Ottawa’s $6.5-billion forestry plan offers support, but mills say help won’t come fast enough

The Story

Forestry industry leaders say Ottawa’s $6.5-billion funding package offers welcome support for the sector, but is not expected to save struggling mills quickly.

The federal spending plan announced last week proposes to roll out funding over six years to modernize aging mills, boost productivity and develop new products.

Despite the announcement, industry groups say the money is not expected to start flowing until 2027-28, even as U.S. tariffs, weak markets and rising costs continue to threaten jobs and operations across the country.

Derek Nighbor, president and chief executive of the Forest Products Association of Canada, called the commitment “precedent setting,” but said 2027 will likely be another difficult year as housing starts remain weak and U.S. tariffs persist.

Industry leaders described ongoing pressure from mill closures and layoffs across Canada, including recent suspensions of operations due to market conditions.

They pointed to AV Group NB Inc.’s temporary idling of its pulp mill in Nackawic, N.B., affecting about 350 workers.

They also noted Rayonier Advanced Materials halted production at its Témiscaming, Que., facility, affecting more than 300 unionized jobs.

In August, Domtar announced it would indefinitely idle its Bayview Fibre chipping facility and its Howe Sound pulp mill in Port Mellon, B.C., affecting about 400 employees.

Ken Farr, president of the Canadian Institute of Forestry, said the timing of the funding may be too late for some mills, saying, “The issue is now and the problem is now.”

Farr said the forestry sector is dealing with a “perfect storm” of U.S. tariffs, aging facilities and increasingly limited access to affordable timber supplies.

He said, “I don't think any kind of funding can be sent too soon,” adding it would help companies upgrade equipment, raise productivity and transition to higher-value wood and paper products.