This post includes ideas and an excerpt of analysis from the Q2 2026 Forisk Research Quarterly.

Introduction

Forisk’s analysis of U.S. timberland investments and U.S. lumber manufacturers includes tracking Canadian wood-using manufacturing capacity and production. Canada’s lumber industry saws far more softwood lumber than it consumes, exporting over three-fifths of its production. However, over the past two decades, Canadian sawmillers, while navigating the Softwood Lumber Agreement with the United States, restructured their capacity to account for the effects of timber destroyed by the Mountain Pine Beetle. Falling annual allowable cuts (AACs) and increasing haul distances from forest-to-mill reduced the competitiveness of Canadian sawmills.

These structural changes and market conditions created opportunities and justifications for capital investments across the border into mills and timberlands in the U.S. Pacific Northwest.

Forisk Analysis of Canadian Sawmill Capacity Over Time

Forisk’s research of North American wood-using capacity includes mill-by-mill confirmation and analysis of Canada’s open, idled, and closed sawmills. Canadian capacity has declined steadily as leading producers in Western Canada closed mills while acquiring and building mills in the U.S. South. Per data as of April 2026 from the Forisk Mill Capacity Database, Canada’s maximum softwood lumber production, assuming all open and idled mills operate at 100%, is 24.9 billion board feet, or 32% less than Canada’s peak 20 years ago, and 18% less than 10 years ago.

Importantly, most of the capacity reductions in Canada occurred in British Columbia and, to a lesser extent, neighboring Alberta, which magnifies the implications for lumber and log markets across the border in the U.S. Pacific Northwest. According to WWPA, over the past decade, softwood lumber production in B.C. dropped 55%, supporting a regional story for how Canadian forest industry pain provided a buffer and floor for investors and operations in the PNW. While the US West produced 34% less softwood lumber than BC in 2015, it produced 33% more in 2025.

Conclusion

Ultimately, the iron goes to the resource.

For additional figures and notes on this topic, see the Market Update in the Q2 2026 Forisk Research Quarterly (to be published May 2026).