U.S. trade with Canada and Mexico is back in Trump’s crosshairs with the tariff threat. …Much of the focus has centered on autos but Canada is also the top trading partner of the U.S. for critical chemicals, an industry now bracing for the potential impact. …Mineral firms in Canada are considered domestic sources under Title III of the Defense Production Act and have received U.S. federal funding for critical minerals projects in Canada. …Canada is also the largest supplier of U.S. energy imports, including crude oil, natural gas, and electricity. …Rand Ghayad, chief economist at the Association of American Railroads, said the interconnected rail network between the U.S. and Canada is a cornerstone of North American trade, underpinning economic growth and supply chain resilience. …The inflationary effects from tariffs will take some time to materialize, as these costs will need to be passed through to end buyers.
Lumber prices fell toward $580 per thousand board feet, retreating from eight-week highs of $600 on January 16th, as the impending 25% tariffs on Canadian softwood lumber, set to take effect on February 1st, weighed on the market. These tariffs, imposed by President Trump, will increase the cost of Canadian lumber, which is a key input for U.S. housing construction, potentially reducing demand as builders face higher material prices. The price hike could discourage housing projects, especially as the broader construction sector slows. Trump’s executive orders aimed at stimulating U.S. housing production, including efforts to lower construction costs, may further dampen demand for imported lumber by promoting domestic sourcing. As Canada is the largest supplier of U.S. lumber, the tariff’s impact on supply and demand dynamics is expected to be significant, with builders likely seeking alternatives as lumber prices rise.›
OTTAWA — The Consumer Price Index (CPI) rose 1.8% on a year-over-year basis in December, down from a 1.9% increase in November. …The CPI excluding food rose 2.1% in December. A temporary GST/HST break on certain goods was introduced on December 14, 2024. …The shelter component grew at a slightly slower pace in December, rising 4.5% year over year following a 4.6% increase in November. Rent prices decelerated on a year-over-year basis in December (+7.1%) compared with November (+7.7%). However since December 2021, rent prices have increased 22.1%. The mortgage interest cost index decelerated for the 16th consecutive month, reaching 11.7% year over year in December 2024, the smallest increase since October 2022 (+11.4%) as interest rates continued to rise.
Lumber prices remained above $590 per thousand board feet in January, hovering at eight-week highs as robust demand for building materials in the US compounded with dovish expectations for Federal Reserve policy. U.S. housing starts in December surged 15.8% from the previous month to a seasonally adjusted annual rate of 1.499 million units, the highest since February 2024 and well above market expectations of 1.32 million. Although building permits fell 0.7% to 1.483 million units, they exceeded forecasts of 1.46 million. At the same time, easing core inflation from the latest CPI report reinforced expectations of Federal Reserve rate cuts by mid-year, while mortgage applications jumped 33.3%, marking the largest weekly increase since 2020, as buyers sought to lock in borrowing costs despite rates exceeding 7%. Additionally, U.S. buyers stockpiled inventory ahead of a proposed 25% tariff on Canadian softwood lumber, while existing 14.4% duties further constrained supply. [END]
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.
Canada recorded a ninth consecutive monthly trade deficit in November, albeit smaller than expected as exports rose faster than imports, data showed on Tuesday. Total exports rose 2.2 per cent in November, helped by gains in a broad section of product categories, while imports were up 1.8 per cent, led by consumer goods and chemical, plastic and rubber products, Statistics Canada said. As a result, Canada’s trade deficit narrowed to $323-million from a revised $544-million deficit in October. Analysts polled by Reuters had expected a $900-million deficit in November. The trade surplus with the United States, by far Canada’s largest trading partner, widened to $8.2-billion from $6.6-billion in October. The surplus with the U.S. nearly offset Canada’s trade deficit with all other countries – which widened to $8.5-billion in November from $7.2-billion – underscoring the potential impact of the U.S. President-elect’s threat to impose tariffs on Canadian goods.
New support for forest-sector manufacturers throughout the province will create and protect jobs, strengthen local economies and diversify the range of fibre sources used to manufacture high-value, made-in-B.C. forest products. “The BC Manufacturing Jobs Fund is partnering with forestry companies throughout the province to grow and stabilize their operations and get the most out of our fibre supply, while producing more made-in-B.C. engineered wood products,” said Diana Gibson, Minister of Jobs, Economic Development and Innovation. Through the BC Manufacturing Jobs Fund (BCMJF), the Government of B.C. is contributing as much as $5.1 million toward seven forest-sector capital projects and five planning projects in communities throughout the province. Cedarland Forest Products Ltd. in Maple Ridge will receive as much as $1.3 million… Gilbert Smith Forest Products in Barriere will receive as much as $1.1 million…
Predictions for 2025 include: Energy output will jump… we’ll stop talking about hybrid work… maybe… the education boom will end… the north will struggle to retain population… we’ll stop ignoring the provincial deficit. …The outlook for f
After a dismal 2023 and 2024 in lumber markets in both demand and prices, it can only get better in 2025, right? Well, that depends. …The outlook for 2025 needs to incorporate several variables:
U.S. home prices rose 0.4% from a month earlier in December on a seasonally adjusted basis, slightly slower than the 0.5% growth posted in November. This is according to the Redfin Home Price Index (RHPI). …On a year-over-year basis, home prices closed the 2024 calendar year up 5.4%. That was the second-smallest annual increase in a calendar year since Redfin started tracking the RHPI in 2013, only trailing 2015 (5.2%). Redfin 
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.
US mortgage rates climbed closer to 7%, threatening to squeeze buyers trying to crack into the housing market. The average on a 30-year mortgage rose to 6.91% as of Jan. 2, up from 6.85% a week earlier, according to Freddie Mac data released Thursday. A measure from the Mortgage Bankers Association advanced 8 basis points to 6.97% in the period ended Dec. 27, a nearly six-month high. High borrowing costs are weighing on affordability. …“It’s not exactly a good way to start the new year,” said Odeta Kushi, deputy chief economist at First American Financial Corp. “Industry experts are coming to the consensus that 2025 is another year of higher for longer for the housing market. It’s not great news.” Mortgage rates tend to track Treasury yields, which continued to climb in late December after Federal Reserve policymakers projected a slower pace of interest-rate cuts in 2025 amid sticky inflation.
Rollercoaster market moves in the final days of 2024 offered a blunt reminder that investors are heading into a year of living dangerously. Stocks and bonds lurched lower after the Federal Reserve’s final policy meeting of the year, spooked by the notion that the central bank may be unable to keep cutting rates (as it had previously expected to) because of still-simmering inflation. The key is what Fed chair Jay Powell was careful not to say but what every fund manager knows: Donald Trump’s economic agenda could be bad for growth, fuel inflation, or even both. So for the first time in many years, investors have what they call “two-way risk” in the Fed policy. The central bank might be able to keep on cutting — the hunch is that this would be Trump’s preference. But it’s not outlandish to suggest it might start raising rates again instead. 
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.
