British Columbia's key forest products industry is in for several more lean years, despite the windfall from the recent lumber trade agreement with the U.S.
Across Canada, the industry is likely to shrink through 2010 thanks to a slumping housing market in the U.S., according to a report Thursday by the Conference Board of Canada. The group forecast some help from a weakening Canadian dollar and gradual thinning of inventory, which should lead to higher wood prices. Refunds of millions of dollars in duties paid to the U.S., under terms of the recent lumber-trade agreement, should help soften the blow.
Still, B.C. is likely to weather the downturn better than the rest of Canada because of its relatively efficient mills, an economist at the group said. Production in B.C. may shrink by 2 to 3 percent from 2004 to 2007, compared to a 20 percent drop in Quebec and Ontario.