Softwood Shock: How Sky-High Tariffs Are Splintering Calgary's Housing Dream
The Gist: A Tax on Timber, A Toll on Alberta
Calgarians, prepare for another hit to your wallet, particularly if you’re eyeing a new home or a renovation. The long-standing trade spat over Canadian softwood lumber has escalated dramatically, and the fallout is landing squarely on our city's booming construction sector and, ultimately, on your bank account. While the Canada-U.S.-Mexico Agreement (CUSMA) generally offers smooth sailing for most exports, our vital forestry sector is weathering a storm of U.S. protectionism.
Alberta is no small player in this high-stakes game. Our province ranks third nationally in softwood lumber production, contributing a substantial 20% to Canada’s total output. This isn't just about big business; it's the lifeblood for nearly 300 communities across the country, where forestry isn’t just an industry – it’s the cornerstone of local economies.
The current duties are nothing short of punitive. Pre-2025, Canadian producers were already navigating a combined duty rate of 14.54% – a 'baseline' that included anti-dumping and countervailing duties. Fast forward to today, and the U.S. Department of Commerce's Sixth Administrative Review has finalized a general rate of 35.16%. As if that weren't enough, an additional 10% global tariff was slapped on under Section 232, pushing the total effective tax burden for the average Canadian mill to over 45%. If you’re building kitchen cabinets, that tariff jumps to 25%, then a staggering 50% by January 1, 2026.
This aggressive tariff regime has already sent ripples. The seasonally-adjusted value of Canadian wood product exports to the U.S. has dipped to its lowest point in five years, marking a 4.7% decrease year-to-date in the third quarter of 2025. While exports to other nations like China (+9.7%) and the Philippines (+13%) have seen modest increases, they’re simply not enough to fill the void left by U.S. demand.
What This Means for Your Wallet and Home
So, what does a 45%+ tax on Canadian lumber mean for you, the average Calgarian? Simple: higher costs for housing. Industry experts are ringing the alarm bells, indicating that these elevated lumber costs alone can tack an extra $20,000 onto the price tag of a standard detached single-family home. When you factor in overall material cost increases, that figure could climb to a staggering $40,000 to $50,000.
In a city already grappling with a surging population and ever-increasing housing demand, this added burden is a bitter pill to swallow. Whether you're a first-time homebuyer, a growing family looking to upgrade, or simply planning a basement development, the cost of wood – the very skeleton of most homes – is rising significantly. Beyond the immediate impact on housing, this instability threatens Alberta's $7.5 billion forestry sector, which supports over 30,000 jobs across the province. Calgary, as a critical logistics and supply chain hub for this industry, feels the reverberations of every mill closure and production cutback.
Shifting Sands and Shifting Strategies
The industry is far from idle. Major producers like West Fraser are explicitly stating strategies to shift capacity to “lower-risk, lower-cost regions,” a clear euphemism for scaling back operations in western Canada. West Fraser's permanent closure of its 100 Mile House mill in B.C. in November 2025, which removed 160 million board feet of capacity, is a stark example. Similarly, Interfor announced a curtailment of 250 million board feet, representing 26% of its total production capacity, citing market demand and lumber prices.
Governments are stepping up with aid, though the long-term impact remains to be seen. Ottawa has committed $500 million to the BDC Softwood Lumber Guarantee Program and another $500 million in loans to keep solvent firms afloat. Starting in spring 2026, a 50% freight rate subsidy for interprovincial transport aims to help B.C. lumber reach markets in Ontario and Quebec more competitively.
Our provincial government is also on the offensive. Alberta's Minister of Forestry & Parks, Todd Loewen, led a delegation to Japan and South Korea in November 2025, actively seeking to diversify export markets beyond our protectionist neighbour. Programs like the Forest Sector Investment and Innovation Program (FSIIP) are working to bolster competitiveness and carve out new global opportunities for Alberta's high-quality wood products.
The Calgary Comeback? The Flip Side
Despite these daunting challenges, Calgary’s construction industry isn't simply caving under pressure. Builders are actively exploring alternative materials, embracing lean construction methods, and prioritizing local sourcing to mitigate skyrocketing costs and maintain project affordability. The Alberta Forest Products Association (AFPA) continues to advocate for diplomatic engagement with the U.S., emphasizing the undeniable truth that Canadian lumber is crucial for affordable American housing. They also champion a "Build with Alberta Wood Act" to strengthen domestic demand.
Furthermore, national labour unions like Unifor are pushing for an expanded National Homebuilding Strategy. Their vision is to forge a direct link between Canadian forests and our domestic residential construction sector, tackling the national housing crisis while simultaneously fostering value-added economic activity right here at home.
The Bottom Line
The escalating U.S. softwood lumber tariffs present a complex and immediate dilemma for Calgary and Alberta. We are caught between the urgent need to shield a foundational industry from external pressures and the imperative to ensure continued affordability and stability in our red-hot local housing market. As producers pivot to new global markets and government support acts as a critical bridge, how will our city balance the advocacy for its provincial resource sector with the immediate housing needs and daily costs faced by every Calgarian? The answer will define not just our economic future, but the very shape of our skyline. The next few years, particularly with the upcoming CUSMA review, will prove pivotal for the wood that builds our city.
