The following piece, by ICBA Chief Economist Jock Finlayson and consulting economist Ken Peacock, was first published in Business in Vancouver on March 19, 2026.
The economic crisis gripping British Columbia’s forest industry shows no signs of easing. As the landlord and owner of the vast majority of forested land in the province as well as the regulator that largely determines how the industry operates, the provincial government is in the firing line as mills close and thousands of jobs disappear in the various segments of the sector – logging, wood products manufacturing, and pulp and paper production.
Whenever questions arise about the calamity unfolding in forestry, the Premier and his hapless Minister of Forests are quick to finger U.S. tariffs as the culprit. In reality, the unprecedented downturn in B.C.’s forestry sector has three main causes. American tariffs are one of them. Unfortunately, history teaches that there is little B.C. can do to influence the course of U.S. trade policy. The other two factors pummeling the industry are primarily “home-grown” problems that reflect decisions made in Victoria: (i) a stunning decline in the supply of fibre, and (ii) the emergence, over time, of an increasingly complex, costly, and ever-changing regulatory environment. Together, these trends have made British Columbia a virtual “no-go” zone in which to deploy capital across all parts of the forest industry supply chain.
B.C.’s softwood lumber exports to the U.S.— and other markets—have been grinding lower since 2016. By 2024, before Donald Trump returned to office, B.C.’s southbound softwood lumber exports had plunged by 42 per cent compared to 2016. The Trump-driven expansion of softwood tariffs contributed to a further 14 per cent y/y reduction last year.
From a broader Canadian perspective, the sharp downturn in lumber exports is unique to B.C. In the rest of Canada, softwood exports to the U.S. trended higher until last year, when they fell under the weight of increased American tariffs and sluggish U.S. housing starts. The relative stability and very modest decline of lumber exports from other provinces stand in stark contrast to the staggering drops in production volumes and exports in B.C. Pretending that mill closures, escalating job losses, and capital flight from the forest industry are due to U.S. tariffs conveniently ignores the role that political and policy choices in Victoria have played in the ongoing demise of what used to be British Columbia’s biggest export industry.
In addition to decrying the Trump Administration’s tariffs, recent spin from the Eby government has emphasized the importance of nurturing alternative markets for the province’s forest products. That makes sense. But the numbers indicate that diversification will be a hard road. Dire financial conditions in the industry, a shrinking fibre supply, and growing chaos and uncertainty on the land base owing to the NDP’s incompetently executed “reconciliation agenda” all suggest that building non-U.S. export markets will be neither quick nor easy. The same domestic policy choices that have made B.C. uncompetitive vis-à-vis other North American lumber producing regions have also hurt our ability to sell profitably to offshore markets.
Indeed, B.C.’s softwood lumber exports to all non-U.S. markets combined have plummeted since 2016. Specifically, wood products exports to China have collapsed by 80 per cent while shipments to Japan are down by more than 60 per cent from 2016 levels. There are a number of reasons for these pronounced declines in offshore shipments, but the poor “hosting conditions” for investment as well as logging activity and lumber production in B.C. are a central part of the explanation.
In 2025, the United States purchased 75 per cent of B.C. softwood exports. China accounted for 9.6 per cent and Japan for 6.8 per cent. Given the dominance of the U.S. market and the erosion of Asian demand for B.C. wood products, significantly moving the dial on diversification is a daunting prospect, particularly in the near-term. While the government is right to encourage market diversification, more pressing tasks for B.C.’s stumbling policymakers are to boost fibre supply and overhaul regulatory and administrative practices to reduce operating costs and narrow the competitiveness gaps that have opened up between B.C. and other North American producing jurisdictions.