aluminum and copper. …Many construction materials imported into the US will remain subject to hefty tariffs regardless of how the Supreme Court rules. Some homebuilding leaders warn that home prices could increase by thousands of dollars beginning next year. …Cristian deRitis, at Moody’s Analytics, said “While importers of other building materials might experience some relief, this could be temporary. The administration may choose to expand the Section 232 tariffs as a fallback strategy if the reciprocal tariffs are invalidated,” deRitis said. …There hasn’t yet been an increase in lumber prices, but NAHB Chairman Buddy Hughes forecasted that the lumber tariffs “will create additional headwinds for an already challenged housing market by further raising construction and renovation costs.”
“President Donald Trump’s tariffs could increase builder costs anywhere from $7,500 to $10,000 per home,” said Rob Dietz, chief economist at the National Association of Home Builders… Last year, the NAHB estimated that every $1,000 increase in the median price of a new home prices out roughly 106,000 potential buyers. The biggest impact has been felt in lumber prices, which are expected to total about $4,900 per home on average. …about a third of the wood purchased for homebuilding comes from Canada. Domestic lumber producers generally raise their prices to match import prices. …major players like Home Depot are better able to mitigate and predict rising and volatile prices than smaller retailers. North American Builder’s Supply, based in Illinois, has filed for Chapter 11 bankruptcy protection. …“Over 50% of our inventory is not part of tariffs and is obviously sourced domestically,” Home Depot Executive Vice President William Bastek shared.
The latest Global Wood Trends report – Softwood Lumber – Tariffs, Turbulence and New Trade Flows to 2030 – says from 2000 to 2024, European lumber output grew slowly at 0.4% per year but still outpaced domestic demand growth. This allowed Europe to expand exports overseas, a trend likely to continue as Russian and Canadian shipments remain constrained. …Production has expanded faster than demand, with exports rising from 10% of output in 2009 to 19% in 2024. Growth has been concentrated in Northern and Central Europe — led by Sweden, Finland, Germany, and Austria — where harvest levels are now close to structural limits. …Global Wood Trends concluded that Europe’s lumber market is entering a period of tightening supply and gradually recovering demand. While production growth is expected to shift toward Northern and Eastern Europe, overall expansion will be limited by structural harvest constraints in Central Europe. Stronger domestic consumption, combined with potentially higher US demand will likely support higher prices for logs and lumber. 
Sweden’s Green Business Index declined in the fourth quarter of 2025 as forestry and crop farming weakened, according to data from the Federation of Swedish Farmers. The total index fell to 100.7 from 106.5 in the previous quarter, marking a broad slowdown across several agricultural industries. The forestry subindex recorded the largest fall, dropping by 19 points to 97.6, its lowest level since spring 2020. The decline reflects weaker export demand, lower prices for sawn wood and pulp, and a soft U.S. dollar that reduced export revenues. New tariffs on Swedish wood products to the United States and a slower global economy further limited profitability. LRF reports that sawmills and pulp producers have experienced tightening margins, while forest owners face lower returns and are reducing harvesting activity. 
Japan’s housing starts rose 3.2% year-on-year in October 2025, defying market expectations of a 5.2% decline and reversing a 7.3% fall in September. It was the first annual increase since March, driven by rebounds in rented units (4.2% vs -8.2%), built-for-sale homes (14.8% vs -8.3%), and prefabricated housing (9.2% vs -0.4%). However, weakness persisted in owned homes (-8.2% vs -5.6%), while issued units slumped sharply (-36.3% vs 53.7%) and two-by-four homes also turned negative (-3.8% vs 2.1%). [END]
MOSCOW — Russia’s forestry sector could face a deep contraction next year as sanctions tighten, interest rates remain high and the ruble stays strong, Deputy Industry and Trade Minister Mikhail Yurin said Thursday. Addressing a Federation Council committee, Yurin said the industry has entered a “downward trend,” with the worst-case scenario pointing to a 20-30% drop in output in 2026. The ministry expects already falling production to continue declining into 2027 if geopolitical conditions worsen, Interfax quoted Yurin as saying. According to the Economic Development Ministry, wood-processing is among the weakest performers in Russia’s industrial landscape. Output fell 4.3% in the third quarter and the slump accelerated to 7.8% in October. …He said Russian timber exports have fallen by more than 20% since before the war, from $12.5 billion in 2021 to to $9.8 billion. Logging volumes are expected to hit a four-year low of 182 million cubic meters this year.
China’s recent environmental policy shift is transforming the global recycled pulp market. After years of tightening restrictions on solid waste imports, China has now expanded its scope even further by banning certain types of recycled pulp. This development highlights the country’s ongoing goal to eliminate “foreign garbage” and improve the quality and sustainability of its locally produced paper. …In January 2021, China fully implemented the National Sword policy — a sweeping ban on most solid waste imports, including unsorted and recycled paper. …In October 2025, China took its environmental agenda a step further by targeting specific types of recycled pulp — particularly those processed through dry-milling techniques. …The new restrictions have rippled across the global paper recycling supply chain. Exporters that previously relied on China’s massive demand are scrambling to find alternative markets, while Chinese paper producers face delays and shortages in pulp supply.