Forest Sector Calls for Stronger Canadian Transportation Supply Chains

OTTAWA — Forest Products Association of Canada is welcoming new federal consultations aimed at strengthening Canada’s economy by addressing long-standing challenges in the country’s transportation supply chains.

The industry group says reliable, efficient and cost-effective transportation networks are essential for Canada’s forest sector to support domestic manufacturing, move goods to global markets and sustain employment in rural and Indigenous communities.

For Thunder Bay and Northwestern Ontario, the issue is especially relevant. The region’s economy is closely tied to forestry, rail, trucking, port activity and resource development. Transportation delays, high freight costs and infrastructure bottlenecks can affect mills, contractors, exporters, workers and communities across the Northwest.

Transportation Costs a Major Concern for Forest Products Sector

FPAC says the forest sector absorbs billions of dollars in freight costs each year, with most of those costs tied to rail transportation.

The association says freight costs now represent more than 15 per cent of the sector’s annual gross domestic product contribution and can account for up to 25 per cent of a shipper’s delivered product costs.

Those rising costs, FPAC says, are making it harder for forest product companies to compete in international markets.

“Canada’s transportation system continues to face three fundamental challenges — cost pressures driven by limited competition, infrastructure bottlenecks across key trade corridors, and ongoing labour instability,” said Derek Nighbor, FPAC president and CEO.
“Addressing these issues together is essential to reducing costs for shippers, improving system reliability, and supporting long-term economic growth and jobs across hundreds of forest-dependent communities.”

Why It Matters in Thunder Bay and Northwestern Ontario

Thunder Bay is a transportation hub for Northwestern Ontario, connecting rail, road and marine shipping through the Port of Thunder Bay and regional highway corridors.
For forest product producers, efficient transportation is not a side issue. It is part of the cost of getting lumber, pulp, paper, biomass and other products from northern mills to customers in Canada, the United States and overseas.

In communities across the Northwest, including areas where forestry remains a major employer, transportation costs can influence whether operations remain competitive, whether value-added manufacturing can expand and whether local jobs are protected.
Indigenous communities and businesses involved in forestry, harvesting, trucking, biomass development and supply-chain services also have a direct stake in reliable transportation networks.

FPAC Seeks Long-Term Transportation Fixes

FPAC says it is ready to engage with the federal government and industry partners as consultations move forward.

The association says Canada needs a durable and collaborative approach that improves efficiency, resilience and accountability across the transportation system.

For the forest sector, that means tackling rail competition concerns, improving key trade corridors, addressing infrastructure bottlenecks and reducing labour instability that can disrupt shipments.

Business Competitiveness at Stake

The forest products industry is one of Canada’s major resource-based sectors, with operations often located far from major urban markets. That makes dependable transportation essential to both domestic sales and exports.

When freight costs rise or rail and port systems become unreliable, northern producers can face higher costs than competitors in other jurisdictions. FPAC says those pressures are now becoming a constraint on the sector’s ability to grow and compete.

For Northwestern Ontario, where distance to market is already a built-in challenge, transportation reform could have real business implications.

A stronger national supply chain could help support mill operations, protect jobs, improve export access and encourage further investment in value-added forest products.

Policy Brief Outlines Sector Priorities

FPAC says more details on its transportation priorities are included in its policy brief, “Fixing Canada’s Transportation Supply Chains: Solutions for a Competitive Forest Sector.”

The association says the goal is to build a transportation system that better supports domestic manufacturing, export growth and economic stability in forest-dependent communities across Canada.