FPAC Welcomes a Distinct Path Forward to Strengthen Forest Sector Competitiveness
To Build More with Canadian Wood and to Accelerate International Market Diversification, Transportation Supply Chains Matter
August 10, 2026 - As the Government of Canada moves ahead with a rail freight support plan for Canadian steel, Forest Products Association of Canada (FPAC) welcomes the decision by the federal government to address cost pressures in the national transportation system and its recognition that Canada’s forest products industry requires a separate path forward.
Canada’s forest sector supports nearly 200,000 employees across hundreds of forest-dependent communities from coast to coast. It supplies the renewable materials needed to build homes and infrastructure, strengthens domestic supply chains, and contributes to Canada’s economic and export strength.
As we work to build more homes and infrastructure with Canadian wood, diversify and grow export markets, and strengthen the prospects for Canadian forest sector employees and their families, getting transportation policy right is key.
To demonstrate the importance of rail service and supply chain cost competitiveness to Canada’s forest products sector, an average forest products shipment travels roughly 1,200 kilometres over land. Nearly 90 percent of FPAC member mills are served by only one railway, limiting practical alternatives for long-distance movements. Rail remains the backbone to move forest products from mills to major domestic markets and international gateways. We must find ways to improve rail system reliability and cost competitiveness.
FPAC analysis finds that rail costs can represent 20–25% oftypical delivered product value, or $2–3 billion annually for the forest products sector. This is roughly equivalent to 15% of the industry’s annual real GDP and 50% of its current annual capital and repair expenditures.
“Canada’s railways are essential partners in moving forest products across the country and in helping us bring more Canadian forest products to the world,” said Derek Nighbor, FPAC President and CEO. “We appreciate the government’s recognition that steel and forest products face fundamentally different market dynamics and that the path forward for forestry should reflect the distinct needs of our sector. We’re not looking for band-aid solutions here. We’re looking for measures that will improve the system and cost competitiveness for the long-term,” Nighbor noted.
“Governments in the United States, the United Kingdom, the Netherlands, and Australia have all been working to find creative ways to promote rail use and address rail costs in their markets. We are pleased to see that the federal government recognizes the importance of supply chain reliability and the need to reduce costs across the system. While Canada’s major industrial sectors have many common rail-related challenges and opportunities, we also face different realities. We welcome the federal government’s intention to get this right for the long-term and look forward to working with them and our railway partners to make our industry more competitive and protect and grow Canadian forestry jobs,” Nighbor added.
Read more
· Fixing Canada's Transportation Supply Chains: Solutions for a Competitive Forest Sector
