How reliant is the U.S. on Canadian lumber?

[00:00:00]The US president is targeting certain wood and lumber products in his latest threats of tariffs, but a recent Bank of Canada report suggests lumber exports have shown some resiliency even the face of the president's contentious trade policies. To talk about Canadian lumber, we've reached Professor Harry Nelson with UBC's Department of Forestry and Environmental Stewardship. Harry, first of all, how has Canada's lumber industry fared this past year?

[00:00:27]>> It's managed to stay alive, Dan.

[00:00:30]Um especially in BC. I mean, we've seen exports and production come down, but it's kept going, which is I think remarkable given, you know, the trade pressures and just, you know, the kind of constant barrage of uncertainty as to what will happen next.

[00:00:47]>> Certainly, there has been an impact when we see with a number of mills that have shut down and the people out of work.

[00:00:52]We'll get to that in a in a moment. Has the US in turn like have they just turned to other markets or they still relying on Canadian lumber and under and still buying it?

[00:01:02]>> No, they're still very much relying on Canadian lumber. We still supply at least a good 80% of their imports.

[00:01:08]They're not capable of producing all the lumber that they need.

[00:01:11]There's been a little bit of they've picked up some additional volumes from Europe and Latin America, but at the end of the day, they still and they're supplying a bit more from their own mills down in the US South mainly, but that's not enough to meet their overall demand.

[00:01:28]So, we're still an important part of their supply.

[00:01:31]>> And in turn, what has the Canadian industry done if with the the number or the the volume of tariffs and and the back and forth that have happened and we've seen these mill closures, are we searching out and and successfully finding other markets?

[00:01:46]>> We're trying. It's hard. I mean, you can think of this sort of this kind of you know, 80 depends which province you are. Somewhere from 75 to 85% of all exports and most of the wood we produce is exported goes to the US.

[00:02:00]So, you know, we've shipped a bit more.

[00:02:03]China's picked up and taken a bit more from us. We're trying to find other markets, but the sheer volume of the wood that you're trying to move, it's like an ocean tanker, you know, you can't cannot turn quickly.

[00:02:14]So, we're and that will not be something that does happen quickly either.

[00:02:19]>> As we've mentioned, we've seen mills close and many jobs lost throughout BC in the last year among other places in this country. You said you surprised by the resilience.

[00:02:28]Do you have a sense of the future of the industry in this province and and this country?

[00:02:34]>> I you know, I am optimistic though I think it's going to be tough for a long time and I do think things will probably, I hate to say, still get a bit worse here in BC.

[00:02:45]You know, we're kind of facing this perfect storm of weak markets in the US and at the end of the day that really is probably one of the most important things going on if US housing demand pretty flat, lumber prices are low and you know, you're starting kind of in a hole there. Add on the tariffs, add on losing pulp mills, losing parts of the supply chain and I think we are still going to see the industry unfortunately get smaller as it kind of reconfigures itself, I guess, to both to um figuring out kind of what that new market circumstances look like and in some places we're going to have to rebalance to what kind of is physically available in terms of harvesting.

[00:03:25]You know, we were sort of working through the aftermath of the beetle and all that and I think now we're finally sort of those realities are hitting home.

[00:03:34]>> All right, UBC forestry professor Harry Nelson, we appreciate your time and insight. Thank you for joining us.

[00:03:40]>> Thank you, Dan.