Ottawa Commits $6.5 Billion to Forestry Sector

Federal budget funds forestry support as the industry absorbs combined U.S. tariffs and duties of around 35 per cent.

Updated on Nov. 5, 2026 in International Trade

Isometric editorial illustration of stacked raw logs in a timber yard beside a tall cylindrical biorefinery tower, rendered in muted oxblood, teal, and mustard. — Ottawa will commit $6.5 billion over six years to Canada's forestry sector, starting in 2027-28, as producers absorb U.S. tariffs and duties of about 35 per cent. AI Illustration. Upload story photo >

Live Poll

Is your local economy getting better or worse for jobs right now?

Canada's federal budget allocates $6.5 billion over six years to the forestry sector, beginning in 2027-28. The support arrives as Canadian forestry faces combined U.S. tariffs and duties of around 35 per cent.

Why it matters

Forestry groups in British Columbia have warned the industry is at a breaking point after numerous mill closures in recent years. The funding is intended to help the sector weather U.S. tariffs and remain competitive.

The budget sets aside $6.5 billion over six years, with $4 billion for a forestry accelerator, $2 billion to modernize facilities and equipment, and $500 million to improve fibre supply, against combined U.S. tariffs and duties of around 35 per cent. The distribution of these funds across provinces has not been specified.

The players

Government of Canada

The federal government delivered the budget that allocates forestry support over six years, as the country's forestry sector faces U.S. trade pressure.

British Columbia

Canada's westernmost province is home to much of the country's forestry industry and has experienced numerous mill closures in recent years.

The details

The $4 billion accelerator will invest in large facilities and convert existing ones into biorefineries and biofuel facilities. The $500 million will be deployed through better forest management, stewardship and technology.

November 5, 2026: Federal budget announces forestry funding.
2027-28: Forestry funding of $6.5 billion begins flowing.

Market Dynamics

The federal support comes as Canadian forestry absorbs tariffs and duties of around 35 per cent on exports to the United States, a pressure that has contributed to recent mill closures in British Columbia. The budget's focus on facility modernization and biorefineries signals an effort to shift the sector toward new products rather than only defending traditional lumber markets.

Investors with exposure to Canadian forestry companies may see the $6.5 billion federal commitment affect sector valuations as funding begins flowing in 2027-28. The impact on individual firms will depend on how much of the support reaches their facilities and regions.

The takeaway

Canadian forestry is receiving significant federal support as it contends with tariffs of around 35 per cent. Readers tracking the sector should watch how the funding is distributed across provinces, particularly British Columbia.