Daryl Swetlishoff, senior managing director and head of Canadian research at Raymond James, joins BNN Bloomberg to discuss the outlook for Canadian lumber in 2026. <\/p>\n
Canada is in a unique position to leverage America\u2019s need for lumber as officials review the Canada-United States-Mexico Agreement (CUSMA) in the New Year, according to a trade expert.<\/p>\n
U.S. President Donald Trump\u2019s claims the U.S. doesn\u2019t need anything from Canada<\/a> yet Canada produces about 25 per cent<\/a> of all U.S. lumber demand. Nearly 90 per cent of softwood lumber is exported to the American market. <\/p>\n \u201cThe good news is they need our wood. We think that there\u2019s an ability to make a deal at some point,\u201d Daryl Swetlishoff, head of research at Raymond James Ltd. told BNN Bloomberg in an interview.<\/p>\n Softwood lumber tariffs now reached a combined 45 per cent after<\/a> the U.S. added a 10 per cent tax to existing anti-dumping and countervailing duties. CUSMA ensures a large portion of goods remain tariff-free, however softwood lumber is specifically excluded from these protections.<\/p>\n While the U.S. relies on Canadian supply, Swetlishoff said Canada relies on the U.S. as its primary customer. He said the sheer volume of Canadian production makes diversification to markets in Europe or Asia difficult. <\/p>\n \u201cWe have a very efficient large industry and the reality is the U.S. will be the home for the lion\u2019s share of our market for the foreseeable future,\u201d said Swetlishoff.<\/p>\n The U.S. could open state-owned forests in Washington, Oregon and Idaho but it does not have enough capacity to mill, process and ship new timber, according to the Government of British Columbia<\/a>.<\/p>\n Impact of tariffs<\/p>\n The Canadian lumber sector is currently facing massive tariffs following accusations of unfair trade practices by American lumber companies.<\/a> British Columbia accounts for 50 per cent of Canada\u2019s exports to the U.S. but has seen sawmills close.<\/p>\n \u201cYou\u2019re seeing cash losses throughout the U.S. south, and we\u2019re going to see curtailments manifest itself in that region as well,\u201d said Swetlishoff.<\/p>\n He said valuations for lumber companies are near all-time lows, which makes some stocks attractive. He recommends companies like Canfor, Doman, and Stella Jones because of their strong balance sheets, good margins, and potential growth through acquisitions. <\/p>\n \u201cThe bad macro makes their targets quite attractive, and we see them all growing their top and bottom line through mergers and acquisitions over the next 12 to 18 months,\u201d said Swetlishoff.<\/p>\n Help is on the way<\/p>\n Canada announced the Green Construction through Wood (GCWood) program to invest over $9 million in projects to accelerate the adoption of innovative Canadian wood products such as mass timber<\/a>.<\/p>\n