If a tree falls in a Canadian forest, will Donald Trump’s America still buy it?

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James Furney’s black “Dump Trump” T-shirt was a gift from a buddy in Los Angeles who, like a good percentage of folks, viewed Donald Trump’s bid to become the Republican nominee for president prior to the 2016 United States election as a publicity stunt that wasn’t funny and needed to be stopped before something truly unfunny happened.

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Depending upon your political stripes and opinion of international trade relations, something unfunny did happen — twice — which is why on an overcast morning on north Vancouver Island, Port McNeill’s mayor fished the Trump shirt from his dresser drawer before answering a call to discuss the economic storm threatening to cripple a one-industry town that owes its existence to the nearby forest.

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It is a forest Furney’s father Gerry came to from Ireland in 1956. He was keen to work and, like so many other immigrants, found his way to a West Coast logging camp, where any visions he may have had of becoming a lumberjack ended early on due to a workplace injury and reassignment to the machine shop. Thanks to a kindly old-timer there who encouraged him to strike out beyond the trees, the Irishman started a fuel-delivery business servicing the camps.

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Furney had other talents as well, including a gift for the gab and outsized ambitions for a small forestry town of 2,500 people that nobody outside the other small logging and mining towns nearby had heard of. These qualities led to his election as mayor, an office he occupied for 36 years.

“I like to joke that I am the hereditary mayor,” said his son, who also went into the fuel-delivery business. “I remember asking my father about the difference between Port McNeill and other small Canadian towns and he would say to me, ‘In a mining town, the miners come, and they leave after the ore is gone, but forestry attracts people who arrive with the expectation that their children and grandchildren are going to find work in the forests.’”

Port McNeill is living proof of Gerry Furney’s words. It’s home to third- and fourth-generation loggers, while its timberlands, which were spared the worst of the industrial logging excesses of the 1960s and 1970s, continue to produce cut-and-milled lumber of the sort that the U.S. homebuilding industry hungers for.

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Canada, as a whole, sent more than $15 billion of lumber and other sawmill products to the U.S. in 2024. That wood was subject to softwood lumber import duties that are set to rise to 34.45 per cent in October from 14.54 per cent, and potentially an additional 25 per cent Trump-imposed tariff at some point.

“To think that anyone is going to be insulated from what is going on with Trump would be delusional,” Furney said. “We are a forestry town and people around town are already watching their wallets and curtailing their spending, and businesses that should be ramping up now to hire summer students aren’t going to be hiring.”

Trump has said the U.S. does not need Canadian wood to build houses, and his potential tariff hit, on top of the import duties, would be another cruel blow to a British Columbia forestry sector that is already in crisis due to a mess of the province’s own making.

The NDP government elected in 2017 presumably set out with the best of intentions to modernize forestry in such a way that First Nations would become key stakeholders and industry decision drivers while protecting and limiting the harvesting of the province’s old-growth forest.

But it has largely produced a 21st-century tangle of new regulations, permitting bottlenecks, bureaucracy, rounds and rounds of talks and public consultations without discernible action and annual allowable cut limits — the volume of timber the province dictates can be cut each year — that get set high, but never get reached.

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In short, B.C. has plenty of wood and plenty of potential buyers for it, especially in the U.S., which was a $5.69-billion export market for the province in 2024, but not enough of that wood has been getting cut in recent years.

A U.S. housing crisis

That makes for gloomy days on the West Coast; a malaise that could spread to other lumber towns in Ontario and Quebec and push the industry to the brink of collapse, all thanks to a trade war nobody outside the Oval Office wanted, including U.S. homebuilders who fancy Canadian spruce over American yellow pine because it’s lighter and easier for carpenters to haul around, put a nail through and remove a nail from.

Canadian spruce probably isn’t a point of frequent discussion outside lumber towns, but it, and Canadian wood in general, is something that James Tobin, chief executive of the National Association of Home Builders, an American lobby group based in Washington, D.C., has been talking about to anyone willing to listen.

Remember the Canadian housing crisis? It used to dominate the national news cycle until Trump started a trade war, an April 28 federal election call was made and the stock market chaos took centre stage. It turns out the U.S. is in a housing crisis, too, one dating back to 2008’s great financial crisis.

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The U.S. has not built enough homes to keep pace with demand. According to Tobin, the shortfall in single-family homes is now at 1.5 million units, a structural deficit, given the current economic climate and the uncertainty around tariffs, that is projected to increase even in an environment without 25 per cent tariffs.

Layer on the tariffs and a bad situation could get exponentially worse if it dries up the supply of Canadian lumber crossing the border. The U.S. imports about 30 per cent of its lumber and timber, and 80 per cent of that comes from Canada.

“Spruce-pine-fir is a preferred building material when it comes to certain components in a house,” Tobin said. “I firmly believe that we would not build as many homes as affordably in this country if it weren’t for our Canadian trade in lumber.”

Put another way, the U.S. needs Canadian wood.

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Tobin said the ideal scenario for U.S. builders and homebuyers alike would be a “free trade of lumber across our border.” But in the same breath, he said that is never going to happen, chiefly because U.S. lumber producers are perfectly content with the softwood duty status quo and are lobbying the White House to go after Canadian producers with an additional 25 per cent tariff.

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“We already have an affordable housing crisis and adding to the cost is not going to be welcome news,” he said.

Even if Trump were removed from the equation, softwood lumber duties would still be in place. They zig up and down, are annually calculated and create a measure of uncertainty among American builders and Canadian lumber towns.

Russ Taylor, a longtime Vancouver-based industry consultant and the namesake of Russ Taylor Global, said the duties and the long-running softwood lumber dispute at their core, which is now in its umpteenth iteration, initially flared in the 1980s, but was arguably a mess decades before that.

The dispute is one of those subjects that policy wonks, trade representatives and lumber players tend to prattle on about, but makes ordinary people’s “eyes glaze over,” but he’s happy to share what it’s all about.

The current softwood lumber dispute flared up when an 11-year trade agreement between Canada and the U.S. expired at the tail end of the Barack Obama administration. That agreement is now remembered as the “good old days.” Instead of paying duties, a quota was put on Canadian lumber exports to the U.S. Exceed the quota, and the producer paid a penalty.

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The agreement fostered a transparent trade environment and it was a win, or at least a workable truce, for both parties until the U.S. declined to renew the agreement.

“The industry has existed in a kind of no man’s land ever since,” Taylor said.

The U.S. position is that the Canadian lumber industry is unfairly subsidized since most of the wood that gets cut is on public land and not subject to natural “market forces.”

This is not a new complaint, as it dates back to 2004, when Canada created a system of stumpage fees, which is the amount a lumber company pays to the government to harvest trees on a given chunk of Crown land, and the fees were based on “market forces.” But in 2015, the U.S. claimed the issue had not been fixed and it is still taking the same position.

Without a trade agreement, Canadian lumber exports, much to the delight of U.S. lumber producers, fall under the purview of U.S. trade law and the Department of Commerce. Number crunchers there analyze the market on an annual basis to calculate the amount of lumber Canada sells — or, in industry parlance, “dumps” — into the U.S. at below-market cost to produce an annual anti-dumping duty.

“Think of it as a penalty,” Taylor said. “American sawmills sell below market cost, too, but they don’t get penalized for it.”

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Then there is the “countervailing duty.” It gets calculated based on the amount of government subsidies the Canadian industry allegedly receives for things such as silviculture funds, forestry investments and retraining programs for laid-off workers.

Add the two duties together and that is your softwood lumber duty for the next year, until the exercise repeats itself 12 months later.

Whenever Canada has cried foul and contested the duties at the World Trade Organization (WTO), the case has landed amid the international body’s epic backlog of cases and timely rulings are hard to come by.

“Canada generally wins these disputes at the WTO,” Taylor said. “But even when Canada does win at the WTO, the decision is already two years too late, so that whatever the damage is has already been done. Meantime, the Americans keep tightening up U.S. trade law, so it is becoming much tougher to win.”

That’s why softwood lumber duties are a fact of lumber industry life, along with inflation, high interest rates, commodity prices that dip and rise and fall again depending on what is happening in the wider economy and, lately, a fear that an additional Trump tariff could be coming on Canadian wood.

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A Canadian problem

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It is enough to turn a fellow’s hair “white,” Roger Lecours said. The third-generation northern Ontario sawmill owner and operator used to have a thick head of black hair, but it’s now white.

Black spruce cut from the nearby forests is Lecours Lumber Co. Ltd.’s bread and butter. The mill sits just north of the Trans-Canada Highway, about 30 minutes west of Hearst, a Franco-Ontarian forestry town on a stretch of road dotted with similar towns with a similar dependence on the trees.

Roughly 85 per cent of the lumber milled by Lecours travels by train through the Sault Ste. Marie border crossing to Michigan and beyond. Visit a new subdivision in, say, Texas, and there is a decent chance the houses are made with northern Ontario spruce.

The frozen ground during a northern Ontario winter allows for heavy, timber-harvesting equipment to manoeuvre and cut, and the logging trucks have been running two loads a day into Lecours yard.

“Right now, we are waiting to see where the dust settles,” Lecours said, in reference to Trump’s tariffs.

His father and grandfather forged lasting relationships with U.S. lumber wholesalers, business ties he treats with the discretion of a family trade secret, so don’t bother asking him for any names of his American contacts. Lumber, he added, is a commodity. Price volatility is simply part of the game.

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For example, lumber prices in May 2020 were barely treading water at US$345 per 1,000 board feet. A year later, the price was bumping up against US$1,700, a record high, but now the price is closer to US$575.

But what is unique about today is the Trump factor. The trade war is a wildcard few in Canada saw coming and, notwithstanding family trade secrets and longstanding relationships with American buyers, Lecours is wondering whether there will be an American market for northern Ontario spruce six months from now.

As a result, he is entertaining possible plan Bs, and selling more wood to domestic purchasers is the top choice among those options.

Liberal Leader Mark Carney has said that if Trump doesn’t want our wood, fine, Canada can use it to build 500,000 new homes a year over the next decade. That’s a big number, but so is the volume of wood Canada exports to the U.S.

Canadian forests yielded 20.3 billion board feet of lumber in 2024, and close to 60 per cent of those board feet were shipped to the U.S. Meanwhile, Canada used seven billion board feet of homegrown wood.

Canada could reasonably expect to increase its annual domestic lumber consumption to eight billion board feet, Taylor, the consultant, said, but it would involve some magical thinking to conjure a country in which all the wood that gets cut also gets used domestically.

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So, why not sell more wood overseas? Canadian mills are geared for the U.S. market and operate on the imperial system of measurement, hence the two-by-four. The rest of the planet operates on the metric system, meaning Canadian mills would need to undergo an expensive retooling to compete for global market share.

“We are a perfect fit with the U.S. market, and we always have been, which is why we are so focused on that market,” Taylor said.

Trump might be a major headache for the future of that market, but he is not the only thing keeping professional foresters awake at night.

On a cold April morning in Hearst, George Graham was talking about how it was a perfect day to run “lines” through the forest south of town. Prior to the age of GPS, a forester would put on snowshoes and “fly” across the snow-crusted landscape while marking out the spruce cut blocks and the roads that would need to be built to give loggers access to them.

Graham did a little bit of everything in the Hearst forest, but he is retired now and prepping the house he and his wife raised their kids in for sale. The exercise put him in a reflective mood.

What worries him most isn’t Canada losing its U.S. market for spruce, but Ontario losing its northern spruce forest for good.

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Spruce trees release pollen that fertilizes the cones during a narrow window in late May and early June. It is a process that kicks into gear based on a day’s length. But pollen has a shelf life and when temperatures get too warm, the pollen can’t survive. Forest geneticists predict the black spruce forest could experience reproductive failure on a mass scale by 2050.

“We take our forests for granted; they’re just trees, right? They don’t move. They don’t change. But, of course, forests do change,” Graham said. “What we’re going to see is a general progression over a few decades of that forest starting to deteriorate and not being able to compete, not being able to push off insect and fungal attacks, and experiencing reproductive failure.”

Managing a healthy, sustainable, working forest that offers up a percentage of its timber to the mills each year requires planning ahead 60 to 100 years. But the more urgent plan, he said, would involve the “assisted migration” of black spruce species that have adapted to warmer temperatures in southern Ontario and planting them in the north in huge numbers to ensure there is still a forest there to cut a century from now.

“We are really at a point now where we have got to intervene,” he said.

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Trump’s tariff threat

If that sounds alarming, the picture in Port McNeill, with or without Trump’s tariffs, seems equally bleak.

The logging side of Lemare Group’s business has shed 200 workers over the past six years, according to president Eric Dutcyvich’s best guess, and not for lack of trees.

His forest technicians have reported that they could be cutting at twice the rate they are, but the province’s regulatory misadventures have clogged the pipeline. In the meantime, jobs have been lost, and they are jobs with skillsets — such as building a road on the side of a mountain — that take years to learn and pay well.

“The engineers that design and manage the forestry work, the businesses that support them — the stores, restaurants, hotels, all of the things that you would imagine in small-town B.C. — revolve around forestry,” he said. “Having our industry struggle has been devastating for Port McNeill.”

Dutcyvich’s father came from Saskatchewan in the 1960s to work as a butcher in Port McNeill, but the store’s workers were on strike when he showed up. Instead of crossing the picket line, he headed into the woods, where he worked his way up the ladder and eventually bought his own logging operation. The company today has a civil construction arm and a forestry arm, and it is the former that has been paying the bills these days.

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The knock-on effect of less wood being cut is that there is not enough lumber for the mills, and when there is not enough lumber and not any profit to be made, mills close. Ten years ago, there were 81 sawmills in B.C. Today, there are 61.

Dutcyvich, who is also president of the local chamber of commerce and a childhood friend of Mayor Furney, said that even if allowable cut limits started being reached tomorrow, replacing the skilled workers he has lost at the flip of a switch would be impossible. Then there’s Trump.

“If tariffs come onto our products, no question, it is going to hit us hard, and every one of us is concerned, but it is not all about Trump,” he said. “What is damaging the industry — today — is instability and policy.”

Back at the mayor’s office, Furney is doing his best to stay optimistic. There is hope, he said as he looked out his window and saw only trees, millions of them, growing at a rate faster than they are being cut.

Trump will not be forever; tariffs may come, tariffs may go; bad policy can be reworked. A few weeks back, he gave a speech to a truckers’ association and he used the occasion to crib a line from The Outlaw Josey Wales, a Clint Eastwood classic.

“We will endeavour to persevere,” he said. “We will endeavour to persevere.”

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