Saskatchewan welcomes Ottawa’s $1.2B lumber aid as industry braces for tariffs

“The support that was announced is all meaningful and will be helpful,” Balisky said. “They’re not going to solve any issues immediately, but longer term… with the housing program and building using products built in Canada — it’s going to be helpful for sure.”

As the largest First Nation-owned lumber mill in Canada, NorSask has been dealing with U.S. countervailing and anti-dumping duties since 2017.

While Balisky didn’t share exact figures for NorSask, he noted the U.S. government has collected about $10 billion in duties from Canadian lumber exporters over the past eight years. Should the new tariff increase “beyond a certain point — certainly it’s a showstopper.”

Half of NorSask’s lumber is shipped to customers in the U.S. Midwest, a market Balisky said is “challenging,” but crucial. However, diversifying away from the U.S. isn’t a realistic option for NorSask, as its inland location makes overseas trade expensive and logistically difficult.

“We’re too far away from the port,” Balisky said. “That’s easier for companies in British Columbia and Atlantic Canada. We’re kind of stuck in the middle of the country.”

In British Columbia, forest products company Tolko Industries Ltd. said it is “encouraged by the opportunity to Build Canadian.”

“This is a welcomed acknowledgement of the importance of forestry to Canada’s economy, the hundreds of thousands it employs and the communities it supports,” said Pino Pucci, Tolko President and CEO in a statement to employees.

“We’re encouraged by the opportunity to Build Canadian and excited to learn more about opportunities to leverage domestic innovations and enable Indigenous partnerships across our industry.”

Across the industry, there’s cautious optimism — but also concern.

Eric Johnson, vice-president of federal government relations with the Forest Products Association of Canada (FPAC), said the federal aid package is thoughtful and appreciated, but ultimately a stopgap.

“We feel they struck the right chord,” he said. “These are towns and communities that are saved by this action.”

He said the loan guarantees will help mills make financial decisions and maintain jobs in forestry-dependent communities, while the program funding will improve access to innovation support.

“They’re always oversubscribed, so the additional funding will allow for more companies to get access to things that will help them improve capacity [and] improve their efficiencies to create and develop new products.”

But the unresolved trade dispute with the United States remains a major threat.

U.S. President Donald Trump recently raised tariffs on Canadian goods to 35 per cent if they are not compliant with the Canada-United States-Mexico Agreement on trade, known as CUSMA.

In a statement, Carney said: “The U.S. application of CUSMA means that the U.S. average tariff rate on Canadian goods remains one of its lowest for all of its trading partners. Other sectors of our economy — including lumber, steel, aluminum and automobiles — are, however, heavily impacted by U.S. duties and tariffs.”

Earlier this year, Trump also launched a new national security investigation — known as a Section 232 probe — that could push duties above 50 per cent.

“If the federal government in the U.S. deems that under 232 there is some national security reason why they shouldn’t be importing lumber and derivatives from Canada, then we could be seeing over 50 per cent tariffs,” Johnson said.

“What the threat does is it cools any investment possibilities in the country until it’s resolved.”

According to the White House, Trump signed the executive order on April 15 to investigate the national security risks posed by U.S. reliance on imported processed critical minerals and their derivative products.

He also signed similar executive orders launching investigations into how imports of copper, timber, lumber, and their derivative products threaten America’s national security and economic stability.

Johnson said that while FPAC is working closely with the federal government, Canada must push for a long-overdue softwood lumber agreement with the U.S. to set clear rules and limit duties.

“We are incredibly appreciative of the measures and the thoughtfulness that [Carney’s government] undertook to get here,” he said. “But at the same time, we need to be focused on negotiating a resolution to the current softwood lumber dispute to ensure the viability of Canada’s forest sector.”

Johnson emphasized that Canada’s forest sector is deeply integrated, supporting pulp and paper, energy and other industries. In 2024, it contributed $21 billion to Canada’s GDP, representing about five per cent of the country’s total exports. The U.S. alone imports about $28 billion in forest products from Canada, including $7.7 billion in lumber.

“What the Prime Minister has done has ensured that a number of those jobs and communities will remain viable. But without a resolution, they’re ultimately still at risk.”

Despite efforts to diversify exports — including partnerships with Japan, Korea and other parts of Asia — Johnson said the U.S. market remains irreplaceable.

“Their consumption of our lumber is just beyond the scale of what we could do anywhere else,” he said. “The history between the two countries is just too great and the relationship is too strong to say that we could ever diversify completely away.”

He added: “We are Better Together. We just need to figure out what ‘together’ means moving forward.”

For Balisky, that future includes continued support for Indigenous-owned operations like NorSask.

“We expect to have lots of good support and what Carney has announced certainly heads in that direction,” he said. “So we’re pleased with the announcement.”

– With files from The Canadian Press

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Kenneth.Cheung@pattisonmedia.com

by Kenneth Cheung

Saskatchewan welcomes Ottawa’s $1.2B lumber aid as industry braces for tariffs

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