Northerners react to sky-high lumber prices
Imagine having to pay triple what you would normally pay in order to complete a home renovation project -- that is the reality for homeowners looking to purchase many wood products right now.
"I don’t have a great connection to the retail prices but I have seen anecdotally that if you were to buy a fence or install a fence this year you are looking at potentially up to three times more than you would normally spend," said Ian Dunn, president and chief executive officer of Ontario Forest Industries Association.
Dunn said there are three main factors for the increase.
"Less production, so there’s a bit of a supply gap that resulted and that we’re actually still dealing with. On the demand side, we’re seeing people working at home realizing it would be a good time to put in a new deck or a new fence and as a result, renovations are doing quite well and stronger than what we would expect under normal conditions. The housing market as well, as we all know is doing really well," he said.
When the pandemic first hit, many businesses prepared for things to be slower than usual, including Kelly Lake Building Supplies in Sudbury.
"But that turned around, basically, in about ten days of people staying home," said general manager Steve Choquette.
In 2020, retailers were dealing with a shortage of some products and in 2021, it's skyrocketing prices.
"It changes so rapidly, it’s difficult. Our costs basically change hourly. In some scenarios we're purchasing large amounts of lumber without even knowing what we’re going to be paying for it until it gets here," said Choquette.
This is something that even has some politicians in the North Bay area calling on their MP and MPP to investigate the issue of lumber prices.
"Obviously, it’s going to have an impact on the average person going to the lumber yard to purchase their everyday stuff for just home renovations, but we just had a provincial announcement for a new nursing home in our community and if prices continue to go up the way they are, that new nursing home, the price tag of that, will increase quite significantly," said Powassan Mayor Peter McIsaac.
He said that the municipality set a record for new home builds last year and it's on track this year to break that record.
McIsaac fears that volatile prices for building products could affect that growth.
In the meantime, Dunn said with lumber production increasing we will see an easing of pricing over time.
"It’s supply and demand. Inventory has been light everywhere, both in the supply of the lumber and homes as well. We all know when supply is low and demand is high prices react accordingly and that’s what we're seeing. But, again, at these prices, anyone who can produce lumber will and we will see an easing of prices over time. It’s just a matter of time," he said.