“We’re just waiting for the dust to settle.”

That sentiment was expressed recently by Nick Arkle, CEO of Gorman Bros. Lumber, a B.C. softwood lumber producer, regarding the current 45 per cent tariff on Canadian lumber exported to the U.S.

In other words, what the industry is seeking more than anything else is clarity.

According to industry analysts who track the North American softwood lumber market every day, there is an awful lot of dust that has to settle—and it’s escalating. American tariffs are only part of the dust storm. Canadian lumber producers may not even be that concerned since they can decide whether or not to pass on the cost of tariffs to their customers. In fact, many experts were predicting that the combined tariff would be 45 per cent long before it was announced.

It’s the issues out of their control—like the housing affordability crisis and decreasing fibre access due to provincial government policies—that are keeping Canadian lumber producers awake at night.

The general affordability crisis in North America, where prospective homebuyers can’t even afford to save for a down payment to qualify for a mortgage, has created a current oversupply of lumber production in the range of about 1 billion board feet annually.

So, when Canadian producers announce curtailments or use this opportunity to close sawmills, the impact of the U.S. tariff may not be the primary reason for this decision, but it could perhaps be the tipping point of an already untenable position based on the current market supply and demand imbalance.

Regarding the affordability issue, experts say that mortgage payments for prospective homeowners in the U.S. have risen on average from about $1,800 per month in 2022 to $3,000 per month in 2025, representing an increase of 63 per cent. Imagine tacking that extra amount onto the rising cost of groceries, fuel, and utilities, and no wonder so many Americans and Canadians can’t afford to save for a down payment on a new home.

Complicating this scenario for softwood lumber producers—and one that should not and cannot be overlooked—is provincial government policy, especially in B.C., Ontario and Quebec, that according to the experts is either limiting fibre supply or making it uneconomical to log. So, when provincial premiers quickly point the finger at American softwood lumber tariffs for closures and job loss, they shouldn’t forget to look in the mirror—or at least be honest and acknowledge that many of their forest management policies have become a huge drag on industry revenues, and even abilities to efficiently operate sawmills.

If there is a potential silver lining in Canada to the ongoing tariff soap opera, it’s the promise by the Canadian Liberal government to build 500,000 new, affordable homes per year to tackle the ongoing Canadian housing crisis, thus theoretically creating significant domestic demand for building materials like softwood lumber.

The government has set aside $13 billion over five years for its new Build Canada Homes program to accelerate housing development, help builders with financing, reduce upfront costs, and streamline the permitting process.

It’s a great idea. Prime Minister Mark Carney is correct when he points to the massive home building program that took place after World War II when many returning veterans found jobs building homes and a housing boom ensued. Many of those homes still exist.

Carney has stated numerous times that we can tackle this issue of American tariffs by being our own best customer. In other words, the federal government is using its power to drive growth in a particular sector by creating a market through policy. It can work, and a good recent example is how the government used incentives to grow the EV vehicle market in Central Canada.

The only potential drag on the roll-out of this program is with premiers who for political reasons find all sorts of excuses to slow down actual construction in a blatant attempt to shine a negative spotlight on the federal Liberal government. Let’s hope for the forest industry’s sake that doesn’t happen.

While the experts are skeptical that the federal government will meet its goal of building 500,000 new homes per year—which is about is about one-third of how many homes are built on average in the U.S. annually, with a population 10 times as great as Canada—it will be worthwhile watching to see if Canadian softwood lumber producers will step up and benefit from this initiative.

It won’t be so easy. These producers have spent decades establishing customer relationships and supply chains with American customers, and they are also well aware that our neighbors to the south are extremely prone to hurricanes, tornadoes and wildfire. But if they find that they are having a hard time passing on the cost of American tariffs to their customers, then they just might be ready to buy into what our Prime Minister is selling.

Let’s hope he meant it when he said, “build baby, build.”