Federal budget’s $6.5 billion commitment to forestry comes at ‘critical time’

B.C.’s forest sector welcomed the federal budget’s promise of $6.5 billion in support to help transform their industry, but money alone won’t be enough to lift companies out of the deepening crisis that they’re enduring.

Federal Finance Minister Francois Philippe Champagne’s budget, released Thursday, commits some $3.6 billion in new spending, on top of $2.9 billion from the 2025 budget, to help the industry improve forest management, modernize facilities and transition to higher-value products as a means to stay competitive.

The money is to be spent over six years, and while details about how funds will be divvied up by the provinces aren’t yet known, B.C. representatives are still waiting for details about how Ottawa’s strategy will get at their calls for government to streamline their regulatory burden to reduce harvesting costs.

Champagne’s new budget acknowledges that forestry employs some 200,000 workers and, as a staple of Canada’s economy, contributed $29.7 billion in 2025 to the country’s overall GDP. However, it’s an industry beset by poor markets and a trade war with the U.S.

The industry is still “in a deepening crisis,” according to Kim Haakstad, CEO of the Council of Forest Industries, who used a medical analogy to explain her member’s immediate needs after 21 sawmill closures and the loss of some 15,000 jobs since 2021 before talking about its long-term health.

“We’ve got to stabilize the patient, and then work on the healthy lifestyle,” she said. “Right now, I feel like we’ve spent a lot of time talking about the healthy lifestyle, but we forgot about the work to stabilize the patient.”

Among its promises to forestry, the new budget outlines $500 million over six years “to strengthen fibre supply chains” to help provinces, the territories and First Nations improve forest management and $2 billion, through Natural Resources Canada, to help companies modernize facilities and produce higher-value products.

The biggest-ticket item is a $4 billion commitment over six years, delivered by cash through a new Export Development Canada accelerator fund, to invest in new, large-scale facilities and transform others to produce higher-value products, including biofuels.

In a statement, Haakstad noted that the support recognizes the importance of forestry “at a critical time for workers, businesses and communities.”

Haakstad added that industry participants have been told to expect more details about the strategy to come out in the coming weeks but she will be looking for Ottawa and B.C.’s incoming provincial government to work on reducing the duplication of regulations that add to the burden companies face. So, streamlining federal and provincial requirements related to species-at-risk or fisheries management when it comes to environmental regulation, similar to the work Ottawa is doing for other resource industries in its major projects office.