Canada’s softwood lumber dispute with the United States remains a long-standing disagreement characterized by successive rounds of trade measures over multiple decades, but the latest duties have increased challenges for major producing provinces already contending with structural headwinds in their forestry sectors.
Anti-dumping and countervailing duties, and now additional tariffs on softwood lumber and derivative wood products add to a long history of trade measures applied to Canadian exports.
Beyond the immediate impact on exporters in provinces such as Quebec and British Columbia, sustained production curtailments risk cascading pressures on downstream industries reliant on Canadian lumber as a key input.
Still, these challenges could also create opportunities for strategic repositioning.
Latest dispute follows a long paper trail
At core of the dispute is U.S. authorities alleging that Canadian stumpage fees (fees paid to harvest timber on crown land) effectively function as a subsidy, allowing Canadian lumber to be sold at below-market prices.
In Canada, roughly 94% of lumber comes from crown land subject to stumpage fees, whereas most U.S. timber is harvested from privately owned land and sold through competitive bidding.
The dispute, spanning more than four decades, has been marred by recurring investigations, temporary negotiated settlements, and successive rounds of anti-dumping and countervailing duties (AD/CTV) following the breakdown or expiry of bilateral agreements.
After the expiry of the 2006 Canada-United States Softwood Lumber Agreement in October 2015, the U.S. initiated new investigations resulting in AD/CTV measures being imposed on Canadian exports beginning May 2017. These duties are reviewed annually and vary by individual producer and exporter.
The latest AD/CTV duties were set at a combined rate of about 35.2% on average in the summer of 2025. In addition, the U.S. imposed a 10% tariff on Canadian exports of softwood lumber and a 25% tariff on various derivative wood products, such as furniture, as of mid-October.
These measures come despite the U.S. being highly reliant on imported softwood lumber to offset insufficient domestic production, sourcing roughly 30% of its lumber consumption from imports. That mainly comes from Canada, where exports accounted for roughly 71% of U.S. imported softwood lumber, valued at approximately US$4.5 billion in 2025.
Forestry sector accounts for larger share of activity in some regions
Canada’s forestry sector is an important contributor to the domestic economy, accounting for $23 billion or 1% of nominal industry gross domestic product in 2024—larger than the arts, entertainment and recreation industry.
It directly employs roughly 194,000 Canadians1, and is geographically concentrated with nearly 86% of Canadians employed in just four provinces—Quebec, B.C., Ontario, and Alberta.
The forestry sector accounted for a significant share of industrial GDP in 2022, representing 5.1% in New Brunswick, 2.8% in B.C., and 2.2% in Quebec. In B.C., the sawmill and wood preservation industry was the largest manufacturing sector in 2024 with softwood lumber exports to the U.S. representing roughly 6% of total merchandise exports.