Canadian Forest Sector Transformation Task Force Report: What Will it Mean for the Building Materials Industry

The Canadian Forest Sector Transformation Task Force report, Canada's Transformed Forest Sector: Competitive Resilient Relevant, provides the government of Canada with a “playbook” to restore the competitiveness of Canada's forest sector and strengthen its contribution to the national economy.

How the Report Outlines the Current Situation of the Forestry Sector

The report assesses Canada’s forestry sector as declining in competitiveness. Despite possessing nearly 9% of the world's forests Canada has experienced a reduction in lumber and pulp production over the past two decades, shrinking employment, mill closures, and reduced investment. For example, in Canada, between 2022 and February 2026, 23 sawmills closed, and more than 70 others have announced temporary curtailments. Softwood lumber production has fallen 42% since 2004. The report identifies several contributing factors to this reduction which includes U.S. duties and tariffs on softwood lumber, transportation and harvesting costs, regulatory complexities, and uncertainty surrounding long-term access to timber supply.

What the Report Recommends?

Several of the report's recommendations demonstrate how a stronger forest sector could help Canada achieve its housing and infrastructure objectives including:

1. A proposed $10 billion Forest Sector Transformation Investment Fund that acts as a financing tool aimed at modernizing aging mills which, in turn, would allow Canada’s building material industry to produce a wider range of building products (e.g., dimensional lumber, mass timber, engineered wood products, and prefabricated components).
2. To expand wood use in construction. The report calls for reforms to the National Building Code to normalize wood construction up to 18 storeys, focus Modern Methods of Construction on wood-based prefabrication, and create standardized pre-approved building designs to reduce waiting periods.

What This Means for the Building Materials Industry?

While the report is focused on forestry its recommendations have implications for the building materials industry as many wood-based materials are used to build (e.g., engineered wood, structural panels, building components, millwork, trusses, prefabricated systems, and mass timber products). Housing construction accounts for approximately one-third of Canadian softwood lumber consumption, while non-residential construction accounts for roughly one-quarter. If the federal government intends to support the construction of 500,000 homes annually demand for wood-based materials will increase substantially.

A stronger and more competitive forest sector improves supply chain reliability, encourages investment in domestic manufacturing capacity, and supports the development of higher-value wood products.

Successful implementation of the report's recommendations would help secure a long-term supply of Canadian wood products, support innovation and manufacturing growth, strengthen domestic supply chains, and help meet Canada's future housing and infrastructure needs.