The Canadian Forest Sector Transformation Task Force begins work to restructure and retool Canada’s forest sector. In related news: BC launches Forestry is a Solution at Prince George forum; Nova Scotia pushes back on softwood duty accusation by 3 provinces; North Cowichan mayor seeks Fed support for laid-off Crofton mill workers; Canfor’s mill closure blows hole in Houston, BC budget; and Georgia may end sales taxes to help timber companies. Meanwhile: global markets drop as Trump reignites trade war over Greenland; Canada’s inflation rate ticks up to 2.4%; and US builder sentiment fell 2 points to 37.
In Forestry/Climate news: Canada forecasts 2026 to be among the hottest on record; BC postpones implementation of Heritage Conservation Act due to development concerns; the USDA prepares for expanded mandate with 20K fewer employees; New Mexico reports alarming tree-death rise in 2025; Wisconsin tribes oppose the Roadless Rule change; and EU deforestation regulation brings relief to the timber sector.
Finally, Canadian softwood duties on deposit with the US reach a staggering CAD $13.7 billion.
Kelly McCloskey, Tree Frog News Editor
The Nova Scotia government is defending itself after three other provinces levelled accusations that it is being secretive and undermining Canada’s fight against the United States over softwood lumber. Nova Scotia is urging the US Department of Commerce to reject requests from Quebec, Alberta and Ontario for the Atlantic province to provide much greater detail on how it calculates fees charged for harvesting timber. …Nova Scotia asserts that it should not be blamed for its surveys of private timberland owners that could result in higher fees for cutting down trees when compared with other provinces. The US has levied countervailing duties, arguing that other provinces have tree-harvesting fees that are too low when compared with Nova Scotia, which is exempt from US lumber duties. …Lawyers for Quebec, Alberta and Ontario urged the Commerce Department to make inquiries, saying the US should even consider abandoning the private surveys as a benchmark. [to access the full story a Globe & Mail subscription is required]
North Cowichan’s mayor wants the federal government to extend its temporary Employment Insurance program to include workers at the Crofton pulp mill who will be working until mid-April. In letters to Minister of Jobs and Families Patty Hajdu and Jeff Kibble, MP for Cowichan-Malahat-Langford, Rob Douglas said the temporary EI measures that Ottawa introduced last summer in response to major economic conditions across the country, including mill closures, are set to expire on April 11. That’s just three days before approximately 60 workers, who are being maintained at the Crofton mill for operational considerations beyond its closure in early February, will receive their layoff notices on April 14. …Douglas said that, on behalf of the community, he is requesting that the federal government extend the temporary EI measures or implement an exemption mechanism to ensure that all Crofton mill workers affected by the closure are treated equitably.
ATLANTA — A proposed amendment to the Georgia Constitution would end sales taxes on timber, a major industry battered by mill closings and storms. House Majority Leader Chuck Efstration said a bipartisan group of legislators want to help protect “a cornerstone of the state’s rural economy.” “The timber tax cut is necessary because Georgia timber farmers are facing severe economic hardship following the closure of multiple sawmills in Georgia and significant losses in the aftermath of Hurricane Helene,” said Efstration, R-Mulberry, the sponsor of House Resolution 1000. “Georgia is a national leader in forestry, and I want to help this state’s rural economy and the livelihood of many Georgians.” Georgia’s forestry industry was the largest in the nation in 2021 based on harvest volume and product export values of nearly $4 billion, according to a report by the Georgia Forestry Association. But timber producers have suffered in recent years. 
Canada’s annual inflation rate ticked up to 2.4% in December compared to the same period last year, when the federal government implemented a GST break that brought some prices down, Statistics Canada said. The temporary tax cut, which began on Dec. 14, 2024, lasted for two months. It reverberated through monthly inflation data for part of 2025 but officially fell out of the year-over-year movement last month, sending price growth accelerating, according to the data agency. December’s rate was a smidge higher than the 2.2% rate seen in November. It was partly offset by a year-over-year decline in gas prices. With energy excluded, inflation rose to 3% in December. …”The main takeaway here is that after a year of some wide divergences, almost all of the main measures of inflation are now very close to [2.5%], in tune with the Bank of Canada’s view on the pace of underlying inflation,” wrote BMO’s Douglas Porter.
Global markets plunged Tuesday after President Trump reignited fears of a US trade war with the European Union, America’s largest trading partner. The president showed no signs of backing off his threat from Saturday to hit seven EU countries and the United Kingdom with new tariffs unless they supported his push for American control of Greenland. Asked if he would be willing to use force to seize the semi-autonomous Danish territory, Trump replied, “No comment,” on Monday. The S&P 500 sold off by around 1.3% in early trading, while the Nasdaq Composite plunged 1.7%. The Dow Jones Industrial Average dropped more than 600 points. The S&P 500 has erased its gains for the year so far. Investors also sold off U.S. government bonds, driving up interest rates. Rising returns on US treasuries usually translate into higher mortgage rates and interest on new personal loans.
The federal government is looking for a hub to build modular homes for the Arctic. Prince George, with its forestry infrastructure, industrial base and transportation networks, is being considered as a possible site for that industry. Mayor Simon Yu [said] the city has everything it needs to create a new industry for the region. “We have to seize the moment,” said Yu. “For housing developments up in the Arctic, Prince George will be the centre of action. …This is a key to solve our lumber problem. We’ve got the wood, we’ve got the technology, we have a university here, we have a research program, we have CNC here, we have the workers and we will get this modular home factory going. We need to add value to wood products to create jobs right here and build houses for our overseas markets as well as for Canada.”
PRINCE GEORGE, BC – Today, at the BC Natural Resources Forum (NRF), a broad coalition of forestry workers, community leaders, and industry representatives officially launched a new province-wide platform: “Forestry is a Solution”. The coalition is asking British Columbians to voice their support for the workers and families that depend on forestry – a sector that is vital to the province’s heritage and its future. 
“British Columbia has the forests, the workers, and the expertise to lead the world, yet the sector currently faces significant headwinds from global competition, challenging operating conditions, and damaging U.S. trade actions,” the coalition stated. “This campaign is about homegrown solutions that use our resources to solve our most urgent challenges—from building affordable housing to reducing wildfire risks in our backyard”. The initiative centers on a new digital hub, 
Government is postponing the introduction of proposed amendments to the Heritage Conservation Act that had originally been anticipated for spring 2026. This decision reflects the need to continue engagement to gather and incorporate additional feedback from industry, local governments and First Nations. Input received to date has confirmed the importance of streamlining the permitting for major projects on Crown land and private residential projects, ensuring quicker community rebuilds following a disaster, and better protecting heritage and significant First Nations cultural sites. The Ministry of Forests will continue to engage with industry, project proponents, First Nations, local governments and other interested parties. Specifically, the Province will be inviting industry partners to a cross-sector meeting in the coming weeks to discuss the permitting process, and will continue to welcome feedback as the work progresses.
One of the least visible workforce developments of 2025 — the departure of more than 20,000 employees from the U.S. Department of Agriculture — became public just before the week between Christmas and New Year’s, a period that typically draws limited public attention. According to payroll data reviewed by USDA’s Office of Inspector General, 20,300 employees left the department between mid-January and mid-June, reducing total staffing from roughly 110,300 employees. The departures occurred as USDA prepares to administer an estimated $234 billion in farm, food, nutrition, conservation, and rural development programs in fiscal year 2026. …Two agencies recorded the largest number of departures in absolute terms. The U.S. Forest Service and the Natural Resources and Conservation Service experienced the highest staffing losses across USDA agencies. The Forest Service, “which oversees millions of acres of federal land,” reported Politico, “lost 5,860 workers,” while NRCS lost 2,673 employees.
New Mexico’s Forestry Division is concerned after thousands of trees died last year due to warm temperatures, drought conditions, and native insects. Victor Lucero, the forest health program coordinator, said in 2024, about 67,000 acres of trees died. Last year, that jumped to about 209,000 acres. Most of the damage is south of I-40, including parts of the Lincoln National Forest near Ruidoso and areas west of Socorro in the Gila National Forest. The main culprit is native bark beetles. Lucero explained that when it’s warm and dry, trees get stressed and weakened, giving off chemicals that attract the beetles. Once the beetles get under the bark, they tunnel in, cut off the tree’s ability to move water and nutrients, and bring in fungi, leading to the tree’s death over time.
Tribes in Wisconsin and beyond are opposing the Trump administration’s proposal to end protections for millions of acres of roadless areas on national forest land. …But Wisconsin Ojibwe tribes said the move was conducted without consultation and threatens natural resources they rely on, said Conrad St. John, chairman of the St. Croix Chippewa Indians of Wisconsin. “They want to log it for the mature timber… which is revenue-based to create money for big corporations,” St. John said. …In Wisconsin, roadless areas account for less than 5 percent of the national forest’s 1.5 million acres. But Dylan Bizhikiins Jennings said they make up a vital portion of the region’s national forests, saying the administration’s actions show disregard for tribal sovereignty and treaty rights. He’s director of public information for the Great Lakes Indian Fish and Wildlife Commission, which represents 11 tribes in Wisconsin, Michigan and Minnesota.
Negotiations between the European Commission, European Council, and European Parliament, often referred to as the “trilogue”, have reached a significant conclusion regarding the European Union’s Deforestation Regulation (EUDR). On December 4, 2025, an agreement was reached, which promises to ease the administrative burden on the timber industry across Europe. This marks an important milestone, with changes that significantly affect the way the sector will handle the regulation moving forward. The EUDR, designed to combat global deforestation, will now come into effect in January 2027, offering a twelve-month delay for businesses to adjust. One of the most crucial changes in the reform is the elimination of the complex process requiring the forwarding of reference numbers throughout the entire supply chain. This has been hailed as a victory by many industry leaders, including Dr. Erlfried Taurer, Chairman of the Austrian Timber Industry Association.
OTTAWA, ON
Deposits $10.6 Billion CAD + Interest 2.6 Billion + FX Gain 0.5 Billion = Total $13.7 Billion
Canadian softwood lumber exporters are currently paying a combined duty deposit rate of 45.16% on lumber imported into the United States.