Industry News

March 24, 2017 - The province of British Columbia is setting aside nearly $750,000 to help people living in the Revelstoke and Shuswap areas find jobs in the forestry sector. Up to 16 people will be trained and prepared for employment through this opportunity. “This is a great opportunity for local people to gain new skills, which will help them find work in the forestry sector through hands-on experience,” said Todd Stone, MLA for Kamloops-South Thompson and Minister of Transportation and Infrastructure, in a news release. The funding is being provided through a paid training opportunity with Okanagan College. The training provided will include skills such as tree falling, machine work, forestry technology, and risk management, as well as practical job preparation skills. “Forestry is an industry that brings great opportunities for people to build their careers through knowledge and hard work, and I’m excited to know the future is bright for the industry and for the participants in this project,” said Greg Kyllo, MLA for Shuswap and Parliamentary Secretary for the BC Jobs Plan, in the release. B.C.’s forest industry employed nearly 60,000 people in 2016 and contributed $5.5 billion to the province’s economy in 2015.
March 24, 2017 - Tembec announced Friday a four-year $136 million capital investment program in its Quebec facilities to improve competitiveness, centered on its specialty cellulose pulp operation at the Temiscaming manufacturing site. Tembec is a leading global producer of specialty cellulose – processed from wood pulp – used to bind, strengthen, thicken and generally improve a great many products in the pharmaceuticals, cosmetics, foods, coatings, electronics, construction and energy industries. Some sectors of the specialty cellulose market are experiencing annual growth in the four per cent range. This investment qualifies Tembec to benefit from electricity rebates applicable to large industrial power users under the Electricity Discount Program for Consumers Billed at Rate "L". Tembec will be reimbursed for an amount of up to $55 million, representing 40 per cent of the $136 million investment. The program, introduced in the Government of Quebec's 2016-2017 budget, applies to significant investments in the four-year period up to the end of calendar 2020 which increase productivity or improve energy efficiency. "I want to acknowledge the significant support of the Government of Quebec for investment projects which improve the long-term competitiveness of Tembec's manufacturing operations in Quebec. Tembec is committed to maintaining a leadership position in the forest products industry, and today marks another major step toward that objective," said James Lopez, Tembec's President and Chief Executive Officer. "It is critical to rely on innovation and modernization to promote the long-term strength of Quebec's forest products sector, to assure a sound future for our businesses, our workers and our communities. For this reason, our government works closely with companies to contribute to creating the conditions that allow them to achieve these ends. I salute the initiative of Tembec, a longstanding mainstay of the Quebec forest products industry, and a sustainability leader in this field," said Luc Blanchette, Quebec Minister of Forests, Wildlife and Parks. The proposed investments will cover a number of upgrades at the Temiscaming site, including the long-planned replacement of 11 existing pulp digesters, a project required for the site to remain competitive in global markets. Work is already underway, with one digester replaced to date. Some of the new investment also will go toward reducing greenhouse gas emissions, as part of Tembec's long-term commitment to reducing its impact on climate change. The Temiscaming site's high-yield pulp and coated bleached board manufacturing facilities will also benefit from new investments as will the Matane high-yield pulp facility. The Temiscaming site is supplied mainly with wood fiber from local forests and sawmills in the Abitibi-Témiscamingue region. Tembec has a total of some 1,500 employees in Quebec of which 800 work at the Temiscaming site.   Tembec is a manufacturer of forest products – lumber, paper pulp, paper, and specialty cellulose pulp – and a global leader in sustainable forest management practices. Principal operations are in Canada and France. Tembec has approximately 3,000 employees and annual sales of approximately $1.5 billion. Tembec is listed on the Toronto Stock Exchange (TMB).
March 24, 2017 - A Fleming College Urban Forestry Technician (UFT) student has received the prestigious Prince of Wales Forest Leadership Award. Reginald Eddy, in semester five of UFT, was one of two Canadian students to receive the award, which includes a $12,000 bursary and the opportunity to travel on exchange to the United Kingdom to complete a forest internship. The award, handed out through the Canadian Institute of Forestry, is offered to recent graduates or any student studying forestry in Canada at the diploma, undergraduate degree or master’s degree level. Eddy has made history as the first diploma student to have ever been selected for the award. “Having an opportunity to work in the Duchy of Cornwall, an incredibly historic and well-managed private estate, is something I can barely imagine. I am looking forward most, to being emerged in such a culturally significant part of the United Kingdom,” said Eddy. “My take away, I hope, will be a more encompassed understanding of the forestry industry and the addition of international connections in my professional network.”   “This is an incredible achievement for Reg, for our program and for Fleming College. We are so proud of him,” said Tom Mikel, Coordinator of Fleming’s Forestry and Urban Forestry Technician programs. The Urban Forestry Technician Co-op program is offered at Fleming’s Frost Campus within the School of Environmental and Natural Resource Sciences. Fleming’s UFT program was designed as a unique diploma-degree program in partnership with the University of New Brunswick (UNB). Students spend two years at Fleming and two years at UNB and graduate with both a diploma and a degree in just four years.
March 22, 2017 - Foresight Cleantech Accelerator Centre and FPInnovations have announced three winners in the initial stage of the FPInnovations-ARCTIC Forest Inventory Challenge — Arbonaut Oy, Lim Geomatics Inc., and Object Raku Technology — a program designed to accelerate innovative technologies to support sustainable forest managements and job creation.Selected from a pool of global innovators, the three winners will use the funding to continue developing their remote-sensing solutions for conducting forest inventories over the next six months with the support of Foresight’s mentor network. One company will then be selected for additional funding and will be invited to field test their technology in western Canada. The winner will be announced in mid-2017.“Studies indicate that improving quality and frequency of data collection using next-generation remote sensing solutions can save approximately $100 million per year for the British Columbia forest sector. These solutions are expected to provide accurate information on the species, size and quality of the trees in the forests at a lower cost than currently possible. They will also positively contribute to environmental and wildfire management planning,” according to a statement from the parties. “The technologies developed by these companies have the potential to deliver both environmental and economic benefits,” said Neil Huff, managing director of Foresight. “Not only will they help Canadian forestry companies reduce their environmental impact, but they will potentially create local manufacturing jobs, build capacity, and drive the need for locally sourced equipment and services.”“The forest sector is currently facing many exciting challenges that have the potential to be resolved using the right mix of technology, research and innovation,” added Pierre Lapointe, president and CEO of FPInnovations. “The FPInnovations-ARCTIC Forest Inventory Challenge demonstrates the incredible opportunities available to high-tech companies interested in working hand-in-hand with the forest sector to explore new approaches to complex issues.”
March 22, 2017 - Ontario Provincial Police announced that a woman was arrested in Sudbury on Monday at a logging road blockade.The 60-year-old protester was detained and charged with causing mischief and failing to comply with conditions of an undertaking, The Canadian Press reported.OPP said the woman is scheduled to appear in court in Sudbury on April 5. | READ MORE
March 20, 2017 - Nova Scotia is adopting changes to the National Building Code, which include increasing the maximum height of wooden residential buildings from four to six storeys. The Fire Safety Act and Regulations will also be changed to enhance safety requirements for the taller wood buildings. "These changes will align the provincial building code with the latest National Building Code standards," said Zach Churchill, Minister of Municipal Affairs. “Allowing taller wooden buildings will open up new, sustainable opportunities for the forestry sector in our province.”The province is also updating its own accessibility regulations to improve barrier-free provisions in washrooms, requirements for power door operators and barrier-free paths of travel. “Nova Scotia's accessibility requirements are stricter than the ones in the National Building Code,” said Mr. Churchill. “I want to thank the disability community for their feedback on the building code changes, which will improve barrier-free design in our province.”The changes will come into effect on April 1. The province consulted on building code changes with representatives of persons with disabilities, the construction industry, building officials, and other industry groups. It was a complementary process to the ongoing Accessibility Act consultations.For more information on the regulations, visithttps://novascotia.ca/dma/firesafety/BuildingCode/.
March 23, 2017 - The latest WOOD MARKETS annual survey of the "Top 40" Canadian and U.S. softwood lumber producers featured steady production growth in 2016 due to the cooperation of a strong U.S. market, plus growth in China. Amid an absence of any major mill acquisitions, almost all of the production gains came from existing mills. Of the top forty companies, only three in Canada and four in the U.S. recorded any production declines – a sign of a good year. These and other industry highlights were recently released in the March 2017 issue of WOOD Markets Monthly International Report. The consultants at International WOOD MARKETS Group, Vancouver B.C. have conducted this survey annually since 1997. The Canadian top 20 lumber companies saw their output rise from 19.6 billion bf in 2015 to 20.45 billion bf last year, while their share of national production slipped to 72% (from 74%). However, Canadian mill investments in the U.S. South are proving very strategic due to the ample timber supply in the region and high sawmilling margins (the result of low timber prices). As well, with U.S. duties being implemented on Canadian lumber shipments commencing in May, Canadian mill ownership in the U.S. is looking to be a very astute move. While there was no U.S. sawmill acquisition activity in 2016 by Canadian companies, the current collective U.S. mill count of West Fraser, Canfor and Interfor — 39 mills in all — allows their sawmill operations to enjoy excellent diversification. Turning to the ranking of the top 20 Canadian firms, 12 were based in Western Canada and collectively produced 14.7 billion bf (52.0% of Canada’s shipments); this was higher by 390 million bf (+2.7%) than in 2015. Production for the top eight eastern Canadian producers was 5.7 billion bf (20.1% of Canada’s shipments), up 445 million bf (+8.4%) from the prior year. The top five Canadian producers were as follows: West Fraser, Canfor, Tolko, Resolute and Western Forest Products. Of note, West Fraser surpassed Canfor as Canada’s top lumber producer — a position the former last held in 2011. Collectively, the top five raised their production to 12.3 billion bf (43.0% of Canadian lumber output), versus 12.0 billion bf (45.1%) in 2015. West Fraser inched up to lead spot, raising its output by 197 million bf (to 3.80 billion bf; +5.5%) at its 13 mills. Canfor dropped to second position with 3.79 billion bf and recorded a decline in output of 42 million bf (-1.1%). Tolko placed third, with its output falling by 63 million bf to 1.90 billion bf (-3.2%) as it cut production by half at its Quesnel, B.C. mill beginning in October 2016 (it also closed its Merritt, B.C. mill in Q1/17). Fourth-place Resolute gained 166 million bf (+9.9%) to reach a healthy 1.84 billion bf. Western Forest Products saw its output expand by 52 million bf (to 943 million bf). In the U.S., total lumber shipments of the top 20 companies rose from 19.7 billion bf to 20.9 billion bf (+6.3%). The top 20 U.S. companies increased their output at a pace that was almost twice that of the entire U.S. industry and 50% more than that of the top 20 Canadian companies. The top 20 firms produced 63.9% of all U.S. softwood lumber shipments in 2016 (versus 62.1% in 2015). Despite the lack of export duties on Canadian lumber in 2016, the larger U.S. sawmills enjoyed excellent results. This growth indicates the rising confidence of the largest U.S. producers (including Canadian owners) in the housing market recovery and corresponding lumber consumption growth. The other apparent driver behind these growth strategies (on both sides of the border) was the need to improve cost-competitiveness by driving down costs and increasing efficiencies. As In 2015, Weyerhaeuser retained its first-place U.S. position through a moderate increase of 230 million bf to 3.64 billion (+6.7%). Weyerhaeuser’s acquisition of Plum Creek Timber was the blockbuster deal of the year: it included two sawmills (with timberlands that are now the core assets of the combined companies with a total of 13 million acres of forests). Georgia-Pacific remained in second position with an estimated 2.5 billion bf (+6.9%). In third place was West Fraser, growing its production by 131 million bf to 2.14 billion bf (+6.5%) as a result of the rebuilt Quincy mill being in operation for the full year. Sierra Pacific was in fourth spot with production down 22 million bf to 2.01 billion bf (-11%). Interfor retained its fifth-place spot with production of 1.61 billion bf, a decrease of 101 million bf (-5.9%) The top five U.S. firms produced 11.9 billion bf, representing 36.3% of all U.S. lumber shipments, a slight (3.5%) increase from 2015. Four of the largest North American softwood lumber producers have operations in both the U.S. and Canada. These publicly traded companies were positioned in both the top six in Canada and U.S. for last year (the percentage of their 2016 U.S. lumber production is shown in brackets): Weyerhaeuser (81%), West Fraser (36%), Canfor (26%) and Interfor (65%). “When comparing the earnings (EBITDA) amongst the four companies,” noted Russ Taylor, WOOD MARKETS’ President, “Weyerhaeuser’s above-average earnings since 2014 is noticeable (and has the highest percentage of U.S. mill assets) and this does lead to a timely question: why is the U.S. claiming that Canadian mills are subsidized when Weyerhaeuser is achieving such exceptional financial results with only 19% of its mill production in Canada?” The other three Canadian-based companies achieved lower earnings than Weyerhaeuser over the same three-year period and have more Canadian-based mills than Weyerhaeuser (details are provided in the full article). More food for debate! The wild card for 2017 is the imposition of U.S. duties on Canadian lumber starting in early May. This is expected to negatively impact Canadian production (and U.S. exports) and benefit U.S. sawmills (and timberland companies). This will be discussed at length at WOOD MARKETS’ Global Softwood Log & Lumber Conference, to be held in Vancouver on May 11, 2017. The complete Top 40 List and further analysis are available to subscribers of WOOD Markets Monthly International Report.
March 21, 2017 - Over the past ten years, there has been a clear shift in fibre-sourcing for pellet manufacturers in the U.S. South from logs to residues. In 2008, when the first large pellet plant was built, practically all fibre consumed by this plant was low-quality small-diameter logs from adjacent forests. This fibre source is a high-cost fibre furnish since it needs to be chipped, hammered and dried before it can be processed to pellets, which adds substantial cost to the manufacturing of pellets.Increasingly, pellet plants throughout the southern states have turned to sawmill by-products and forest residues that in the past have been left at the harvesting sites. The North American Wood Fiber Review (NAWFR) has for the past five years tracked the fibre sources for the pellet industry each quarter in the two major producing regions of North America - British Columbia and the U.S. South. There have been two clear trends: In British Columbia, pellet companies have moved from entirely relying on inexpensive sawdust from the local sawmills for its fibre furnish to increasingly supplementing its dominant fibre source with forest residues in the form of tree tops and branches left after harvest operations. In the U.S. South, there has been an increase in the usage of residuals at the expense of roundwood. In the 1Q/17, pellet plants in B.C. consumed just over 82 per cent sawmill residues, while forest residues accounted for about 17 per cent. With the expected reduction in lumber production in the province in the coming years, pellet plants will increasingly have to rely on forest residues and low-cost logs for their furnish since the available supply of sawmill by-products will diminish.In the U.S. South, the fibre sourcing trend is the opposite of British Columbia with expected increases in the usage of sawmill residues as the lumber production is likely to expand in the future. From the 1Q/13 to the 1Q/17, the usage of industry and forest residues increased from 33 per cent to 47 per cent of the total fibre furnish for the pellet industry, according to the NAWFR. This upward trend is expected to continue, especially in regards to the usage of sawdust and microchips (chips manufactured from tree tops, tree branches and small-diameter trees from forest thinnings). The North American Wood Fiber Review (NAWFR) has tracked wood fibre markets in the U.S. and Canada for over 30 years and it is the only publication that includes prices for sawlogs, pulpwood, wood chips and biomass in North America. The 36-page quarterly report includes wood market updates for 15 regions on the continent in addition to the latest export statistics for sawlogs, lumber, wood pellets and wood chips.
March 17, 2017 - Stella-Jones Inc. has announced financial results for its fourth quarter and fiscal year ended December 31, 2016."2016 marked the sixteenth consecutive year of sales and net income growth for Stella-Jones. These results reflect the efficiency of our operations and the benefits of our expansion strategy. Most significantly, they point to the Company's deeply rooted role as a principal North American provider of treated wood products in our main product categories," said Brian McManus, president and chief executive officer. 2016 RESULTSSales reached $1.84 billion, up 17.9% from last year's sales of $1.56 billion. Acquisitions contributed additional sales of $156.8 million, while the conversion effect from fluctuations in the value of the Canadian dollar, Stella-Jones' reporting currency, versus the U.S. dollar, had a positive impact of about $53.1 million on the value of U.S. dollar denominated sales. Excluding these factors, sales increased approximately $69.1 million, or 4.4%.Railway tie sales for 2016 amounted to $716.2 million, up from sales of $709.7 million in 2015. Excluding the conversion effect, railway tie sales decreased approximately $22.9 million, or 3.2%, as lower industry demand in the second half of the year offset strong first-half demand.Utility pole sales reached $579.2 million in 2016, representing an increase of $51.5 million, or 9.8%, from sales of $527.7 million in 2015. Excluding the currency conversion effect and the contribution from acquisitions, sales declined approximately $24.8 million, or 4.7%. This variation reflects a decline in sales of distribution poles due to reduced maintenance demand in certain regions, while sales of transmission poles held relatively steady.Sales in the residential lumber category totalled $345.7 million in 2016, up from $182.6 million in 2015. This $163.2 million, or 89.4% increase mostly reflects additional sales of $91.5 million from the Ram acquisition in the first nine months of 2016. Excluding this factor and the currency conversion effect, sales increased $68.5 million, or 37.6%, reflecting the transition from treating services only for wholesalers to a value-added full service direct offering to retailers.Industrial product sales were $96.3 million in 2016, compared with $97.3 million in 2015. This decrease is mainly attributable to the timing of orders for rail-related products in the United States, partially offset by the currency conversion effect. Logs and lumber sales amounted to $100.8 million in 2016, up from $42.0 million in 2015. This increase is explained by the addition of the purchase and resale of lumber resulting from procurement efforts to support residential lumber requirements and by the timing of timber harvesting.Operating income stood at $233.2 million, or 12.7% of sales, compared with $220.1 million, or 14.1% of sales, in 2015. The increase in absolute dollars essentially reflects higher business activity for the year and the contribution from acquisitions. As a percentage of sales, the decrease is mainly attributable to a higher proportion of low-margin logs and lumber sales, a less favourable product mix this year compared to 2015 and softness in selling prices for certain regions. These factors were partially offset by economies of scale generated by higher volumes in the residential lumber category.Net income for 2016 increased 8.9% to $153.9 million, or $2.22 per diluted share, up from $141.4 million, or $2.04 per diluted share, in 2015.FOURTH QUARTER RESULTSSales amounted to $341.7 million, versus $357.5 million a year ago. Acquisitions accounted for sales of approximately $19.5 million, while the conversion effect from fluctuations in the value of the Canadian dollar, versus the U.S. dollar, had a positive impact of $1.1 million on the value of U.S. dollar denominated sales when compared with last year's fourth quarter. Excluding these factors, sales decreased approximately $36.4 million, or 10.2%.Railway tie sales totalled $113.1 million, down from $147.5 million last year, primarily as a result of lower industry demand at the end of the year. Sales of utility poles reached $144.6 million, compared with $129.5 million last year. Excluding acquisitions, sales declined approximately $3.6 million as a result of slight decreases in sales of both distribution and transmission poles. Sales of residential lumber amounted to $44.6 million, up from $40.1 million last year, reflecting solid market demand and higher direct sales to retailers. Industrial product sales were $15.3 million, down from $23.6 million a year ago, as a result of lower sales of rail related products. Logs and lumber sales stood at $24.1 million, versus $16.7 million last year, due to the timing of lumber purchase and resale activities as well as the timing of timber harvesting.Operating income amounted to $28.2 million, or 8.2% of sales, in the fourth quarter of 2016, versus $48.3 million, or 13.5% of sales, last year. The decrease in absolute dollars and as a percentage of sales mainly reflects lower business activity in railway ties sales and a less favourable product mix. Net income for the fourth quarter of 2016 was $18.5 million, or $0.27 per diluted share, compared with $33.0 million, or $0.48 per diluted share, in the fourth quarter of 2015.ACQUISITION OF KMS AND NPTWOn December 21, 2016, the Company completed the acquisition of substantially all the operating assets employed in the businesses of Bois KMS (GMI) Ltée ("KMS") and Northern Pressure Treated Wood (N.P.T.W.) Ltd ("NPTW"). KMS and NPTW manufacture treated wood utility poles at their facilities located in Rivière-Rouge, Québec and Kirkland Lake, Ontario, respectively.Total cash outlay associated with the acquisition was approximately $19.2 million, excluding acquisition costs of approximately $1.0 million, recognized in the consolidated statement of income under selling and administrative expenses. The Company financed the acquisition through its committed revolving credit facility.SOLID CASH FLOW AND FINANCIAL POSITIONIn 2016, Stella-Jones generated a cash flow from operating activities before changes in non-cash working capital components and interest and income taxes paid of $268.9 million, up 5.7% from $254.3 million in 2015. This increase mostly reflects a higher net income for the year. As at December 31, 2016, the Company's long-term debt, including the current portion, stood at $694.4 million compared with $669.9 million at the end of 2015. The variation reflects higher borrowings to finance the acquisitions completed in 2016, partially offset by the effect of local currency translation on U.S. dollar denominated long-term debt. As at December 31, 2016, Stella-Jones' total debt to total capitalization ratio was 0.40:1, compared with 0.42:1 twelve months earlier.QUARTERLY DIVIDEND OF $0.11 PER SHAREOn March 16, 2017, the Board of Directors declared a quarterly dividend of $0.11 per common share, payable on April 28, 2017 to shareholders of record at the close of business on April 3, 2017.OUTLOOKBased on current market conditions in our main product categories, we expect sales to be weaker in the first half of 2017 when compared to 2016 with an expected year-over-year increase in the second half of the year. Operating margins will be negatively impacted by product mix and softer pricing in certain regions. In the railway tie category, given strong demand in the first half of 2016, we anticipate lower year-over-year demand for 2017, while softer pricing will also reduce revenues. In the utility pole category, demand for regular maintenance projects should gradually return to normal patterns in the second half of 2017, but operating margins are also expected to decrease as a result of the geographical sales mix. As for the residential lumber category, we remain confident to further benefit from solid demand for new construction and outdoor renovation projects in the residential and commercial markets. Our immediate focus will be on the integration of our recent acquisitions as well as taking the necessary steps to adjust production levels, maximize operating efficiencies and minimize costs throughout the organization.
March 16, 2017 - Nationwide housing starts rose 3 per cent in February from an upwardly revised January reading to a seasonally adjusted annual rate of 1.288 million units, according to newly released data from the U.S. Department of Housing and Urban Development and the Commerce Department. Single-family production increased 6.5 per cent to 872,000 units -- its highest reading in nearly a decade – while multifamily starts fell 3.7 per cent to 416,000 units. "This month's gain in single-family starts is consistent with rising builder confidence in the housing market," said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a homebuilder and developer from Kerrville, Texas. "We should see single-family production continue to grow throughout the year, tempered somewhat by supply-side constraints such as access to lots and labor." "The growth in the single-family arena is very encouraging, but may be partly attributable to unusually warm weather conditions throughout most of the country," said NAHB chief economist Robert Dietz. "The modest drop in multifamily starts is in line with our forecast, which calls for this sector to continue to stabilize in 2017." Regionally in February, combined single- and multifamily housing production rose 35.7 per cent in the West. Starts fell by 3.8 per cent in the South, 4.6 in the Midwest and 9.8 per cent in the Northeast. A drop in multifamily permits pulled overall permit issuance down 6.2 per cent in February. Multifamily permits fell 21.6 per cent to 381,000 units, while single-family permits rose 3.1 per cent to 832,000 units -- its highest level since September 2007. Regionally, overall permits rose 25.4 per cent in the Midwest. Permits fell 10 per cent in the West, 10.4 per cent in the South and 22.3 per cent in the Northeast. 
March 7, 2017 - Global trade of softwood lumber has gone up 66 per cent in seven years, while lumber prices have fallen substantially over the same time-period, according to the Wood Resource Quarterly. This is an excerpt from the newly released market report Wood Resource Quarterly. For subscription to the full 52-page report, please visit www.woodprices.com Global Lumber Trade Global softwood lumber trade increased 12  per cent year-over-year to reach a new record high of 121 million m3 in 2016, per estimates by WRI. Since the global financial recession in 2009, there has been a steady climb in international trade of lumber, with shipments the past seven years having increased as much as 66  per cent. While it is no surprise that China is a major driver for the dramatic rise in lumber shipments worldwide the past seven years, it is interesting to note that the US has actually increased softwood lumber imports more than China. Lumber markets – North America Lumber exports from British Columbia reached their highest levels since 2006 in 2016. Lumber shipments from the province to the US were up 25 per cent year-over-year, while export volumes to Asia have fallen about eight  per cent. Shipments to China were up in the 4Q/16 after having reached a six-year low in the 3Q/16. Export volumes to the US in December 2016 accounted for 63 per cent of BC exports, up from 55 per cent two years ago. Lumber markets – Northern Europe Lumber prices in the Nordic countries have been at historically low levels during most of 2015 and 2016. Although prices increased in both Finland and Sweden during the spring and summer of 2016, this upward trend was short-lived and prices fell during the fall, and in the 4Q/16, were back down to about the same level as in the 4Q/15. During the first tenmonths of 2016, Finland increased lumber exports by ten  per cent as compared to the same period in 2015 and the country is on pace to reach a record high in 2016. It is interesting to note that the three biggest export markets for Finnish sawmills are all outside Europe; Egypt, Japan and China. Lumber markets – China China imported record high volumes of softwood lumber in 2016. Despite relatively pessimistic forecasts for wood demand early in 2016, China’s need for imported wood picked up during the summer and fall with import volumes in the 4Q/16 being up about 20 per cent as compared to the 4Q/15, according to the Wood Resource Quarterly (WRQ). Import values for lumber to China rose during most of 2016 with average prices in December 2016 being about six  per cent higher than in December 2015. The increases during 2016 came after two years of sharply declining prices. Lumber market – Japan Japanese softwood lumber imports in 2016 were the highest they have been in three years as total wood demand in the country picked up 3.6 per cent from 2015. There has been a slow but steady shift in the sourcing of lumber away from North America to Europe and Eastern Russia the past few years. From 2015 to 2016, the North American market share fell from 39 per cent to 35 per cent, while the market share of lumber from Russia and the Nordic countries increased from 39 per cent to 42 per cent year-over-year. Both domestic and import prices (in US dollar terms) have fallen in Japan during the second half of 2016, mostly because of a weaker Yen. Lumber market – Russia The weak Ruble continued to be a boon for Russian lumber exporters during 2016, with shipments jumping over ten  per cent from 2015. During the past three years, export volumes have increased 26 per cent with China being the destination for more than half of the shipments from Russia. China and Japan were the shining lights for Russian lumber exporters in 2016 as they were the only two markets of the top ten markets that imported more lumber in 2016 than in 2015. Global lumber, sawlog and pulpwood market reporting is included in the 52-page quarterly publication Wood Resource Quarterly (WRQ). The report, which was established in 1988 and has subscribers in over 30 countries, tracks sawlog, pulpwood, wood chip, lumber and pellet prices, trade and market developments in most key regions around the world. To subscribe to the WRQ, please go to www.woodprices.com
Feb. 27, 2017 - Sales of newly built, single-family homes rose 3.7 per cent in January to a seasonally adjusted annual rate of 555,000 units, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau."This increase in new home sales is in line with our forecast for a steady, gradual recovery of the housing market," said Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas. "However, the pace of growth may be hampered by supply-side headwinds, such as shortages of lots and labor." "We can expect further growth in new home sales throughout the year, spurred on by employment gains and a rise in household formations," said NAHB chief economist Robert Dietz. "As the supply of existing homes remains tight, more consumers will turn to new construction."The inventory of new home sales for sale was 265,000 in January, which is a 5.7-month supply at the current sales pace. The median sales price of new houses sold was $312,900.Regionally, new home sales increased 15.8 percent in the Northeast, 14.8 per cent in the Midwest and 4.3 per cent in the South. Sales fell 4.4 per cent in the West.
March 23, 2017 - With the United States on the verge of reopening NAFTA, Canada should seize this opportunity to open its agricultural markets, and in return ask for full access to American markets for its softwood lumber, argues an Economic Note published today by the MEI."Trade between Canada and the United States having stagnated since the early 2000s, eliminating supply management and softwood lumber tariffs would be a good way of breathing new life into the economic partnership," points out Alexandre Moreau, Public Policy Analyst at the MEI and author of the publication.The system of quotas and tariffs imposed on dairy, eggs, and poultry blocks the entry of foreign products and costs Canadian household $258 a year on average, according to the OECD. Furthermore, if the United States went ahead with the imposition of a 25% tariff on Canadian softwood lumber, the average price of a new home on the American market would increase by $1,300. Just for single-family homes, these additional costs would total $1 billion."Trade barriers have always enriched a small minority of people at the expense of the vast majority," says Mr. Moreau. "The disappearance of existing tariff barriers would be very beneficial for Canadian and American consumers alike."Consumers are not the only ones who suffer in the current situation. Canadian farmers also lose under supply management, since it deprives them of access to billions of consumers around the world. Moreover, the funds required to purchase quotas limits their ability to invest to increase the productivity of their farms."Putting supply management on the table would be a good negotiating tactic that could convince the American government to drop the idea of imposing tariffs on Canadian softwood lumber," adds Mr. Moreau. "We would thus avoid an nth softwood lumber dispute of the kind we've struggled through every five or ten years."Canada is the second largest trading partner of the United States, with trade totalling nearly $882 billion a year, or almost $2.5 billion a day."To preserve and even expand economic relations between the two countries, it is imperative that politicians on both sides of the border resist the influence of lobby groups and come to the defence of the millions of consumers who pay the price for protectionism," concludes Michel Kelly-Gagnon, President and CEO of the MEI.The Economic Note entitled "Trading Supply Management for Softwood Lumber?" was prepared by Alexandre Moreau, Public Policy Analyst at the MEI. This publication is available on our website.The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.
March 23, 2017 - The Forest Products Association of Canada (FPAC) sees some opportunities for Canada’s forest products sector in Wednesday's federal budget. In the budget tabled by Finance Minister Bill Morneau Wednesday, he earmarked: $1.8 billion to support clean technology. It is critical that the forest products sector is central to the government’s clean tech strategy.  These investments will help our sector develop environmentally friendly products in areas of bio-fuels and bio-materials while helping to reduce carbon in the atmosphere. $40 million over 4 years – starting next year – to support projects to increase the use of wood in buildings and infrastructure. This is an important program to support the use of sustainably sourced Canadian wood and since wood stores carbon, this a great way to further address climate change. $5 billion from the Canadian Infrastructure Bank to support improved trade and transportation corridors. This is important as we are a sector heavily dependant on reliable transportation infrastructure and a strong export sector. $1.8 billion for programs to support youth employment, post-secondary education placements and Indigenous skills training; also includes measures to support skills upgrading. Ensuring we have the right workers with the right skills at the right time is key to future of our industry’s success. “Today’s budget made significant commitments to innovation. We now must work with the federal government on specifics to ensure that our sector is able to capitalize on these investments,” says Derek Nighbor, FPAC CEO. “We must be clear.  Like many other business sectors in Canada, we are not immune to the potential negative economic impacts of trade uncertainty south of the border.  We need a strong continued partnership with the federal government to ensure we can remain competitive and continue to employ over 230,000 Canadians living in over 200 rural and northern communities across the country.” FPAC provides a voice for Canada’s wood, pulp, and paper producers nationally and internationally in government, trade, and environmental affairs. The $65-billion-a-year forest products industry represents 2 per cent of Canada’s GDP and is one of Canada’s largest employers operating in over 200 communities, providing 230,000 direct jobs, and 1 million indirect jobs across the country. The forest products sector is a world leader in sustainable forest management; we are a critical partner in the fight against climate change and have invested 1.5 billion dollars in clean technology in the last five years.
March 10, 2017 - B.C.'s trade envoy to the U.S. on softwood lumber, David Emerson, was recently in Washington for a meeting with U.S. trade officials, senators and representatives of the National Association of Home Builders about the ongoing softwood lumber dispute. “We have met with them to make sure they understand that B.C. is going to fight on behalf of our lumber producers," Emerson said in a statement. "We would much rather find opportunities to work together with our American neighbours to find a lasting solution to this long-lived dispute."Following what he called a "prickly" meeting with Oregon Senator Ron Wyden, who is also a main advocate of the U.S. Lumber Coalition, Emerson says the U.S. is not yet ready to settle the dispute.He says the country is likely still adjusting to President Trump's transition into power.Emerson says he made it clear to all parties that Canada is not interested in a lengthy and expensive dispute but rather in a long-term decision, on which it is ready to cooperate. “A stable, predictable lumber supply is good for workers and the economy on both sides of the border," he said in a statement.“Litigation will only disrupt the market and create artificial constraints on timber supply that will benefit a select few timber barons and sawmill owners at the expense of American workers and consumers."Emerson was appointed trade envoy by B.C. Premier Christy Clark in February 2017. | READ MORE 
Feb. 22, 2017 - Amidst ongoing negotiations for a new softwood lumber agreement between Canada and the United States, the Canadian government has announced a task force on softwood lumber. The task force will ensure communication between the federal government and all provinces and territories to ensure needs are being met via information-sharing and analysis. Canada’s Minister of Natural Resources Jim Carr made the announcement Wednesday. "Canada's forest and natural resource sectors are vital to employment in communities across the country,” he said in a statement. “This new task force will work together to strengthen the long-term success of the forest sector through innovation and diversifying markets for Canadian forest products.” Minister Carr will take charge of the domestic task force while Canada’s Minister of Foreign Affairs, Chrystia Freeland continues talks with the U.S. The 2006 Canada-U.S. Softwood Lumber Agreement expired on Oct. 12, 2015. Since then, the proverbial flame under Canada and the U.S. regarding softwood lumber was re-ignited in November 2016 after the U.S. Lumber Coalition filed a petition against the Canadian government, citing unfair subsidies are being provided by the Canadian government for Canadian producers. It also called for taxes to be imposed on Canadian producers as a result. "Softwood lumber is a priority for our government. We are committed to promoting and vigorously defending the interests of workers and producers from across Canada,” Minister Freeland said in a statement. “My colleagues and I will continue to work very closely with the softwood industry, its workers, the provinces and territories." According to a statement from Natural Resources Canada the end-goal for the softwood negotiations is to create stability and predictability on both sides of the border for all lumber producers. “The government will continue to work closely with provinces, territories and the softwood lumber industry to vigorously defend the interests of the middle-class Canadians who depend on the industry. This work will continue outside of the task force,” the statement read. “The new Federal–Provincial Task Force on Softwood Lumber will assess current federal and provincial programming and ensure coordination of government initiatives to promote innovation, market diversification and transformation of the forest sector.” According to Natural Resources Canada, the country’s forest industry directly employs more than 200,000 people nationwide. And nearly 70 per cent of Canada’s $8.6 billion worth of softwood lumber exports in 2015 were sent to the U.S. Minister Carr announces creation of a federal-provincial task force on #Softwood #Lumber https://t.co/RLRgAHpj4u — Natural Resources (@NRCan) February 22, 2017
Dec. 13, 2016 - As the prime minister met with premiers from across the country Dec. 9 on the issue of climate change, the Forest Products Association of Canada (FPAC) called for strong leadership and smart policies so the forest sector can do its part to support the transition to a low carbon economy.  Earlier this year FPAC announced its 30 by 30 Climate Change Challenge where it pledged to cut 30 megatonnes of greenhouse gases a year by 2030, about 13 per cent of the federal government’s overall climate change target.  To reach that goal, FPAC would like to see provinces allocate all revenue generated by a price on carbon to a technology fund made available to industry to support further greening of operations. FPAC would also like to call on the federal and provincial governments to join the global movement to building more with wood as a way to reduce GHG emissions by replacing materials made from fossil fuels.  “We agree that putting a price on pollution can be a win for both the environment and the economy,” says the CEO of FPAC, Derek Nighbor. “The forest products industry has pledged to do more than any other sector in the country to tackle climate change. With smart government policy, we can do this while still supporting forest communities and the nearly one million families who rely on forestry for their livelihoods.”  Nighbor notes that FPAC has also signed on to two important initiatives: an open letter from more than 60 CEOs and civil society leaders urging the first minister to take bold action on clean growth and climate change as well as the Clean Growth Century Initiative that says Canada can tackle climate change through innovation. As part of its pre-budget submission, FPAC has been asking for a renewed partnership with government to support innovation by de-risking the commercialization of new innovative green products and processes that could help reduce greenhouse gas emissions.  The Canadian forest products industry has also been increasing its production of renewable electricity from biomass residue – the sector now produces enough green electricity to power the city of Calgary. With government support for clean technology, FPAC believes the sector can increase its amount of renewable electricity generated in Canada.  “The forest sector appreciates the leadership role that governments in Canada are now taking to tackle climate change,” Nighbor says. “We are uniquely positioned as a willing and able partner to drive real climate change results for Canada.” FPAC provides a voice for Canada’s wood, pulp, and paper producers nationally and internationally in government, trade, and environmental affairs. The $65-billion-a-year forest products industry represents 2 per cent of Canada’s GDP and is one of Canada’s largest employers operating in hundreds of communities and providing 230,000 direct jobs across the country. 
Dec. 13, 2016 – Ontario’s finance committee will hold a hearing Tuesday to consider ideas for funding the province’s forestry sector. The hearing, in Sudbury, is meant to be a pre-budget consultation regarding the federal finance committee’s pre-budget recommendations for Canada’s forestry sector. The federal committee released its pre-budget recommendations on Dec. 7, with a section on funding for Canada’s forest industry. Tuesday’s meeting will include a presentation from the Ontario Forest Industries Association (OFIA)with ideas on how to best use Ontario’s wood, create new jobs that can improve the economy, and apply more environmentally efficient practices. “Growing Ontario’s forestry community and recognizing its vital role in climate change mitigation is crucial in maintaining the opportunities in forestry that create jobs and foster economic growth in northern and rural Ontario,” said the OFIA’s president and CEO, Jamie Lim in a statement. “Ontario’s forestry community generates $11 billion of economic activity. Last year, manufactured forest product sales increased by more than $1 billion over the year before, and our exports of forest products have increased each year since 2012,” Lim stated.

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