U.S. Tariff Expansion Raises New Threat for Northwestern Ontario Forest Sector

OTTAWA — The Forest Products Association of Canada is warning that a proposed expansion of American tariffs could place additional pressure on forest-sector workers, businesses and communities across Canada.

The dispute matters directly in Northwestern Ontario, where forestry supports mills, harvesting operations, trucking companies, rail traffic, maintenance contractors and Indigenous-owned businesses.

Ontario says more than 97 per cent of the province’s forest-product exports are sold to customers in the United States.

FPAC Warns Tariffs Will Affect Both Countries

FPAC said Tuesday that Canadian forest products already face substantial barriers in the United States, including longstanding anti-dumping and countervailing duties on softwood lumber and newer tariffs imposed under Section 232 of the U.S. Trade Expansion Act.

Derek Nighbor, president and chief executive officer of FPAC and the Canadian Wood Council, said forest workers and communities have faced escalating U.S. trade action for too long.

“Expanding this tariff action to even more forest products categories is deeply disappointing,” Nighbor said. FPAC argues that additional tariffs will raise costs for American builders, renovators and consumers while disrupting integrated supply chains that operate on both sides of the border.

“These actions will increase costs on our American neighbours, full stop,” Nighbor said.

What the United States Is Proposing

The latest U.S. action would impose tariffs of 50 per cent on a wide range of Canadian goods beginning Aug. 19. The affected products include furniture, cement, clothing, dairy products, hockey equipment, fishing rods and other consumer and construction-related goods.

The U.S. Trade Representative says the measure would apply to almost $20 billion worth of Canadian imports. Goods already covered by separate Section 232 tariffs are exempt from the latest tariff action, meaning the treatment of individual forest products will depend on their customs classification.

Washington says the new tariffs are a response to what it considers discriminatory Canadian treatment of American vehicles, alcohol and dairy products. The Canadian government disputes that characterization and says some of its trade measures were imposed in response to earlier U.S. tariffs.

The United States previously imposed a 10 per cent Section 232 tariff on softwood timber and lumber. Separate rates were applied to some upholstered wooden products, kitchen cabinets and vanities, with higher rates taking effect Jan. 1, 2026.

Northwestern Ontario Communities Face Added Uncertainty

The national forest-products sector directly employs nearly 200,000 people and supports another 200,000 jobs in transportation, manufacturing and maintenance, according to FPAC.

Ontario estimates that more than 154,500 direct, indirect and induced jobs depend on the provincial forest sector. The province says the industry generates 23 per cent of Canada’s forestry gross domestic product while accounting for nine per cent of the national timber harvest.

For Northwestern Ontario, reduced U.S. orders or lower prices paid to Canadian suppliers could extend beyond sawmills and pulp-and-paper facilities.

The effects could reach logging contractors, truck drivers, equipment suppliers, railway operations and businesses providing fuel, repairs and professional services. Municipal governments in forest-dependent communities could also face lower economic activity if mills reduce production or delay investments.

Indigenous communities and businesses with forestry partnerships, harvesting contracts or transportation operations may also be exposed. The severity of the impact will depend on which products are covered, how American buyers respond and whether producers can find other domestic or international markets.

Housing Policy and Tariffs Moving in Opposite Directions

FPAC says the tariff expansion conflicts with U.S. efforts to increase housing construction and reduce costs.

The bipartisan 21st Century ROAD to Housing Act became law in the United States on July 11. Its stated objectives include removing regulatory barriers, expanding housing supply and lowering costs for American families.

Nighbor argues that placing tariffs on lumber, furniture and other construction materials works against those affordability goals.

Canadian forest products are part of an integrated North American construction supply chain. New duties are collected from American importers, but the commercial pressure may also be passed back to Canadian producers through reduced orders, demands for lower prices or decisions to purchase materials elsewhere.

Softwood Lumber Dispute Has Lasted Decades

The latest disagreement adds another chapter to one of the longest-running trade disputes between Canada and the United States.

Global Affairs Canada says the U.S. lumber industry has repeatedly sought restrictions on Canadian softwood lumber over more than 25 years, alleging that Canadian producers benefit from government subsidies or sell products below fair value. Canada has consistently disputed those claims and challenged U.S. duties through trade agreements and American courts.

The 2006 Softwood Lumber Agreement provided several years of relative stability, but the agreement expired in 2015. New U.S. investigations began in 2016, and duties have applied to many Canadian softwood lumber exports since 2017.

Final results from the latest U.S. administrative review of some softwood lumber duties are expected later in 2026, creating another source of uncertainty for producers.

FPAC Calls for Team Canada Response

FPAC says it will work with federal and provincial governments, labour organizations, affected industries and American business partners to defend the sector.

The association is supporting a Team Canada approach aimed at protecting workers and communities while pressing for a negotiated solution.

Canada has also introduced measures intended to help the industry diversify markets, modernize facilities and reduce costs. Federal initiatives announced in June include forest-sector projects, workforce training and efforts to increase domestic demand for Canadian wood.

For Northwestern Ontario, the immediate questions will be whether the Aug. 19 tariffs take effect as announced, which regional products are included and whether Canada and the United States can reach an agreement before further damage is done to cross-border trade.