What is the role of the forestry industry in Canada's economy?

Forestry is one of Canada's foundational industries, contributing about $25 billion to gross domestic product and supporting more than 200,000 direct jobs in 2023. Canada is the world's largest exporter of softwood lumber and northern bleached softwood kraft pulp, with major customers in the United States, China, Japan, and the European Union. The forest sector includes softwood lumber, pulp, paper, newsprint, oriented strandboard, plywood, engineered wood products, biomaterials, and bioenergy.

The industry is concentrated in five provinces. British Columbia is the largest, producing about half of Canadian softwood lumber from Douglas fir, western hemlock, western red cedar, and lodgepole pine. Quebec, Ontario, and Alberta operate large boreal-forest harvesting and milling operations, with major employers including Canfor, West Fraser Timber, Resolute Forest Products, Domtar, Mercer International, Cascades, and Kruger. New Brunswick's forestry sector centres on J.D. Irving Limited's integrated operation that spans timber tenures, sawmills, pulp and paper mills, and shipping.

Federal-provincial forest tenure is the foundation of the industry. About 90 per cent of Canadian forest is publicly owned, with provinces granting long-term tenures to companies in exchange for stumpage fees, reforestation obligations, and silvicultural management. Crown forest in British Columbia is regulated under the Forest Act and the Forest and Range Practices Act. Provincial Crown corporations including BC Timber Sales and Quebec's Bureau de mise en marche des bois auction timber rights. The Canadian Boreal Forest Agreement of 2010 between major forestry companies and environmental groups committed to suspending logging on 29 million hectares of caribou habitat (the agreement formally ended in 2017 but its principles remain influential).

The softwood lumber dispute with the United States has recurred in five rounds of duties since 1982. Current US countervailing and anti-dumping duties on most Canadian softwood lumber exports run to about 14 to 20 per cent, with court challenges under both NAFTA's Chapter 19 and CUSMA's Chapter 10 and the World Trade Organization. Climate change is reshaping the sector through wildfires (the 2023 wildfire season was the worst on record at 18.5 million hectares burned), the mountain pine beetle infestation that killed about 50 per cent of British Columbia's mature lodgepole pine, and policy shifts toward old-growth forest protection. Indigenous-led forestry has grown through joint ventures, equity stakes, and Indigenous-managed tenures.