A NEW FORESTRY MODEL

The impact of successive blows to Canada’s forestry industry has left hardworking communities across the nation feeling as if they have been put through the mill.

First pine beetle infestations ravaged 18 million hectares of boreal forest on which thousands of livelihoods depend. Then record-breaking wildfire seasons decimated 24 million more.

Each climate-fuelled phenomenon rendered landscapes of sellable raw material for construction and manufacturing redundant.

More recently, US trade tariffs have made Canada’s remaining softwood resources unaffordable in a nearby marketplace that was buying C$11bn of timber from Canada every year.

In little time, saw and paper mills which dominated the country’s forestry industry for decades have been forced to close or curtail operations.

The effect on Canada’s rural communities and economies has been demoralizing.

As the full bite of US duties hit at the end of 2025 major lumber companies closed multiple mills, and hundreds of forestry jobs vanished in weeks. 

When a pulp mill in Crofton, British Columbia, closed last December more than 360 people in a town of 1500 residents were made unemployed in one day, as C$6m in taxes fell out of the local purse.  

The previous month witnessed timber production at a mill in BC’s 100 Mile House end with 165 direct jobs and 500 indirect jobs affected. It was the latest of three sizeable mill closures in the town of 2000 residents.

Numerous other companies have recently announced curtailments to their timber operations.

But, despite difficulties and despair experienced by communities entwined with Canada’s forestry industries for decades, a new model for the country’s revered forestry practices is emerging.

Canada’s forestry lumber yards and sawmills are fighting for survival alongside other intrinsic forestry services, after a series of misfortunes hit the industry.

Canada needs an immediate solution to its forestry problems – to save the remaining 400,000 jobs, valuable skills bases and existing infrastructure within it.

And in March, the country’s federal government gave its clearest indication of a designated new direction for the forestry industry – suggesting diversification must go beyond new global timber markets and into more innovative commercial areas.

Legislation for Canada’s Clean Electricity Investment Tax Credit was given Royal Assent on March 26, officially enacting 15 percent refundable tax credits designed to accelerate clean electricity generation, storage and transmission.

Energy projects made eligible for the tax relief specifically included waste biomass, to support Canada’s struggling forestry economy. That single inclusion in the legislation showed inspiration and initiative by a government tasked with salvaging Canada’s forest fortunes.

After recognizing latent potential lying in Canada’s boreal forest some years ago, PowerWood Canada Corp is already in pre-construction phases for two steam explosion biofuel pellet production facilities in Northern Alberta – with further plants planned in other provinces. 

Each will turn fire-damaged and beetle-ravaged deadwood into energy-dense, durable black biofuel pellets – as a replacement for coal burned worldwide. 

Original plans tabled by the company in 2022 seem more farsighted now in light of Canada’s new legislation under Bill C-15 (Budget 2025 Implementation Act, No. 1).

And Canada’s Clean Electricity Investment Tax Credits follow federal government’s release of C$1.2bn in financial support for the softwood lumber industry. 

Ottawa has made a further C$1.7bn available to other forestry subsectors in loans and loan guarantees, and put a further C$50m in a pot for reskilling displaced workers.

Combined, these measures help to shape a new model for Canada’s forestry industry – one based on innovative largescale biofuel production. 

It will mean workers skilled in logging, haulage, milling, manufacturing, logistics and other downstream services are able to repurpose their talents and resurrect their rural economies and communities.

The global wood pellet fuel market is estimated to be worth more than C$20bn, and it will welcome PowerWood’s newer, more energy-dense steam treated advanced black pellets.

Some of Canada’s sawmills inevitably provide a sustainable supply of fire-damaged and beetle-infested waste wood to PowerWood’s biofuel projects.

PowerWood Canada Corp’s CEO David Peters described the transition from timber to biofuel production as an “easy pivot” for Canada’s forestry industry.

He explained: “A new focus is needed for Canada’s forestry industries to preserve the jobs, skills and infrastructure that exist within it, before they are lost.

“Black pellet biofuel made from waste biomass in the form of burned and beetle-infested lumber is a logical and easy pivot for the industry. 

“External forces unfortunately brought Canada to this turning point but all of the foundations and cornerstones needed to remodel the forestry industry are in place. 

“Now both federal and provincial governments are acting with determination to facilitate forestry’s transition to sustainable biomass production which will play a central role in the industry’s future.

“PowerWood’s biofuel business model is viable without any kind of subsidy, but government support and initiatives like tax credits for investors only serves to raise their interest and confidence in long term production.”