MNI INTERVIEW: Carney Job 1 Is Revive US Trade Talks-Foresters

Prime Minister Mark Carney’s top priority must be restoring U.S. trade talks because relief in last week's budget won't come fast enough prevent more lost jobs and investment, Forest Products Association of Canada chief Derek Nighbor told MNI.

“Mills are taking time off, reducing shifts, or shutting down temporarily. The sooner we get a deal that works for both Canada and the U.S., the better off both countries will be,” he said. “Until that happens, uncertainty in the marketplace will continue."

Lumber exports to the U.S. were down 25% in October from a year earlier on tariffs and slowing housing demand, Nighbor said. “We’ve seen about 2,000 people across the country in forestry lose their jobs in just the last few weeks.” 

The industry remains Canada’s largest export category after energy and autos, worth CAD8 billion annually and CAD13 billion when pulp, paper, and panels are included. “But until the trade uncertainty is resolved, it’s going to be very difficult to see significant new investment in Canada,” said Nighbor. His father and grandfather worked in mills along the Ottawa River that flows past Parliament.

LOSING SHARE TO EUROPE

U.S. softwood tariffs have been in place for decades and the industry was left out of previous free trade agreements, making it even harder to get a deal now. Trump raised lumber tariffs further this year, and Carney told reporters Monday it's a sector where the U.S. in other deals has sought not just tariffs but quotas citing national security. (See: MNI INTERVIEW: Canada Truckers See Worst Slump In Four Decades)

Canada has lost six percentage points of U.S. market share since 2017 and not to American firms but to European suppliers, Nighbor said. Roughly 70% of U.S. lumber demand is met by local producers, leaving 30% dependent on imports.

“Our message to the Americans is simple - if you want to rebuild communities after hurricanes and storms and address a housing shortfall of six million homes, Canada is your most reliable partner,” he said.

Further Bank of Canada rate cuts would offer little relief he said, aligning with Governor Tiff Macklem’s view monetary policy isn’t a precise tool to offset tariff damage or revive sector-specific investments.

PATHWAYS TO A DEAL

While the federal budget provides short-term support, the FPAC chief said the real opportunities lie in longer-term measures like tax credits for biomass and green energy. Buy Canadian procurement rules will eventually help alongside efforts to diversify exports to Japan, China, India and the Caribbean.

“Can we sell another half a billion to Japan over the next few years? Maybe. But you’re not going to offset eight billion dollars of U.S. lumber sales overnight,” Nighbor said.

“The biggest priority for Canada's forest sector is to see some kind of a trade agreement that works for Canada and the United States," Nighbor said. "There are pathways here to reach a deal. Part of that is the U.S. economy really does depend on on wood from Canada right now."