Canadian Lumber Hit by Wave of Curtailments, Closures

It’s been a turbulent year for the Canadian lumber industry.

Despite recent measures aimed at bolstering Canadian sawmills, lumber suppliers and timber operations nationwide, a heavy storm of tariffs, duties, acrimonious trade wrangling and a down market are taking a toll.

The past few weeks have been especially chaotic, with a flurry of companies announcing curtailments and even closures. 

Domtar closes mill

Domtar recently announced it will permanently close operations at its Crofton, British Columbia, facility.

The decision will reduce Domtar’s annual pulp production by approximately 380,000 air-dried metric tons of northern bleached softwood kraft (NBSK) pulp. The announcement will affect approximately 350 employees.

“The Crofton mill has been challenged for some time now,” said Steve Henry, Domtar paper and packaging president. “Over the last 18 months, Crofton employees worked hard to reduce operational costs and they made some extraordinary gains. Unfortunately, continued poor pricing for pulp and lack of access to affordable fiber in BC necessitates the closure.”

“These decisions are made with careful consideration and we recognize the hardship this decision will have on both our employees and the Cowichan Valley community as well as our business partners and the coastal forest sector,” said Henry. “Our primary focus is on the safety and well-being of our employees as we navigate the coming weeks.” 

West Fraser shrinks OSB output

West Fraser Timber Co. Ltd. says it will "indefinitely curtail" its OSB mill in High Level, Alberta, in the spring of 2026 once the site's existing log supply runs out.

The decision, per WF, is the result of a "significant weakening of OSB demand." The reduction is expected to shrink West Fraser's capacity by 860 million square feet (3/8-inch). 

West Fraser also confirmed that the idling of one of its production lines at its Cordele, Georgia, OSB facility since late 2023 will "continue indefinitely." The idled production line at Cordele has a capacity of 440 million square feet (3/8-inch).

West Fraser says it expects to record an approximately $200 million asset impairment loss in the fourth quarter of 2025 in connection with the indefinite curtailment of the High Level OSB mill.

Drax to close facility

Renewable energy company Drax recently shared that it's "ceasing operations" at its pellet plant in Williams Lake, B.C. Per the company, the move is tied to broader industry struggles. It writes:

"The curtailment and closures of neighboring sawmills and the loss of a bid for key local supply have led to a significant reduction in fiber availability, thus making continuing operations at the plant no longer commercially viable. As a result, we expect to cease operations after an orderly wind-down when fiber availability runs out at the site, which we anticipate will take place by the end of 2025."

“The decision to cease operations weighs heavily on us, as we recognize the uncertainty it creates for our dedicated employees and their families,” says Matt White, Executive Vice President of Pellet Operations for Drax. “We are profoundly grateful for their commitment and resilience, and for the unwavering support of our community. Together, we will navigate this challenging time with compassion and transparency.” 

Conifex curtails B.C. sawmill activity

Vancouver-based Conifex, meanwhile, is curtailing operations at its Mackenzie, British Columbia, sawmill for a four-week period starting December 15, 2025. 

The company pins the reduction on "continued weakness in North American lumber markets." It offers additional context, explaining that "benchmark Western SPF prices have declined sharply over the past several months due to a slowdown in new residential construction, soft repair-and-remodel activity, elevated interest rates, and the impact of recently increased countervailing and anti-dumping duties on Canadian softwood lumber shipped to the United States."

Conifex says the duty and tariff increases have "significantly compressed cash margins across the sector" and resulted in operating losses for many producers. Conifex's curtailment is expected to reduce the company's production by approximately 13 million board feet, though it does see a silver lining moving forward. It writes:

While near-term market conditions remain challenging, Conifex continues to believe the fundamentals for SPF lumber are positive over the medium and long term. Structural housing undersupply in the United States, an aging housing stock, and improving affordability conditions as interest rates normalize are expected to support a gradual recovery in demand beginning in the second half of 2026. Curtailments across the industry have already driven North American lumber production to its lowest level in a decade, which is expected to help rebalance inventories and support a return to more sustainable pricing.