Like a pair of fraternal twins, the timber markets of the United States and Canada don’t quite look identical. In the West, both sides cut conifers mainly for the U.S. housing market. The industries each revolve around huge swaths of public forest, and have boisterous debates about how to manage that landscape. Whole communities depend on the logging and milling business north and south of the border.
But Americans and Canadians see the same issues differently in ways likely to roil relations throughout the Pacific Northwest. Take the housing market. Housing starts in the United States hit a nine-year high in October with 1.32 million starts. While that’s still off the long-term average of 1.5 million, it means good news for anyone selling 2x4s. Until we get to the business of selling 2x4s.
Two-thirds of British Columbia’s lumber production flows south to the United States, according to market analysis by Business Vancouver journalist Gordon Hamilton. Most of the remaining third goes across the Pacific Ocean to China. And several cross-border issues demand attention.
First, the Canadian dollar currently buys 74 U.S. cents. That’s down from near-parity in 2012. And it means Canadian lumber imports have a big competitive price advantage against American suppliers. Hamilton noted it also means the Canadians attract more attention from price-sensitive Chinese lumber importers.
“We see less tourists and more wood coming this way,” said Craig Rawlings of Forest Business Network, a timber industry newsletter. “It always seems to me there’s no shortage of wood in the world. If it doesn’t come from Canada, it has to come from somewhere else.”