Northern Ontario Lumber Producers Struggle to Keep Up with Surging Demand

Northern Ontario lumber producers are struggling to keep up with surging demand as lumber prices in North America are reaching all-time highs. After a difficult year in 2020 for sawmill operations, leading some producers in Northern Ontario to ask for government assistance to remain in operations, the industry experienced a real turn around thanks to rising prices. Frank Dottori, a 50-year veteran of the lumber industry and CEO of White River Forest Products, located in White River, Ontario, noted that to get to the full benefit from these prices the sawmill must operate at full capacity, which is not possible due to a lack of manpower in the region. Dottori saying that his company could generate 25% more income on a full budget. Despite a labor shortage and U.S. timber rates, Mr. Dottori concedes that this is a “good” period for the forestry industry. Luc Bouthillier, full professor in the forestry department at Laval University stated that the turning point came after years of an unfavorable market for lumber. “Since the economic crisis of the early 2000s, many people who could afford to buy a home have held back from doing so.” He cites the example of the U.S., where the increase in population would normally have meant “approximately 1.2 million housing starts per year”, while less than a million people per year built a house during the period from 2006 to 2015. But with the pandemic, he says, that trend quickly reversed.