Price of wood products in Canada - Data and Analysis (1981-2032)

The price of wood products in Canada is expected to rise 2.1% to 120.1 in 2026, driven by supply constraints as trade barriers have forced widespread mill curtailments and closures. Average US duties on Canadian softwood lumber more than doubled in the summer of 2025, climbing from 14.38% to 35.19%. In October 2025, a 10.0% Section 232 tariff that was not CUSMA-exempt was added on top. According to Forest Economic Advisors, North America has lost over 1 billion board feet of capacity because of mill closures in 2026, mostly in Canada. From 2021 to 2026, wood product prices have been highly volatile, though they have declined at an annualized rate of 0.1% overall. Prices surged early in the period as low interest rates, cash inflows from federal aid, and an increase in remote work spurred residential construction. Spikes in demand were compounded by limited lumber availability, putting upward pressure on prices. Prices then fell by 15.0% in 2023 as the Bank of Canada's interest rate hikes in 2022 and 2023, along with recessionary fears and mounting affordability concerns, suppressed construction investment. Volatility began to ease in 2024 as the index largely finished normalizing, though it has remained significantly elevated above pre-pandemic prices.Despite extreme price swings over the last five years, long-term growth has moderated as market forces gradually adjust to a new equilibrium marked by fluctuating demand and persistent trade friction. Despite trade tensions with the US and tariffs on Canadian wood, the industry has been able to rely on growing construction activity in China and other Asian regions. However, elevated interest rates have kept larger projects tempered in the latter half of the period, as this increases the cost of borrowing.