The following piece by ICBA Chief Economist Jock Finlayson was first published in Truck Logger Magazine on October 1, 2025.
British Columbia’s forest products sector has been struggling for several years, weighed down by a mix of dwindling fibre supplies, high operating costs, steep (and recently increased) U.S. duties on southbound lumber exports, and cumbersome regulatory and permitting systems designed and administered by the provincial government. An industry that long ranked as B.C.’s number one source of export earnings and served as a mainstay of jobs and business activity in every region of the province has fallen on exceptionally hard times.
Even in its diminished state, however, the combined logging, wood products manufacturing, and pulp/paper industries continue to make outsized contributions to the province’s economy. A 2024 study commissioned by the B.C. Council of Forest Industries estimated that the forest sector collectively accounts for $17.4 billion of gross domestic product while directly and indirectly supporting some 100,000 B.C. jobs. It generates more than $6 billion in annual revenues for various levels of government and pays $9 billion in direct wages and salaries to B.C. workers. Forestry also remains B.C.’s second biggest source of export earnings (after the broadly defined energy sector).
Apart from what every forest industry executive I have consulted since 2021 describes as a punishingly uncompetitive regulatory environment, the biggest problem for the B.C. industry is the vertiginous decline in access to fibre. Without an adequate supply of raw material, the industry has had no alternative but to shrink – a gradual vanishing act that is still underway.
Annual harvest volumes in B.C. have plummeted by almost half since 2010. Moreover, due to the bureaucratic nightmare surrounding the process of obtaining cutting permits, the actual amounts of timber harvested have fallen well below even the dwindling volumes approved by the Chief Forester. The meltdown in fibre supply reflects several developments: fallout from the pine beetle infestation; the impact of wildfires; and provincial government policy decisions and administrative practices that have sterilized large parts of the Crown land base, drastically increased operating costs for logging contractors, and curtailed harvesting.
The NDP government seems belatedly to have recognized that the forest industry faces an existential crisis. At least 35 sawmills have closed their doors since 2017, along with a number of pulp/paper mills. Logging companies and their employees have suffered blow after blow. Under the stewardship of the NDP, tens of thousands of good “family-supporting” jobs have disappeared across the province’s forestry value chain. Recent statements from NDP politicos point the finger at U.S. President Trump’s protectionist tariff and other trade policies as the culprit. But the roots of the B.C. industry’s decline are home-grown rather than external.
Thus, the mandate letter to the Minister of Forests penned by Premier David Eby last November offered a rare ray of sunshine amid the bleakness. The letter specifically tasked the Minister with finding ways to modestly increase timber harvesting after years of painful – often policy-driven – decreases. The government has also loudly touted its commitment to promote “mass timber” construction as a way to boost demand for wood. The “mass timber” policy is welcome, but the reality is that 85% of the lumber produced in B.C. is exported. To succeed, our forest industry needs to export most of what it produces. This, in turn, requires reliable access to adequate quantities of raw material and a policy and regulatory environment that supports investment and enables efficient day-to-day operations in the industry. Stated bluntly, the current policy and regulatory landscape in B.C. simply doesn’t align with the basic prerequisites for an economically viable forest products industry.
Recently came news that the government has established a Forest Advisory Council, to “help” the sector while also paying close attention to the state of the “forest ecosystems.” This announcement drew a mix of yawns and sighs of exasperation from industry representatives. The composition of the Advisory Council speaks to the NDP’s blinkered approach to economic development and industrial policy generally, as well as to the wholesale failure of its forest policies. The Advisory Council is populated by the usual assortment of NDP-friendly “stakeholders.” But conspicuously absent are current industry leaders (let alone any investors). One might say that, in pondering the future of what until recently was B.C.’s single largest economic engine, the Eby government has concluded that it’s best to sideline the “capitalists” who finance the industry and the managers who run the businesses that comprise it.
This explains why B.C.’s biggest forest companies have been directing their capital, management attention, and growth ambitions elsewhere – to the U.S. south, Scandinavia, and the rest of Canada. British Columbia has become a high cost producing jurisdiction, with a shrinking and unstable fibre supply base, a uniquely difficult day-to-day operating environment for logging contractors and lumber manufacturers, and a “landlord” that exhibits almost no understanding of what it takes to succeed in business. No wonder independent equity analysts now describe forestry in B.C. as essentially “un-investable” – a situation that’s unlikely to change until some fresh thinking takes hold among policymakers in Victoria.
