It’s fair to say that 2021 continued the trend of “anything but normal” for the forest sector in North America. Early in 2021 we saw lumber prices begin to climb rapidly as the strong US and Canadian housing markets coupled with increased home renovation demands resulting from stay-at-home COVID situation focusing disposable income at home. Those early 2021 lumber prices weren’t sustainable, and prices declined dramatically throughout the summer and fall. Many players felt the crunch as they were caught with high-priced inventory as prices fell.

Then again in November lumber prices began to climb rapidly, though not reaching levels of early summer. These increases were largely a result of supply chain impact with transportation and production disruptions in BC with flooding and resurging housing starts in US and Canada following a slow-down in late summer. Prices jumped again in December 2021 as housing starts remained strong and inventories were low facing production decreases during the Christmas shutdown.

Continued uncertainties around COVID-19, climate events, and changing regulatory impacts will be felt in the forest sector as we move into 2022. Predictions vary but it’s likely that lumber prices will remain elevated, but not as high as earlier in the pandemic. While the housing market is expected to remain strong, inflation will certainly have an impact. Banks on both sides of the international border are warning of impending increases in lending rates which, along with rising inflation, will certainly somewhat temper the housing market slow housing starts throughout 2022.

While it’s easy to assume the forest industry has realized significant profits from the record lumber prices, it isn’t necessarily the boon that some would like to portray. Firstly, producers of other forest products (like pulp and fibre) have not experienced the same increases, and in fact have had significant negative impacts as a result of the supply chain disruptions due to the pandemic. There are also other factors impacting the industry that lessen the assumed benefits of high lumber prices. These factors include labour shortages, increased property taxes, carbon taxes and clean fuel costs, ongoing supply chain challenges, increased regulatory requirements, unpredictable climate events, and….future pandemics.

It would be easy to postulate that forest sector companies will continue to reap the benefits of high lumber prices and strong markets, but that is naïve and ignores the realities facing the sector.

As a sector, we’ve been able to bring a measure of economic security for New Brunswickers throughout the last two years of uncertainty and change. Building resilience in New Brunswick will be the focus coming out of the COVID-19 pandemic and the forest sector will be an important leader in these efforts. Focusing attention and energy to address the challenges in this and other sectors will be key to realizing increased resilience and enduring economic recovery for the province.

Every year Canadian Port Authorities alone handle more than 340 million tonnes of cargo for small, medium and large businesses across Canada. The Port of Belledune is part of the network that works to optimize supply chain solutions and connect New Brunswick Forest products to the world.

In 2021 the Port of Belledune saw more than 448,337 tonnes of wood pellets and wood chips exported through its marine facility which is 63% more than 2020 exports. The Port along with its customers is projecting to see another increase in exports in 2022 and recognizes a possible shift in how wood pellets or wood chips may be used domestically to support the Federal Government’s decarbonization mandate.

We support our customers in their efforts to maximize the use of their products and are encouraged by the long-term opportunities that exist for New Brunswickers by using pellets or wood chips in the domestic heat market and to continue to support decarbonization around the globe.

The Port of Belledune with its partners at QSL saw a wood pellet storage facility built on the marine terminals. This marks the fourth storage facility at the Port and is a clear demonstration of our commitment to supporting the industry. The facility was completed in the summer of 2021 and with increased exports on the horizon another warehouse is in the works for 2022.

The Wood Pellet association of Canada and its members, which include the Port of Belledune, are committed to supplying the world with responsible and renewable clean energy. We are proud to be part of the supply chain solution that connects New Brunswick forest products to the world.

Join PLT Canada and Green Jobs employers on Thursday, February 10, 2022 for a virtual career fair. The #MyGreenJob Career Fair will support young job seekers’ green career pathways and grow opportunities for young, diverse Canadians entering the Green Job sector.

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