Canada is moving forward with new financial measures to support the transformation of its forest sector, including pulp and paper, wood products and value-added manufacturing.

Federal Minister of Energy and Natural Resources Tim Hodgson announced the measures alongside the release of the final report from the Canadian Forest Sector Transformation Task Force.

New Direct Loans for Forest Companies

The Business Development Bank of Canada (BDC) will offer new direct loans to eligible companies across the forest sector.

The support is intended to help companies:

• modernize operations
• retool production assets
• improve competitiveness
• attract private investment
• diversify markets
• support value-added production

Softwood Lumber Loan Program Expanded

BDC’s softwood lumber loan guarantee program will also be enhanced with:

• higher maximum loan amounts
• expanded letters of credit

This is designed to provide greater financial flexibility for companies facing market uncertainty and trade pressure.

$400 Million for Regional Development Agencies

The federal government is also providing an additional $400 million to Canada’s regional development agencies to support forest sector transformation.

The funding will help advance modernization and diversification projects across regional forestry economies.

Task Force Recommendations

The task force report outlines measures to:

• stabilize the forest sector
• expand wood use in construction
• grow value-added wood products
• modernize manufacturing operations
• diversify export markets
• attract private capital

Industry Insight

Canada’s forest sector is under pressure from market volatility, trade uncertainty, declining publication paper demand and rising global competition.

The new funding measures signal a shift toward transformation rather than short-term support alone.

For pulp and paper mills, the opportunity lies in modernization, energy efficiency, product diversification and stronger alignment with future bioeconomy markets.

Final Thought

Canada’s forest sector strategy is moving toward a more coordinated national approach. With new financing tools and regional support, the focus is increasingly on helping mills and manufacturers adapt, invest and compete in a changing global market.

Last Updated on 04/06/2026 by Jota Machinery