The Impact Canadian Wildfires Will Play on the Timber Industry
On the subject of Canadian wildfires, 2023 is unmistakably a record-setting year, with many different regions throughout the country seeing exceptionally challenging seasons. The impact of these fires on both lives and property has been significant, and timber is among the most affected industries. The loss of so much Canadian woodland will change the market for years to come.
Record-Setting Forestry Losses
Canadian wildfires happen every year, and their impact has already been accounted for in timber supply chains and pricing. However, the scale of the 2023 wildfire season is completely unprecedented, going far beyond the typical allowances that the industry can bear.
The Canadian Interagency Forest Fire Centre maintains extensive records of all wildfires throughout the country. The ten-year average it provides shows that slightly under three million hectares of forest are burned each year — roughly 11,000 square miles. In contrast, the 2023 season saw over 15 million hectares burned, accounting for over five times the average and nearly 5% of the entire forested area of Canada.
Thousands of individual fires have resulted in the evacuation of more than 155,000 people across all regions, many of which had their own independent worst wildfire seasons on record. Nova Scotia, for instance, saw its largest fires ever, and Quebec’s fires in June were noted for their widespread air quality impacts. Later in the season, fires go on to cover much of British Columbia and North West territories.
Closures Across the Industry
The Canadian wildfires have already led to the closure of many sawmills and other key industry operations as lumber prices soar and supplies dwindle, and given that Canada is the second-largest producer of softwood lumber in the world, these supply shortages have international impacts.
Reuters reports that sawmills across the country have gone into temporary shutdowns due to the lack of available supply. Others have found themselves impacted by the fires directly, given their close proximity to the forests.
In addition, many organizations have had to halt their harvesting activities in areas affected by fires. Various processing operations throughout the supply chain have also had to shut down or scale back, including those for lumber and timber products, along with byproducts such as pulp and paper.
No Recovery in Sight
The timber industry has undergone significant supply chain challenges over the past few years. The initial height of the COVID-19 pandemic saw serious supply shortages that sent prices incredibly high, and though 2022 and 2023 have shown significant recovery, these new supply shortages pose another imminent risk.
The true impact of the wildfires on the industry is still unknown, as it will take months to fully assess the affected areas once the fires stop and because wildfires vary widely in their impact on forests. Some only destroy smaller, younger trees and brush, leaving valuable, larger, older trees unscathed, but intense fires can destroy everything.
The timber industry is large and slow-moving, as well, so the impacts of major events take time to ripple through existing inventory and stock to be processed. Nevertheless, you may have already noticed a spike in prices. While many fine timber products are still widely available, increasing prices and dwindling supply are expected in the near future.
The Canadian government is still reeling from these unprecedented events as the path forward remains unclear. New solutions are being investigated in terms of addressing both the climate crisis and forestry management practices at fault for the scale of these wildfires.
Some Resources Are Affected More Than Others
Curious about what type of impact the wildfires may have had on the timber supply at Reliance? Feel free to email us or give us a call for more information on our species available.