The Bank of Canada raised its key interest rate to 2.5% with a warning that more increases may be needed. In related news: Ontario’s residential builders said tariffs add to costs; US new home sales declined in September; US consumer confidence ticked up in October; and the US Federal Reserve is expected to hold rates steady. In Business news: Canfor Southern Pine is modernizing its Arkansas operations; UPM reported lower Q3 earnings; Canada–US trade discussions show little signs of progress; and Brazil’s pulp industry faces tariff and deforestation-compliance challenges.
In Forestry/Wildfire news: BC’s new Conservative government outlined its forestry commitments; logging near Castlegar’s old-growth drew protests; a Canadian filmmaker examines Finnish wildfire prevention practices; and experts debate the need for more Canadian water bombers. Meanwhile: the National Association of State Foresters announced their 2026 Smokey Bear winners; Canada faces potential EU carbon tariffs; and a new report links wildfire smoke to rising mortality in Canada.
Finally, could harvesting pine resin help protect Portugal’s forests from wildfires?
Kelly McCloskey, Tree Frog News Editor
The U.S. and Canada are flirting again. Washington and Ottawa have increased the tempo of their trade talks over the past week. …Commerce Secretary Howard Lutnick, who helped torpedo a previous round of negotiations over the summer, and Canadian Trade Minister Dominic LeBlanc have been speaking regularly since then. They have primarily discussed Trump’s tariffs on sectors like autos and steel that have been a sticking point for Canada all along. …The uptick in engagement has triggered a flurry of headlines on both sides of the border as well as White House boasts that a deal is near. But unlike Trump, Carney has little political incentive to make concessions at the moment. …The lack of new concessions or tangible breakthroughs is a sign that the recent flurry of outreach may be more of a White House effort to soothe Republicans’ midterm worries. 
Brazil’s pulp industry faces mounting trade pressures as US tariffs affect selected pulp grades, new US trade-duty proceedings target high-purity dissolving pulp, and the European Union prepares to apply its deforestation regulation. The challenges come as Brazilian pulp exports declined in the first half of 2026. …The United States introduced an additional 25% Section 301 tariff on specified Brazilian goods, effective July 22, 2026. Most wood pulp products were exempted from the additional tariff, but high-purity dissolving pulp was excluded from the exemptions. …Separately, on October 13, the US Department of Commerce announced final affirmative determinations in anti-dumping investigations into high-purity dissolving pulp from Brazil and Norway, as well as a countervailing duty investigation into Brazilian imports. …The European Union’s Deforestation Regulation (EUDR) is scheduled to begin applying to large and medium-sized operators on December 30, 2026. …For Brazilian pulp producers exporting to Europe, compliance will require appropriate supply-chain traceability and documentation.
OTTAWA — The Bank of Canada on Wednesday hiked its key policy rate for the first time in more than three years and said further increases might be needed to prevent soaring energy costs from fuelling broader inflation. The bank lifted the rate by 25 basis points to 2.5 per cent, as widely expected, and also ramped up its inflation forecast for 2027 to 3.1 per cent from the 2.0 per cent it had predicted in July. Growth this year is set to be 1.0 per cent, higher than the 0.7 per cent seen in July. “With the outlook for inflation substantially higher and the economy showing resilience, an increase in the policy rate is needed to reduce the risk,” Governor Tiff Macklem said. …The annual inflation rate hit 3.2 per cent in September, above the bank’s one-three per cent target range, almost solely led by higher energy and energy-related costs of transportation.
At a time when Canada and the U.S. are struggling to address severe housing affordability challenges, the tariff war is pushing construction costs in both countries in precisely the wrong direction. While government leaders on both sides of the border have repeatedly pledged to increase housing supply, lower costs and make homeownership more attainable, escalating tariffs and counter-tariffs on both the residential and industrial, commercial and institutional (ICI) construction industry are having the exact opposite effect. …Developers are already grappling with persistent labour shortages, elevated interest rates, soaring land prices, development charges and regulatory hurdles. Added to that list is now a new and destabilizing force: tariffs on key construction materials and building components that are essential to housing projects. …Every tariff imposed somewhere in the supply chain eventually leads to higher prices. That matters because the Canadian and American construction industries are deeply integrated. 
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the following new residential sales statistics for September 2026. Sales of new single-family houses in September 2026 were at a seasonally-adjusted annual rate of 676,000. This is 0.6 percent (±13.8 percent)* below the August 2026 rate of 680,000, and is 5.3 percent (±12.5 percent) below the September 2025 rate of 714,000. The seasonally-adjusted estimate of new houses for sale at the end of September 2026 was 476,000. This is 1.0 percent (±0.9 percent) below the August 2026 estimate of 481,000, and is 2.3 percent (±4.0 percent) below the September 2025 estimate of 487,000. This represents a supply of 8.4 months at the current sales rate. The months’ supply is 1.2 percent (±14.7 percent) below the August 2026 estimate of 8.5 months, and is 2.4 percent (±14.1 percent) above the September 2025 estimate of 8.2 months.
Canada is facing a carbon tariff threat from the European Union within months as the economic bloc fully implements its Carbon Border Adjustment Mechanism (CBAM). According to internal documents, Canadian iron, steel and aluminum are not exempt from the carbon tariff even with Canada’s national price on carbon and its decade-old trade deal with the European Union. …With the Canada-EU Summit this week in Montreal, Ottawa’s diplomats continue to seek an agreement with Brussels before Canadian exporters face additional compliance costs and a carbon charge that European importers will have to pay at the border in 2027. Prime Minister Mark Carney said on Tuesday that the summit marks the start of negotiations for Canada to become a closer strategic partner to the 27-member bloc. …Global Affairs estimates $2.8 billion worth of goods annually are exposed to the carbon import levy — primarily on metals that are already impacted by U.S tariffs.