The Recent Federal Investment in Canada’s Forestry Sector Is Bold —But the Bioeconomy Must Be Part of the Plan

Prime Minister Mark Carney’s recent $1.2 billion commitment to retool the softwood lumber industry, expand domestic value-added production, and boost Canadian-made materials in housing is a critical step for Canada’s forestry sector. But if we want this investment to build lasting resilience, reduce emissions, and strengthen communities, we can’t just upgrade the old system—we need to integrate the forest bioeconomy into Canada’s industrial strategy. 

The forest bioeconomy is about using wood fibre beyond traditional lumber to create bio-based materials, renewable energy, and biochemicals. Done right, it can transform how we manage forests—cutting emissions, reducing wildfire risk, and turning underused fibre into jobs, housing materials, and economic growth.

For decades, Canada’s forestry model has been based on volume: harvest, sort, export. In the process, a staggering amount of wood—branches, tree tops, lower-grade logs and, surprisingly, even good quality logs—is left behind or burned in slash piles. This business-as-usual approach is carbon-intensive and short-sighted. 

Across the country, and especially in British Columbia, Indigenous groups are advancing a different vision—one where every part of the tree is valued, rural and Indigenous communities benefit from local processing, and climate resilience and Indigenous leadership are built into the supply chain. 

The federal government’s $500 million investment in product and market diversification can help make that vision real. With targeted funding, companies can pilot new products, upgrade manufacturing, and scale low-carbon alternatives such as wood fibre insulation, bioplastics, mass timber, and engineered wood panels. Expanding domestic capacity not only reduces reliance on imported, high-emission materials—it accelerates the adoption of made-in-Canada, climate-smart products in housing and other sectors.

But here’s the catch: unless some of this investment flows into bioeconomy infrastructure, we risk repeating old patterns—exporting raw logs, burning usable fibre, and losing innovators to markets with better support and capital. A recent Foresight Canada study found that the forest bioeconomy’s biggest challenge is the declining availability of economically available fibre—much of it lost to waste in primary forestry. 

Now is the time to consider Canada’s forestry and bioeconomy as one. If we’re building 500,000 new homes a year, let’s ensure they’re made with Canadian materials, processed in Canadian communities, and supported by Canadian jobs. By recovering underused fibre, creating regional biomaterial hubs, and bringing together industry, Indigenous leaders, and entrepreneurs we can transform waste into value, fully utilize every harvested tree, and build a stronger, more sustainable economy.

Foresight’s Ventures to Value Chains: Forest Bioeconomy report confirms that the technology to leverage Canada’s abundant bioeconomy—along with the necessary feedstock—already exists. Over 140 cleantech companies operate in Canada’s forest bioeconomy, representing nearly 7% of the over 2,000 Canadian cleantech companies identified by Natural Resources Canada in 2022. 

Collaborations like the one between Plantee Bioplastics and Rohe Homes showcase this potential. Their partnership is helping scale up the commercial production of modular homes made with Canadian bio-based materials, supporting sustainability, housing supply, and the circular economy. These are the kinds of projects that need funding and infrastructure support from new federal investments.