Canada’s forests are burning. Vast swaths of boreal forest are affected by an exceptionally hot and dry season that has produced the second-worst

wildfire season

on record, with more than seven million hectares burned. Smoke from these fires has degraded air quality across Canada and the United States, reaching as far south as Florida.

The situation has led some U.S. policymakers to publicly blame Canada for failing to manage wildfires and to demand more active forest management. These critiques are hypocritical, given their record of

climate change

denial and backtracking on efforts to reduce greenhouse gas emissions.

Yet beyond partisan politics, the U.S. continues to

impose tariffs

on

Canadian lumber

, undermining our capacity to invest in stronger forest management. How can Canada defend its forests when its products are consistently undervalued by U.S. trade policy?

The U.S. dispute with Canadian lumber is decades old, rooted in the way each country manages its forests. In Canada, most timberlands are publicly owned, and provincial governments charge companies stumpage fees — a set rate for the right to harvest trees. In the U.S., most timber is harvested from private land, with prices set by market competition.

U.S. producers argue that Canada’s fixed stumpage rates aren’t high enough, amounting to an unfair subsidy that lets Canadian mills sell lumber more cheaply. Since the early 1980s, this difference has sparked a series of softwood lumber disputes, with Washington repeatedly imposing anti-dumping and countervailing duties to offset what it calls subsidized Canadian imports.

The Canadian government maintains that its system reflects sustainable forest management on public lands, not a subsidy, and that repeated U.S. tariffs are protectionist measures designed to shield American producers from competition.

These duties have come at a steep cost, raising the price of lumber for American builders and homebuyers, adding thousands of dollars to the cost of a new house and slowing construction at a time when the U.S. is also grappling with a housing shortage. Beyond economics, this dispute has been an ongoing thorn in the side of cross-border relations.

The U.S. is by far the most important market for Canadian lumber, purchasing 78 per cent of our exports over the past five years. That dependence makes U.S. tariffs especially punishing. Under Joe Biden, duties nearly doubled in 2024, rising to about 15 per cent. With

Donald Trump

’s return, tariffs escalated again, first through a broad 25 per cent levy on Canadian goods and now with combined lumber duties reaching roughly 35 per cent.

This constant pressure undermines long-term planning and discourages investment in forest management at a time when it’s most needed.

Canada’s stumpage fees are not an artificial subsidy; they reflect the sheer scale and abundance of our timber resources. The U.S. complains that these fees are “too low,” but this is simply the result of Canada’s natural competitive advantage: vast forests that can produce lumber efficiently.

Eliminating or reducing U.S. tariffs would instantly raise the value of Canada’s standing forest stock, sending a price signal that makes forestry activity viable in regions that are currently too remote or costly to harvest. At the margin, higher returns would unlock investment in better forest management, including targeted thinning and prescribed burns in areas that are now left untouched because they are uneconomic to service.

Fair trade would not just benefit our industry and economy; it would directly improve the health and resilience of the very forests both countries claim they want to protect.

Lifting tariffs would be the first step, but it would not be a cure-all. Many of Canada’s forests lie in remote, sparsely populated regions where active management — whether through thinning, controlled burns or replanting — is logistically challenging and prohibitively expensive. Even with higher timber values, there will always be vast areas where suppression, prevention and restoration are constrained by geography and cost.

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This points to the deeper problem: the root cause of our worsening wildfire seasons is not just management capacity, but a rapidly changing climate. Ending U.S. tariffs would give Canada the resources to manage its forests more effectively, but that must go hand in hand with serious commitments on both sides of the border to cut greenhouse gas emissions. Only then can we hope to break the cycle of worsening fire seasons.

Pedro Antunes is chief economist at the Conference Board of Canada.