If it’s true that business hates uncertainty, then the B.C. forest industry is in for some ill feeling in 2017. Finding opportunity in the face of that uncertainty is the challenge for the coming year.
The biggest challenge comes from the United States, which has initiated trade investigations that are expected to result in duties of 30% or more being applied to Canadian lumber by the second quarter. That’s likely to lead to short-term chaos, according to an outlook published in December by the International Wood Markets Group consultancy. The U.S. is also seeking duties on unassembled products like window frames, which will bring more value-added businesses into their sights for the first time.
The duty will cause U.S. lumber prices to jump, but it will push Canadian costs higher, putting the brakes on some lumber production here, leading to layoffs and possible mill closures. Canada’s share of the American market is expected to drop.
That other perennial villain in the Interior lumber sector – the mountain pine beetle – will also play a dampening role in 2017. Loggers are harvesting the last of the beetle-killed wood that can be economically made into lumber, and the higher costs brought on by U.S. duties could marginalize those sawmills processing it, according to the consultancy.
However, the B.C. industry overall is well positioned to withstand the blows coming in 2017. Last year, the wood products sector posted its best performance since the recession, buoyed by a low Canadian dollar and rising prices for most of the forest commodities.
From Business Vancouver: https://www.biv.com/article/2017/1/bc-forest-firms-brace-us-lumber-battle/