The Canadian federal government has unveiled a substantial funding package for the country's forest products sector, alongside the release of the final report from the Forest Sector Transformation Task Force.
Minister of Energy and Natural Resources Tim Hodgson made the announcement on Vancouver Island on 3 June, confirming that the Business Development Bank of Canada's Softwood Lumber Loan Programme will immediately increase its maximum loan size from $30 million to $50 million, with enhanced terms for letters of credit and two new programmes offering loans upwards of $25 million.
The package also includes $300 million in regional trade response initiatives to support small and medium-sized businesses with market diversification and productivity investment, plus a new $100 million Regional Development Fund targeting communities significantly affected by forest sector disruption.
A further investment of almost $130 million will be directed into 56 forest sector projects through Natural Resources Canada's transformation programmes, aimed at advancing low-carbon wood technologies, expanding mass timber in construction, supporting Indigenous participation and opening new export markets.
The Forest Enhancement Society of British Columbia will receive $37 million to develop new approaches for using low-value and residual forest fibre for pulp, wood pellets and other bioenergy applications.
The announcements coincide with the publication of the task force's final report, Canada's Transformed Forest Sector: Competitive. Resilient. Relevant, which calls for a federally led 25-year national forest sector strategy running from 2026 to 2050.
Its priority recommendations cover six areas: securing long-term access to cost-competitive fibre; catalysing transformation at scale; increasing domestic demand for wood in construction; stabilising the workforce and supporting communities; defending market access and trade infrastructure; and rebuilding a national forest culture.
The backdrop is a sector under significant pressure. Since August 2025, more than a dozen sawmill closures and 40 temporary curtailments have directly affected over 3,000 jobs, with further impacts across logging, pulp and paper, wood pellets and remanufacturing.
Canada announces hundreds of millions for forest sector transformation
