DARRYL DYCK/The Canadian Press
A “normal” annual softwood lumber price cycle sees prices dropping from Labour Day until early in the new year when buying starts again for the spring construction season. We are also expecting three interest rate cuts this year from the U.S. Federal Reserve. With lower mortgage rates expected, will we see increasing demand for lumber? And how are the tariffs and duties impacting those prices?
Current pricing
The price of softwood lumber (Spruce-Pine-Fir, or SPF, per thousand board feet, or mbf) dropped more than 20 per cent in August due to stockpiling in anticipation of higher prices from tariffs. Lumber prices dropped from US$695 to US$595 on weaker demand against this higher supply. A balance is not expected until the 2026 spring building season, pending economic conditions and supply-side management.
Front month CME lumber futures (Western SPF) are trading US$520 to US$530 per thousand board feet today and the curve is in mild contango (meaning higher future prices) into early 2026 near the US$620 to US$630 per thousand board feet range.
Tariffs and duties
In August, 2025, the U.S. Commerce Department finalized anti-dumping duty rates for most Canadian producers at 20.56 per cent and countervailing duty rates from 12.1 to 16.8 per cent for major firms.
For Canfor Corp. and its affiliates, the anti-dumping rate is 35.53 per cent and the countervailing duty rate is 12.12 per cent, totalling 47.65 per cent. West Fraser Timber Co. Ltd. now has a 9.65 per cent anti-dumping duty rate and a 16.82 per cent countervailing duty rate, while Interfor Corp. has a 20.56 per cent anti-dumping duty rate and 14.63 per cent countervailing duty rate.
On March 1, 2025, U.S. President Donald Trump issued an executive order requiring the U.S. Secretary of Commerce to conduct a Section 232 investigation to determine the effects on national security of imports of timber, lumber and their derivative products from all countries, including Canada. The U.S. Department of Commerce initiated the probe on March 10, 2025, officially starting the 270-day clock with an expected report deadline of November 26, 2025.
B.C. businesses call U.S. decision to double Canadian softwood duties harmful to both countries
The basis of the imposed tariffs are a 1970s-era national security law, the International Emergency Economic Powers Act that grants the president the authority to declare a national emergency and then regulate or prohibit international commerce in response to unusual and extraordinary threats to national security.
Last week, the U.S. Court of Appeals, in a 7-4 decision, ruled that while the law gives the president significant emergency powers, “none of these explicitly include the power to impose tariffs, duties, or the power to tax.” Based on that ruling, Mr. Trump asked the Supreme court to review the court of appeal decision.
In response to the tariffs, Prime Minister Mark Carney unveiled a $5-billion strategic fund on Friday aimed to bolster Canadian industries including lumber, steel and autos. “We need to use government procurement using Canadian taxpayer dollars to spur Canadian businesses for longer term prosperity,” he said. The “Buy Canada” initiative calls for prioritizing domestic materials and labour in government projects to reduce dependency on U.S. trade.
Supply
Our lumber production has been dropping over the past decades from approximately 80 million cubic meters (m3) in 2006 to just over 50 million m3 currently. Canada’s growing stock (which is total wood volume available calculated as hectares available multiplied by m3/hectare) is on the order of 50 billion m3, in 2020 figures, with sustainable wood supply consistently exceeding actual harvest each year.
Interfor, a major Canadian lumber producer, announced a production curtailment of approximately 145 million board feet through to the end of the year. The firm will reduce output through schedule restructuring, maintenance and extended shutdowns.
We are also seeing a capacity shift from Canada to the southern United States. The U.S. South’s share of North American capacity rose from 25 per cent in 2009 to 38 per cent in 2024. Western Canadian capacity fell more than 25 per cent over that period. West Fraser, Canfor, Interfor have shifted capacity to the U.S. South in pursuit of lower fibre costs, private timber and policy certainty. In August, 2025, Canfor permanently closed its Darlington and Estill, South Carolina, facilities in response to sustained losses and weak market conditions.
Demand
Canadian lumber imports account for 24 per cent of U.S. lumber consumption (about 12 billion board feet) which represents about 66 per cent of our total lumber exports currently. U.S. Treasury Secretary Scott Bessent recently said Mr. Trump may declare a national housing emergency this fall.
According to Zillow, the U.S. is now short 4.5 million homes as the housing deficit grows. In May of this year, U.S. housing starts fell by 9.8 per cent to a seasonally adjusted annual rate of 1.25 million units.
Analysts’ outlook
The short term outlook for lumber prices continues to see weakness with price projections as low as US$450 per thousand board feet until the spring construction season. Looking into 2026 and 2027, prices are expected to recover to the mid-US$500 to low-US$600 per thousand board feet range. Ongoing duties, the upcoming court rulings on tariffs and the protracted housing shortage will all impact the price of lumber over the next two years.
Brian Donovan, CBV, is the president of StockCalc, a Canadian fintech based in Miramichi, N.B.