Transcript: What's Behind Soaring Lumber Prices? | May 10, 2021

Steve sits in a room with white walls, a low slanted ceiling and several framed pictures on the walls including one of Walter Kronkite. He's slim, clean-shaven, in his fifties, with short curly brown hair. He's wearing a blue shirt and a spotted blue tie.

A caption on screen reads "What's behind soaring lumber prices? @spaikin, @theagenda."

Steve says ADAPTING TO LOCKDOWNS AND STAY-AT-HOME ORDERS HAS HAD UNEXPECTED RIPPLE EFFECTS. ONE OF THEM... LUMBER HAS BECOME A HOT AND PRICEY COMMODITY IN THIS PANDEMIC ERA. WITH US TO EXPLAIN WHY: IN BOSTON, MASSACHUSETTS: PAUL JANNKE, HE IS PRINCIPAL OF LUMBER, FOREST ECONOMIC ADVISORS...

Paul is in his fifties, clean-shaven and balding. He's wearing a blue shirt.

Steve continues IN LONDON ONTARIO: SUE WASTELL, PRESIDENT, WASTELL HOMES. SHE'S ALSO A 2nd VICE PRESIDENT AT THE CANADIAN HOME BUILDERS' ASSOCIATION...

Sue is in her forties, with long wavy blond hair. She's wearing a blue shirt.

Steve continues AND IN STOUFFVILLE, ONTARIO IN YORK REGION: CHRIS BLACK, GENERAL MANAGER AND PARTNER AT CENTURY MILL LUMBER...

Chris is in his thirties, with short brown hair and a stubble. He's wearing a patterned white polo shirt.

Steve continues I WANT TO THANK ALL THREE OF YOU FOR JOINING US ON TVO TONIGHT. JUST TO GET OUR CONVERSATION STARTED, I'M GOING TO ASK MY FRIEND TONY BURKE TO BRING UP THIS FIRST GRAPHIC HERE BECAUSE IT REALLY DOES SHOW, AND I'LL DESCRIBE IT FOR THOSE LISTENING ON PODCAST IN SOME DETAIL.

A slate appears on screen, with the title "Softwood lumber prices. January 2018 – March 2021."

A line chart shows the change in the Softwood Lumber Price Index, which has soared as of mid 2020 to over twice as high as the highest point of 2020.

Steve reads data from the slate and says
OTHER IS THE PRICE CHANGE IN SOFTWOOD LUMBER SOLD BY MANUFACTURERS IN CANADA. THAT RED LINE STARTS OFF IN WHAT LOOKS LIKE A FAIRLY REASONABLE PLACE AND GOES, YOU KNOW, FAIRLY STRAIGHT ACROSS. BUT HOLY COW, DOES IT EVER GO UP TO THE HEAVENS BY THE END.

The slate changes to one titled "Lumber prices on fire."

Steve reads data from the slate and says IN APRIL 2019, AS THE PANDEMIC BEGAN, THE PRICE OF A STANDARD 8-FOOT WESTERN SPRUCE AND FIR TWO BY FOUR WAS 2 dollars 86. TODAY THAT PRICE IS 10 dollars. THE RISING PRICE OF LUMBER CAN NOW ADD MORE THAN 30,000 dollars IN ADDITIONAL COSTS TO BUILD A 2500 SQUARE FOOT HOME, AND YET, 44 percent OF CANADIANS, WE'RE TOLD, HAVE COMPLETED OR ARE PLANNING TO DO SOME HOME RENOVATIONS DURING THE COURSE OF THIS PANDEMIC. WELL, WE HAVE TALKED A LOT ABOUT FLATTENING THE CORONAVIRUS PANDEMIC CURVE. LET'S SEE IF WE CAN DO THE SAME FOR WOOD PRICES, BECAUSE WE'RE NOT FLATTENING ANY CURVES THERE. PAUL, TO YOU FIRST. YOU'VE BEEN IN THIS INDUSTRY FOR MORE THAN 25 YEARS. GIVE US A BETTER SENSE OF JUST WHAT THAT LOOKS LIKE ON THE GROUND FOR THE PRICE RISES WE'VE SEEN IN THE PAST YEAR OR SO.

The caption changes to "Paul Jannke. Forest Economic Advisors."

Paul says YEAH. WELL, UNFORTUNATELY FOR YOUR VIEWERS, YOUR GRAPH IS OUT OF DATE BY A MONTH. AS CRAZY AS THIS MIGHT SOUND, YOU MIGHT DOUBLE THOSE PRICES OVER THE LAST MONTH. PRICES HAVE SHOT UP IN APRIL AND THEY'VE JUST ABOUT DOUBLED. SO NOT QUITE, BUT ALMOST DOUBLED FROM WHERE THEY WERE AT THE BEGINNING OF THE MONTH. SO IT'S BEEN A CRAZY RUN FOR LUMBER PRICES CERTAINLY. AND YOU WOULD HAVE TO GO BACK... REALLY, IT'S UNPRECEDENTED. AS AN ECONOMIST, I ADJUST THINGS FOR INFLATION. WHEN WE ADJUST FOR INFLATION, YOU HAVE TO GO BACK TO THE EARLY 1970s, 1973 TO BE EXACT, BEFORE YOU SEE LUMBER PRICES THAT ARE ANYWHERE CLOSE TO WHERE WE'RE AT TODAY. SO WE'RE... THIS YEAR WE'LL PROBABLY END UP THE YEAR AROUND... WELL, U.S. DOLLARS PER THOUSAND BOARD FEET, ABOUT 1100 dollars. AND BACKMYè IN THE EARLY 1970s, WE HIT A PEAK OF 960 dollars. SO WE'RE ABOUT 14 percent ABOVE THAT PEAK TODAY.

Steve says SO NEARLY HALF A CENTURY AGO IS WHAT YOU SAY. SUE, HOW ABOUT IN YOUR CAREER IN THIS INDUSTRY? HAVE YOU EVER SEEN ANYTHING LIKE THIS BEFORE?

The caption changes to "Sue Wastell. Wastell Homes."

Sue says NO. WE WORK IN YEARS OF ADVANCEMENT FOR ALL OF OUR SALES, AND WE ALWAYS HAVE HAD SOME FORM OF PREDICTABILITY AS TO WHERE THESE PRICES ARE GOING TO LAND. WE'VE BEEN A FEW HUNDRED DOLLARS OR MAYBE EVEN UP TO A THOUSAND DOLLARS. TODAY WE HAVE NO CERTAINTY AS TO WHAT OUR LUMBER COSTS ARE GOING TO BE ON BUILDS THAT WE'RE PRE-SELLING BUT AREN'T EVEN GOING TO BE GETTING TO WITHIN THE NEXT FEW MONTHS. SO IT'S CAUSING A LOT OF STRESS BETWEEN BUILDERS RIGHT NOW.

Steve says I CAN IMAGINE. CHRIS, HOW ABOUT YOU IN YOUR CAREER? EVER SEEN ANYTHING LIKE THIS BEFORE?

The caption changes to "Chris Black. Century Mill Lumber."

Chris says NO, IT'S CRAZY. NOT ONLY THE PRICES BUT JUST THE SHORTAGES. YOU KNOW, I LOOK OUTSIDE MY WINDOW HERE, AND I DON'T SEE MUCH WOOD (LAUGHING), WHICH ISN'T REALLY A GOOD THING WHEN YOU'RE IN A RETAIL BUSINESS LIKE WE'RE IN. NOT ONLY DO I SEE DIFFERENT PRICES EVERY TIME I BUY IT, BUT WHEN IT COMES IN, IT JUST FLIES OF THE SHELVES AND THEY'RE EMPTY AGAIN. USUALLY I LIKE TO LOOK OUT THERE AND SEE NOT ONLY WOOD ON THE SHELVES BUT STACKS OF LUMBER TO REPLACE IT, AND I DON'T SEE ANY OF THAT.

Steve says LET ME DO A FOLLOW-UP. WHEN PEOPLE SAY, YEAH, THE STUFF IS FLYING OFF THE SHELVES, THEY MEAN SALES ARE BRISK BUT THEY DON'T LITERALLY MEAN THE SHELVES ARE BARE. WHAT'S ON YOUR SHELVES RIGHT NOW?

Chris says NOT MUCH.

(LAUGHING)

Chris continues ESPECIALLY IN THE SOFTWOODS BECAUSE THERE IS SUCH A SHORTAGE. PINE IS VERY TOUGH TO GET. CEDAR IS VERY TOUGH TO GET. YOU KNOW, IT'S TOUGH BECAUSE I GUESS INUNDATED WITH CALLS EVERY DAY: "DOñ YOU HAVE TWO BY FOUR CEDAR?" NOT ONLY DO I NOT HAVE IT BUT, NUMBER TWO, I DON'T KNOW WHEN IT'S COMING IN AND, NUMBER THREE, BECAUSE I DON'T KNOW WHEN IT'S GOING TO BE IN, I DON'T KNOW WHAT THE PRICE IS GOING TO BE. ALL AROUND, IT'S TOUGH GOING RIGHT NOW.

Steve says SUE, WHAT IS THIS DOING TO HOME BUILDERS IN THE PROVINCE?

The caption changes to "Sue Wastell, @wastell_sue."

Sue says WELL, I WOULD SAY THAT A LOT OF US ARE DECIDING JUST HOW MANY NEW HOMES THAT WE WANT TO RELEASE RIGHT NOW. TYPICALLY WE WOULD SELL OFF PHASING OF HOMES, SO THAT COULD BE FOR US MAYBE 50 UNITS AT A TIME. WE'RE NOW LIMITING THAT TO MAYBE FOUR JUST TO TRY TO KEEP OUR PRICING A LITTLE MORE SECURE. A LOT OF BUILDERS ARE ALSO NOT PRESELLING AT ALL AND THEREFORE THEY'RE JUST NOT SELLING AS MANY HOMES EACH YEAR OR THEY'RE WAITING UNTIL THE HOMES GET TO A CERTAIN POINT, MAYBE AFTER FRAMING IS COMPLETE, BEFORE THEY PUT THOSE HOUSES UP FOR SALE, JUST SO THAT THEY HAVE BETTER CERTAINTY AS TO WHAT THEIR PRICING ACTUALLY IS.

Steve says PAUL, LET ME GET YOU BACK IN HERE AND ASK: WHO IS MAKING ALL THE MONEY RIGHT NOW?

Paul says WELL, IT'S A COMBINATION OF THE CROWN, SO THE CANADIAN GOVERNMENT WHO HAS SEEN THE TIMBER STUMPAGE PRICES RISE DRAMATICALLY. SO THAT WOULD BE THE PROVINCES, BRITISH COLUMBIA AND ALBERTA IN PARTICULAR, AND TO A LESSER EXTENT ONTARIO AND QUEBEC, AND THEN ALSO THE LUMBER MANUFACTURERS. AND THEN IF YOU GO INTO THE U.S., IT'S DEFINITELY THE LUMBER MANUFACTURERS. SO THE... IF YOU LOOK AT A PLACE LIKE THE U.S. SOUTH WHERE THEY HAVE AN ABUNDANCE OF FIBRE, THE TIMBER COST, WHICH IS THE MAIN COMPONENT OF THE COST OF PRODUCING LUMBER, THEY HAVEN'T GONE UP MUCH AT ALL.

Steve says WHEN YOU SAY FIBRE, YOU MEAN WOOD?

Paul says YES. FIBRE IS THE TREE. SO YOU HARVEST THE ROUND TREE, RUN IT THROUGH A SAWMILL, AND CREATE RECTANGULAR LUMBER BOARDS OUT OF IT.

Steve says WHY IS THIS HAPPENING IN THIS PARTICULAR TIME IN OUR HISTORY?

The caption changes to "Paul Jannke, @GetFEA."

Paul says YOU HAVE TO GO BACK TO LATE 2018-2019, WHEN WE HAD REALLY A PRETTY SHARP DOWNTURN IN LUMBER PRICES IN THE SECOND HALF OF 2018. IT LASTED THROUGH 2019. AND SO PRODUCTION CAME OFF PRETTY DRAMATICALLY AT THAT POINT. SO MILLS CAME INTO 2020 WITHOUT... HAVING PRODUCTION DOWN SOME, AND THEN THE PANDEMIC HITS. AND WHAT DO PEOPLE THINK WHEN THEY SEE THIS PANDEMIC? WELL, THEY THINK THAT DEMAND FOR THEIR PRODUCTS ACROSS THE BOARD ARE GOING TO PLUNGE, AND YOU ONLY NEED TO LOOK TO CHINA OR TO ITALY AND YOU COULD SEE JUST THE MAJOR DECLINES IN INDUSTRIAL PRODUCTION AND ECONOMIC ACTIVITY AND THE STAY-AT-HOME ORDERS. SO WHAT DO DEALERS DO, THE PEOPLE BUYING THE WOOD? THEY DREW DOWN THEIR INVENTORIES. THEY STOPPED BUYING AND WERE SELLING WOOD. MILLS CUT WAY BACK ON PRODUCTION. SO WE SAW IN THE PROVINCE OF BRITISH COLUMBIA, FOR INSTANCE, THAT PRODUCTION WAS SLICED IN HALF. SO MILLS WERE PREPARING AND DEALERS WERE PREPARING FOR VERY, VERY WEAK CONSUMPTION. AND THEN WHAT HAPPENED AFTER THE PANDEMIC HIT, WELL, EVERYONE WAS FORCED TO STAY HOME WITH THE STAY-AT-HOME ORDERS. SO THEY WERE FORCED TO WORK FROM HOME. AND THEY COULDN'T SPEND THEIR TIME OR THEIR MONEY ANYWHERE ELSE. YOU COULDN'T GO TO SPORTING EVENTS, WHICH PERHAPS FOR SOME PEOPLE IN TORONTO WAS ACTUALLY OKAY.

[LAUGHTER]

Paul says YOU COULDN'T GO TO... SORRY. LOW BLOW.

Steve says I'M NOT SURE, BUT I THINK THAT WAS A SHOT. ACTUALLY, I AM SURE THAT THAT WAS A SHOT.

Paul says SORRY ABOUT THAT. NO SPORTING EVENTS, CULTURE EVENTS, YOU COULDN'T GO TO RESTAURANT OR ON VACATION. YOU HAD NOWHERE TO SPEND YOUR TIME OR MONEY AND YOU WERE STUCK AT HOME. SO YOU WERE LOOKING AROUND YOUR HOME AND SEEING ALL THE THINGS THAT NEEDED TO BE FIXED. OH, BY THE WAY, YOUR KIDS WERE DOING SCHOOL WORK FROM HOME AND YOU WERE DOING YOUR WORK FROM HOME. IF YOU WANTED TO ADD ON, THIS WAS THE TIME TO DO IT BECAUSE YOU NEEDED THAT EXTRA SPACE. IN PART FOR PEOPLE LOOKING FOR ADDITIONS, ALTERATIONS, IMPROVEMENTS, THIS WAS REALLY THE TIME WHEN THEY REALLY WANTED TO DO THAT. AND THEN ON TOP OF THAT, INTEREST RATES PLUNGED. THEY GOT VERY, VERY LOW. SO IT BECAME AFFORDABLE TO DO THAT. AND THEN A FINAL COMPONENT WOULD BE ON THE NEW HOME CONSTRUCTION SIDE, PEOPLE WANTED TO GET OUT OF THE CITIES. THEY WANTED TO LEAVE HIGH DENSITY LIVING AND GET INTO MORE LOWER DENSITY LIVING SITUATIONS. SO THE NEW HOME CONSTRUCTION SIDE JUST REALLY SURGED. SO WE HAD A SITUATION WHERE THE SUPPLY SIDE WAS DECLINES AND THE DEMAND SIDE WAS IMPROVING. YOU KNOW, YOU FLASH FORWARD A COUPLE MONTHS AND MILLS, ONCE THEY REALIZED THAT THE DEMAND WAS REAL AND WAS SUSTAINABLE, THEY TRIED TO INCREASE PRODUCTION, BUT THEN YOU RAN INTO CoVID QUARANTINE RESTRICTIONS ON HOW THEY COULD INCREASE THAT PRODUCTION. SO YOU HAVE ONE PERSON WHO CATCHES CoVID AT A MILL AND THEN THAT PERSON HAS TO ISOLATE. YOU HAVE EVERYONE WHO CAME IN CONTACT WITH THAT PERSON HAS TO QUARANTINE FOR 14 DAYS. AND A SAWMILL ISN'T WHAT IT WAS 20 OR 30 YEARS AGO. THEY'RE HIGH-TECH PIECES OF EQUIPMENT AND THEY NEED HIGHLY SKILLED LABOUR TO RUN THOSE MILLS. IF YOU HAVE SOMEONE WHO IS OUT OF WORK FOR 14 DAYS, YOU CAN'T JUST HIRE SOMEBODY TO COME IN AND REPLACE THAT PERSON. SO THE MILLS JUST SIMPLY WEREN'T ABLE TO KEEP UP, THEIR PRODUCTION WASN'T ABLE TO KEEP UP WITH DEMAND, AND THAT CAME AT A TIME AFTER TWO MONTHS OF INVENTORY DRAW-DOWNS, SO THE INVENTORY WASN'T THERE. THAT REALLY IN A NUTSHELL DESCRIBES WHY PRICES GOT SO HIGH.

Steve says IT SOUNDS LIKE A REAL PERFECT STORM TO BE SURE. SUE, LET ME DO A REAL-LIFE EXAMPLE WITH YOU ON THIS RIGHT NOW. I PRESUME YOUR COMPANY IS IN THE PROCESS OF BUILDING HOMES IN AND AROUND THE LONDON AREA RIGHT NOW; IS THAT FAIR TO SAY?

Sue says YES, THAT'S TRUE.

Steve says OKAY. ARE THERE TIMES WHEN YOU'RE NOT SURE WHETHER YOU ACTUALLY HAVE ENOUGH WOOD LEFT OR CAN GET ACCESS TO IT TO COMPLETE THE CONSTRUCTION OF A NEW HOME?

Sue says YES, WE HAVE RUN INTO THAT, AND CERTAINLY IN PARTICULAR CERTAIN PRODUCTS LIKE ENGINEERED FLOOR SYSTEMS ARE VERY CHALLENGING, IF YOU'RE ABLE TO GET THEM AT ALL RIGHT NOW. SO WE ARE HAVING TO SORT OF DO A LOT OF ON-THE-FLY CHANGES TO OUR HOMES. IF WE HAVE TO CHANGE A FLOOR SYSTEM PARTWAY THROUGH WHERE WE WERE EXPECTING TO BE ABLE TO GET THAT MATERIAL AND THEN NOW WE CAN'T, WE'RE HAVING TO REENGINEER HOUSES, EVEN SOMETIMES AFTER THEY'VE STARTED TO BE CONSTRUCTED. RESUBMIT THOSE PLANS TO THE CITY FOR REVIEW. AND WAIT UNTIL THAT REVIEW CAN COME BACK OUT OF CITY TO CONTINUE THAT CONSTRUCTION OF THAT HOME. SO IT IS CERTAINLY ADDING DELAYS TO OUR TIMING, DELAYS TO HOME OWNERS BEING ABLE TO MOVE INTO THEIR HOMES, AND A LOT OF FRUSTRATION.

Steve says WELL, YOU'VE ANTICIPATED MY NEXT QUESTION, WHICH IS, IF SOMEBODY WAS EXPECTING, FOR EXAMPLE, TO BE ABLE TO TAKE POSSESSION OF THEIR NEW HOME LET'S SAY IN JULY, WHAT ARE THEY LOOKING AT NOW?

Sue says I'D SAY MOST BUILDERS, LIKE US, ARE ANTICIPATING ON AVERAGE AT LEAST 6 WEEKS OF DELAYS FROM THIS, AND AS MUCH AS I THINK A COUPLE OF OUR SITES, JUST IF YOU ADD ALL THE DELAYS FROM NOT JUST LUMBER BUT ALL THE OTHER MATERIAL SHORTAGES THAT WE'RE GETTING IT CAN BE A COUPLE OF MONTHS BEHIND.

Steve says AND HOW ARE YOUR CUSTOMERS SORT OF ROLLING WITH THOSE PUNCHES?

Sue says WELL, WE TRY TO COMMUNICATE AS BEST AS WE CAN, AND I THINK THAT'S REALLY THE KEY TO KEEPING THAT COMMUNICATION LINE OPEN WITH YOUR CUSTOMERS. WE SORT OF FILL THEM IN AS WE EXPERIENCE DELAYS ON THE FLY SO THAT THEY'RE NOT, YOU KNOW, GIVING UP THEIR RENTAL UNIT THAT MAYBE THEY'RE LIVING IN RIGHT NOW TO TRY TO ADD SOME BUFFER TIME TO GET OUT SO THEY'RE NOT HOMELESS OR NOT HAVING TO MOVE IN WITH FAMILY MEMBERS. SO FAR THEY'VE BEEN VERY UNDERSTANDING. I THINK THERE'S ENOUGH NEWS GOING ON THAT PEOPLE REALLY REALIZE WHAT NEW HOME BUILDERS ARE GOING THROUGH, SO WE'VE BEEN VERY PLEASED WITH OUR CUSTOMERS UP TILL NOW.

Steve says YEAH, I MEAN, THERE WAS A MOMENT I GUESS MANY MONTHS AGO WHEN A LOT OF PEOPLE WERE SORT OF POINTING AT DOUG FORD, THE PREMIER OF ONTARIO, AND SAYING: REALLY? HOME BUILDING IS AN ESSENTIAL SERVICE? YOU WANT TO LET THEM CONTINUE TO DO THEIR THING DURING THE COURSE OF THIS PANDEMIC? AND THAT WAS THE ARGUMENT HE WAS USING, WHICH IS WE DON'T WANT TO HAVE PEOPLE HOMELESS. THEY'VE BOUGHT THEIR HOMES. THEY WANT TO GET INTO THEIR HOMES. WE HAVE TO GET THEM FINISHED AS FAST AS POSSIBLE. I'M SURE THAT ARGUMENT RESONATES WITH YOU VERY STRONGLY.

Sue says ABSOLUTELY. EVERYONE NEEDS TO LIVE IN A HOME AND WE DON'T WANT TO SEE PEOPLE HOMELESS OR HAVING TO, ESPECIALLY DURING CoVID, HAVING TO MOVE IN WITH OTHER FAMILIES TO MEET THAT NEED. AND YOU CAN THINK JUST THE TRICKLE EFFECT THAT OCCURS WHEN THE BACKLOG OF PEOPLE MOVING INTO THEIR HOMES SORT OF CAN BUILD UP SO QUICKLY. SO THERE'S HOUSES IN THE RESALE MARKET THAT HAVE PRE-SOLD AND THOSE PEOPLE HAVE TO BE OUT. THEY'RE NOT WAITING ON A NEW HOME TO BE CONSTRUCTED. BUT THAT TRICKLE EFFECT CAN JUST ADD UP AND ADD UP AND THEN YOU CAN HAVE MULTIPLE FAMILIES THAT PERHAPS WOULDN'T HAVE SOMEWHERE TO BE.

Steve says GOTCHA. OKAY, CHRIS, LET ME GET YOU BACK IN HERE. HAVE YOUR CUSTOMERS' HABITS OR TASTES OR DESIRES CHANGED AS A RESULT OF THE WOOD SHORTAGE?

The caption changes to "Chris Black. Instagram: @centurymilllumber."

Chris says I WOULD SAY THAT THE CUSTOMER PROFILE HAS CHANGED A LITTLE BIT. IT NOT ONLY HAS TO DO WITH THE SHORTAGE, BUT EVEN JUST WITH CoVID IN GENERAL. A LOT OF PEOPLE HAVE REALIZED, YOU KNOW, THEY'VE GOT A LOT OF TIME ON THEIR HANDS NOW SINCE THEY'RE STUCK AT HOME. I WOULD SAY THAT EVEN THOUGH A LOT OF PEOPLE SAY THEY'RE WORKING 40 HOURS A WEEK, I WOULD SAY THAT BASED ON WHO WE'RE SEEING IN HERE, THAT'S PROBABLY NOT THE CASE. SO THERE ARE A LOT OF NEW WOODWORKERS, WHICH IS ACTUALLY EXCITING FOR US BECAUSE A LOT MORE PEOPLE ARE PURCHASING WOOD, WHICH IS A GOOD HARBINGER FOR THE FUTURE, AS LONG AS PRICES KIND OF BOTTOM OUT A LITTLE BIT. YEAH, PEOPLE ARE HAVING TO ADAPT, YOU KNOW, TO WHAT THEY CAN GET THEIR HANDS ON. SO, YOU KNOW, IF WE'RE SHORT ON PINE TONGUE AND GROOVE, MAYBE THEY PAY THREE TIMES THE PRICE TO GET CEDAR. AND IT'S NOT BECAUSE THEY WANT TO DO IT, BUT BECAUSE THEY WANT TO BE ABLE TO MOVE INTO THEIR HOUSE. LIKE YOU WERE JUST TALKING ABOUT, YOU KNOW? NOBODY WANTS TO SIT IN AN UNFINISHED HOUSE. SO PEOPLE ARE HAVING TO CHANGE KIND OF WHAT THEIR ORIGINAL PLAN WAS AND ROLL WITH THE PUNCHES AND ROLL WITH WHAT MATERIAL IS AVAILABLE.

Steve says DO YOU SEE CUSTOMERS SORT OF KICKING THE CAN DOWN THE ROAD AND DECIDING THAT THEY'RE NOT GOING TO PURCHASE THAT NEW HOME OR THEY'RE NOT GOING TO DO THAT RENOVATION OR BUILD THAT DECK OR A GAZEBO IN THE BACK YARD BECAUSE THEY WANT TO WAIT FOR LUMBER PRICES TO COME DOWN?

Chris says I'VE HEARD IT A LITTLE BIT, YOU KNOW, KIND OF ONE THING WE HEAR IS... WE GET A LOT OF CALLS AND TO PAUL'S POINT EARLIER, WHEN YOU'RE ASKING WHO IS MAKING ALL THE MONEY, I CAN SAY IT'S NOT US NECESSARILY, YOU KNOW WHAT I MEAN? I'M NOT SITTING HERE EVERY DAY DIVING INTO MONEY LIKE SCROOGE McDUCK, YOU KNOW WHAT I MEAN, DOING BACKSTROKES INTO 20 dollar BILLS OR LIGHTING CIGARS WITH 20 dollar BILLS. THAT'S NOT WHAT'S GOING ON HERE. PEOPLE WILL ONLY PAY SO MUCH. SO WE ON THE RETAIL END ARE HAVING TO EAT INTO MARGINS BECAUSE I THINK WHEN YOU'RE WORKING WITH CUSTOMERS EVERY DAY, YOU KNOW WHAT PEOPLE WILL PAY AND WHAT THEY CAN KIND OF STOMACH AND I THINK WE'RE STARTING TO GET TO THE POINT WHERE WE'RE GETTING VERY CLOSE TO, YOU KNOW, THAT TEETERING POINT WHERE BASICALLY PEOPLE WILL JUST START SAYING NO. AND I THINK, UNFORTUNATELY, IT'S GETTING CLOSER AND CLOSER TO THAT POINT.

Steve says SUE, LET ME GET YOU TO FOLLOW UP ON THAT POINT THEN. HAS THIS CURRENT PANDEMIC CHANGED I GUESS THE TYPES OF RENOVATIONS OR THE TYPES OF HOUSES THAT ONTARIANS ARE NOW LOOKING FOR?

Sue says CERTAINLY OUR CLIENTS HAVE CHANGED. WE'RE SEEING MORE AND MORE PEOPLE COMING FROM THE GTA THAT ARE MOVING DOWN HIGHWAY 401 TO LONDON. WE HAVE NEVER SEEN AS MANY PEOPLE FROM TORONTO THAT ARE LOOKING TO GET OUT OF THE CITY, THAT KNOW THAT THEY CAN WORK FROM HOME AND ARE WILLING TO MOVE A FEW HOURS AWAY IN ORDER TO DO SO. OUR FLOOR PLANS, I WOULD SAY, ARE ALSO CHANGING. CLIENTS ARE LOOKING FOR DEFINITELY MORE HOME OFFICES. THEY'RE MOVING AWAY FROM THE OPEN FLOOR PLANS THAT WE HAVE BEEN BUILDING OVER THE LAST MANY YEARS WHERE HOMES ARE JUST ONE BIG OPEN SPACE. THEY ARE LOOKING TO HAVE THOSE MORE PRIVATE SPACES INCLUDED IN THEIR HOME PLANS. AND GENERATIONAL SUITES ARE REALLY TAKING OFF. NOW BECAUSE OF PRICING BEING WHAT IT IS, IN ORDER FOR SOME CUSTOMERS TO BE ABLE TO MAKE THAT JUMP TO A NEW HOME, THEY'RE HAVING TO INCORPORATE GENERATIONAL SUITES AND MAYBE BRING IN FAMILY MEMBERS TO HELP PAY FOR IT. SO THAT'S BEEN A BIG TREND THAT WE'RE SEEING HERE.

Steve says I JUST WANT TO MAKE SURE I UNDERSTAND THAT. A GENERATIONAL SUITE AS IN NOT ONLY ROOM FOR THE PARENTS, NOT ONLY ROOMS FOR THE KIDS, BUT MAYBE FOR GRANDPARENTS AS WELL IN THE SAME HOME?

Sue says CORRECT, YES. SO WE'RE INCORPORATING SORT OF SEPARATE AREAS THAT MAY HAVE THEIR OWN SORT OF KITCHEN AREA, LIVING SPACES, AND BEDROOMS AS PART OF THE OVERALL HOUSE PLAN.

Steve says OKAY. IT'S INTERESTING. WE'RE HEARING LOTS OF ANECDOTAL EVIDENCE ABOUT PEOPLE LEAVING TORONTO AND MOVING, YOU KNOW, ANYWHERE FROM ONE TO TWO TO THREE HOURS OUTSIDE TORONTO ON THE THEORY THAT, IF YOU DON'T HAVE TO GO INTO THE OFFICE EVERYDAY OR MAYBE THE FUTURE MEANS GOING INTO THE OFFICE ONCE A WEEK OR ONCE EVERY OTHER WEEK, THERE'S NO REASON TO PUT UP WITH THE KIND OF HOUSE PRICES IN TORONTO THAT PEOPLE HAVE TO PUT UP WITH. SO YOU ARE DEFINITELY SEEING ACTUAL HARD EVIDENCE OF THAT PHENOMENON; IS THAT RIGHT?

Sue says ABSOLUTELY. I WOULD SAY IN THE LAST 8 MONTHS, 80 percent OF OUR PURCHASERS ARE FROM THE GTA.

Steve says AND THEY'RE MOVING INTO THE LONDON AREA?

Sue says YES.

Steve says PAUL, LET ME GET YOU BACK IN HERE. THE WOOD THAT CANADIANS USE, PEOPLE IN ONTARIO USE, TO BUILD THEIR HOMES OR THEIR DECKS OR WHATEVER, WHERE DOES THAT WOOD USUALLY COME FROM?

Paul says SO IT WOULD COME FROM REALLY ONE OF TWO MAIN PRODUCING AREAS, EITHER WESTERN CANADA OR EASTERN CANADA. SO B.C. IS THE SINGLE LARGEST PRODUCING REGION FOLLOWED BY QUEBEC AND THEN ALBERTA AND TORONTO AFTER THAT. AND YOU DO HAVE SOME PRODUCTION IN THE MARITIMES AS WELL. SO IN THE ATLANTIC PROVINCES ALSO. BUT B.C. HAS TRADITIONALLY BEEN THE LARGEST PRODUCING REGION. AND THIS IS ANOTHER FACTOR THAT ISN'T TALKED ABOUT A LOT FROM THE PERSPECTIVE OF LUMBER PRICES BUT IF WE GO BACK TO, YOU KNOW, BACK TO THE PREVIOUS PEAK IN LUMBER DEMAND, WE HAD 15 BILLION BOARD FEET OF LUMBER BEING PRODUCED IN BRITISH COLUMBIA. TODAY IT'S ABOUT 8 TO 9 BILLION BOARD FEET. SO THERE WAS A MOUNTAIN PINE BEETLE THAT DEVASTATED THE LODGEPOLE PINE RESOURCE THERE. JUST TO PUT IT INTO SOME PERSPECTIVE, SPF LUMBER IS SPRUCE, PINE, AND FIR. THAT'S ABOUT 1.2 BILLION CUBIC METRES OF SPRUCE, PINE, AND FIR IN THE BRITISH COLUMBIA FORESTS. SO THE MOUNTAIN PINE BEETLE KILLED OVER 700 MILLION CUBIC METRES OF THAT 1.2 BILLION CUBIC METRES. AND LODGEPOLE PINE WAS THE STRONGEST OF THE THREE SPECIES TOO. IT WAS PROBABLY THE PREFERRED SPECIES TO USE IN CONSTRUCTION. SO THAT WOOD IS JUST SIMPLY NOT AVAILABLE. SO THEIR PRODUCTION LEVELS HAVE COME OFF SHARPLY BUT STILL THEY'RE THE LARGEST PRODUCING REGION.

Steve says PAUL, GIVEN TRANSPORTATION COSTS, DO WE INFER THAT WOOD THAT COMES FROM ONTARIO FOR AN ONTARIO MARKET WOULD BE, UNDER NORMAL CIRCUMSTANCES, LESS EXPENSIVE THAN WOOD THAT HAD TO BE SHIPPED IN FROM BRITISH COLUMBIA OR QUEBEC?

Paul says YES, ABSOLUTELY.

Steve says AND IS THAT THE CASE RIGHT NOW?

Paul says YES... WELL, SO THE... THE DELIVERED WOOD IS ACTUALLY, ONCE THE WOOD IS DELIVERED THERE, THAT'S PRETTY MUCH ALL THE SAME PRICE. SO YOUR WOOD IS DETERMINED BY THE MARGINAL COST PRODUCER. SO IF YOUR WOOD... IT'S CHEAPER FOR THE MILL GOING FROM ONTARIO INTO THE TORONTO AREA TO SHIP IT INTO THE TORONTO AREA. BUT THE MILL REALLY MAKES THAT DIFFERENTIAL IN TRANSPORTATION.

Steve says NOW, I NOTICED WHEN YOU GAVE THAT LIST OF PLACES WHERE WE GET OUR WOOD FROM, B.C. CAME ON THE LIST, QUEBEC CAME ON THE LIST BEFORE ONTARIO. WHY... I MEAN, WE HAVE A LOT OF TREES IN ONTARIO. WHY IS ONTARIO NOT HIGHER UP THAT LIST?

Paul says WELL, YOU HAVE A LOT OF TREES BUT JUST NOT AS MANY AS SOME OF THESE OTHER PROVINCES. SO THEY SIMPLY HAVE A LARGER RESOURCE. SO ONE OF THE THINGS ABOUT THE LUMBER INDUSTRY IS EVERYONE IS VERY CONCERNED ABOUT HARVESTING AT A SUSTAINABLE LEVEL. SO IN CANADA, YOU HAVE SOMETHING WHICH IS CALLED AN ANNUAL ALLOWABLE CUT OR AN AAC. SO THE PROVINCIAL GOVERNMENTS SPEND A LOT OF TIME AND PUT A LOT OF RESOURCES INTO DETERMINING JUST HOW MANY TREES YOU CAN HARVEST SUSTAINABLY. AND SO IF YOUR FOREST RESOURCE IS SMALLER, AS IT IS IN ONTARIO, YOU SIMPLY CAN'T HARVEST AS MANY TREES. SO THE INDUSTRY IS NATURALLY SMALLER.

Steve says WELL, CAN THE GOVERNMENT OF ONTARIO NOT MAKE A DECISION THAT, OKAY, BECAUSE OF THE TIMES AND THE EXTRAORDINARY CIRCUMSTANCES WE NOW FIND OURSELVES IN, WE'RE GOING TO LET YOU TAKE DOWN MORE TREES?

Paul says YEAH, THEY WOULDN'T DO THAT BECAUSE, YOU KNOW, THIS IS... I THINK THERE ARE ENVIRONMENTAL CONCERNS HERE. SO THERE ARE A COUPLE OF THINGS: ONE, THE INDUSTRY WOULDN'T DO THAT BECAUSE THEY ARE ACTUALLY CONCERNED ABOUT THE LONG-RUN SUSTAINABILITY OF THEIR... YOU KNOW, THEIR ABILITY TO PRODUCE THE PRODUCT, AND SO THEY KNOW IF THEY HARVEST AT AN UNSUSTAINABLE LEVEL TODAY, THAT MEANS THEY'RE GOING TO HAVE LESS WOOD TO BE ABLE TO HARVEST IN 15 OR 20 YEARS FROM NOW. SO THEY'RE NOT REALLY INTERESTED IN DOING THAT FROM A LONG-TERM PERSPECTIVE. THE GOVERNMENTS ARE CONCERNED ABOUT THE ENVIRONMENT AND THEY DON'T WANT TO HARVEST AT TOO HIGH OF A LEVEL.

Steve says CHRIS, CAN I GET YOU TO COME IN ON THAT? WOULD YOU URGE THE GOVERNMENT OF ARE ONTARIO TO ALLOW MORE HARVESTING RIGHT NOW GIVEN THE EXTRAORDINARY CIRCUMSTANCES IN WHICH WE FIND OURSELVES?

Chris says OBVIOUSLY, YOU KNOW, WHAT PAUL IS SAYING ABOUT THE ENVIRONMENTAL CONCERNS, THEY ARE IMPORTANT, AND WE DO GET CALLS AND QUESTIONS FROM CLIENTS ALL THE TIME ABOUT THE SUSTAINABILITY OF THE LUMBER THAT WE'RE SELLING. SO IT IS A CONCERN. BUT OBVIOUSLY, YOU KNOW, THE FACT THAT THE DEMAND IS SO HIGH AND THE SUPPLY IS SO LOW IS ANOTHER MAJOR ISSUE. SO IF THERE WAS A WAY THAT, YOU KNOW, WE COULD KIND OF GET THE BEST OF BOTH WORLDS... OBVIOUSLY I WOULD BE ON BOARD WITH THAT. BECAUSE I THINK AT THE END OF THE DAY, YOU KNOW, IT IS BETTER FOR THE CONSUMER IF THERE IS MORE PRODUCT IN THE MARKETPLACE, AND I'M SURE EVERYONE ON THE PANEL WOULD AGREE WITH THAT LINE THERE.

Steve says SUE, CAN I GET YOU ON THAT AS WELL?

Sue says CERTAINLY WE WOULD LOVE TO HAVE MORE SUPPLY RIGHT NOW. HOWEVER, I THINK QUALITY IS VERY IMPORTANT. WE WOULDN'T WANT TO RISK ANY KIND OF QUALITY TO THE MATERIALS THAT WE'RE USING FOR PEOPLE'S NEW HOMES. WE HAVE STARTED SEEING SOME LUMBER THAT HAS STARTED COMING IN FROM OTHER COUNTRIES THAT WE'VE BEEN GIVEN WARNINGS ON NOT TO USE HERE IN ONTARIO. SO WE'RE HOPEFUL THAT, YOU KNOW, WE CAN JUST CONTINUE TO USE CANADIAN LUMBER AND KEEP THOSE QUALITY LEVELS AT THE HIGHEST THAT THEY ARE.

Steve says OKAY, SUE. YOU CAN'T SAY SOMETHING LIKE THAT... GO AHEAD. COME ON IN.

Paul says YEAH. SO THERE ARE THREE COMPONENTS THAT YOU NEED TO PRODUCE LUMBER, RIGHT? SO ONE IS THE TIMBER, AND TIMBER IS REALLY KEY. A SECOND COMPONENT IS YOU NEED THE MILL TO PROCESS THAT LUMBER. A third COMPONENT IS YOU NEED THE LABOUR TO TURN THAT TIMBER INTO LUMBER. IT'S NOT JUST A MATTER OF INCREASING THE SUPPLY OF FIBRE. YOU HAVE LIMITATIONS ON THE MACHINERY SIDE, THE ACTUAL MILLS THAT ARE IN THE GROUND, AND YOU HAVE LABOUR FORCE CONSTRAINTS AS WELL. YOU NEED A SKILLED WORKER TO BE ABLE TO PRODUCE THAT WOOD. EVEN IF THE GOVERNMENT DID A SHORT-TERM LOOK FOR THE NEXT YEAR WE'RE GOING TO INCREASE THE SUPPLY, THE MILLS COULDN'T ACTUALLY RAMP UP PRODUCTION REALLY ANY MORE THAN THEY HAVE TODAY.

Steve says BECAUSE WE HAVE A SHORTAGE OF LABOUR IN THIS AREA AS WELL?

Paul says WELL, LABOUR AND ALSO... SO IF YOU HAVE A MILL THAT'S OPERATIONAL, YOU'RE PRODUCING AS MUCH LUMBER OUT OF THAT MILL AS YOUR LABOUR FORCE WILL ALLOW YOU TO TODAY. AND AS YOUR FIBRE SUPPLY WILL ALLOW YOU TO. THE MILLS ARE NOT HOLDING BACK ANY LUMBER IN ORDER TO KEEP PRICES UP. THEY'RE PRODUCING AS MUCH AS THEY POSSIBLY CAN. THEY WANT TO TAKE ADVANTAGE OF THESE HIGH PRICES.

Steve says AND, SUE, I THOUGHT I HEARD YOU SAY THERE ARE SOME COUNTRIES FROM WHICH WOOD IS COMING FROM RIGHT NOW THAT YOU'RE SORT OF BEING, NUDGE-NUDGE, WINK-WINK, BEING URGED NOT TO PURCHASE. CAN YOU FILL IN THOSE BLANKS JUST A BIT?

Sue says WELL, WE HAVE SEEN THROUGH OUR HOME BUILDER ASSOCIATION INFORMATION COMING OUT TO THE BUILDERS AS A SORT OF WARNING THAT THERE HAS BEEN OTHER LUMBER THAT HAS BEEN COMING INTO ONTARIO THAT HAS BEEN OFFERED FOR SALE THAT IS NOT APPROVED LUMBER THROUGH THE ONTARIO GOVERNMENT, THE CANADIAN GOVERNMENT. SO WE KNOW IT'S OUT THERE. AND DUE TO THE LACK OF SUPPLY, I'M SURE THAT SOME PEOPLE WILL BE TRYING TO BRING THEIR LUMBER THROUGH FOR PEOPLE AND PURCHASERS TO BE ABLE TO ACCESS. SO WE ARE JUST TRYING TO MAKE SURE THAT WE ARE BUYING THE BEST LUMBER THAT WE CAN GET, CANADIAN LUMBER, AND CAN ENSURE THAT IT'S THE HIGHEST QUALITY THAT WE CAN OFFER TO OUR PURCHASERS.

Steve says WHAT COUNTRIES ARE YOU BEING URGED NOT TO PURCHASE FROM AND IT IS A QUESTION OF QUALITY OR IS IT TRADE AGREEMENTS AND THAT KIND OF THING?

Sue says WE'VE SEEN LUMBER COMING OUT OF BRAZIL. THAT'S THE MAIN ONE THAT WE ARE SEEING SOME PEOPLE ARE PURCHASING. OUR OWN SUPPLIERS DO NOT BRING THAT IN AND DO NOT SELL IT. BUT IT'S BEEN SORT OF A WARNING TO BUILDERS AND HOME BUILDER ASSOCIATIONS FOR BUILDERS TO KEEP AN EYE OUT. SO THEY MAKE SURE THAT THE LUMBER THEY ARE RECEIVING ON SITE IS NOT FROM SOME OF THESE COUNTRIES.

Steve says PAUL, IS THAT A QUALITY ISSUE OR IS THAT A TRADE THING?

Paul says YEAH, SO... SO IF YOU THINK ABOUT HOW A TREE GROWS, EACH YEAR A TREE PUTS ON A RING AND GROWS A LITTLE BIT WIDER. SO IF YOU NEED... IF YOUR TREE NEEDS TO BE A CERTAIN DIMENSION BEFORE YOU CAN RUN IT THROUGH THE MILL AND IT GROWS EXTREMELY FAST, THEN NATURALLY THOSE RINGS ARE GOING TO BE WIDELY SPACED, RIGHT? SO IF YOU COULD GROW A TREE IN 20 YEARS... SAY YOU WERE GOING TO GROW A TREE TO BE 30-CENTIMETRES IN DIAMETER AND THAT'S WHAT YOU'RE GOING TO RUN THROUGH YOUR MILLS AND YOU CAN DO THAT IN 25 YEARS, YOU'RE GOING TO HAVE A MUCH WIDER RINGS THAN SAY A TREE THAT TAKES YOU 120 YEARS TO GROW. AND THAT TREE THAT TAKES YOU 120 YEARS TO GROW IS GOING TO BE MUCH STRONGER STRUCTURALLY. THAT'S EXACTLY WHAT'S HAPPENING. IN BRAZIL, YOU HAVE VERY, VERY FAST GROWING PLANTATION SOUTHERN PINE THAT IS... WHERE THE RINGS ARE FAR APART, SO STRUCTURALLY, THEY DON'T HAVE THE STRENGTH... THEY'RE NOT NEARLY AS STRONG AS AN SPF, SO A SPRUCE, PINE, OR FIR TREE THAT GROWS IN ONTARIO OR ANY OF THE OTHER PROVINCES WHERE IT TAKES 80 TO 120 YEARS TO ACTUALLY GROW THAT TREE. SO, YES. IT IS SIMPLY A QUALITY ISSUE. I SHOULDN'T SAY A QUALITY ISSUE. IT'S A STRENGTH ISSUE.

Steve says GOTCHA. CHRIS, I WONDER HOW... ARE THERE DAYS YOU SIT BEHIND THAT DESK OF YOURS AND YOU SAY TO YOURSELF: I CAN'T BELIEVE HOW CRAZY THIS IS. WE'VE BEEN ENCOURAGING PEOPLE TO USE MADE-IN-ONTARIO WOOD PRODUCTS TO DO SO MUCH OF THEIR BUILDING FOR SUCH A LONG PERIOD OF TIME. WE'RE FINALLY AT THE POINT WHERE PEOPLE WANT TO DO IT, LOVE TO DO IT, YET WE HAVE A SHORTAGE GOING ON AND PRICES GOING THROUGH THE ROOF. DO YOU FEEL A BIT SNAKE-BIT RIGHT NOW?

Chris says IT'S TERRIBLE, RIGHT? AND, YOU KNOW, I USED TO SIT HERE AT THIS DESK AND HAVE FIVE SALES GUYS A DAY ROLLING THROUGH TO TRY TO SELL ME LUMBER. YOU KNOW, IT'S KIND OF WEIRD TO HAVE THE SHOE ON THE OTHER FOOT IN THE SENSE THAT NOW I'M HUNTING THEM DOWN TRYING TO BUY STUFF. SO IT JUST DOESN'T FEEL RIGHT, YOU KNOW? WHEN THE OWNER OF A BUSINESS IS OUT THERE TRYING TO FIND THE PRODUCT WHEN I USED TO BE ABLE TO SIT HERE AND THEY WOULD COME TO ME, IT'S A LITTLE DIFFERENT IN THAT SENSE. AND, YOU KNOW, IT'S TERRIBLE. BECAUSE I GET, YOU KNOW, LIKE I SAID EARLIER, DOZENS OF CALLS A DAY, YOU KNOW, WHEN'S IT COMING IN? WHEN AM I GOING TO SEE THIS? I NEED TO BUILD THIS. HAVE YOU GOT YOUR MATERIAL YET? HAVE YOU GOT YOUR MATERIAL YET? I HAVE ABOUT TEN PEOPLE WHO EMAIL ME EVERY TUESDAY SAYING, HEY, DO YOU HAVE YOUR CEDAR IN FOR THE YEAR? EVERY TUESDAY. NOT THIS WEEK. CHECK BACK IN NEXT WEEK. SAME BAT TIME, SAME BAT CHANNEL. HOPEFULLY I'LL GIVE YOU A YES AT SOME POINT. IT'S VERY FRUSTRATING, RIGHT, YOU KNOW WHAT I MEAN? WE HAVE GREAT CUSTOMERS. THE LAST THING YOU WANT AS A BUSINESS OWNERS IS YOUR CUSTOMERS TO GO TO THE GUY DOWN THE STREET BECAUSE YOU NEVER KNOW IF THEY'RE GOING TO COME BACK, RIGHT?

Steve says I AM HEARING STORIES, PAUL, THAT THERE ARE PEOPLE, FOR EXAMPLE, WHO WOULD ACTUALLY, IN BRITISH COLUMBIA FORESTS, THESE ARE INDIVIDUAL CITIZENS, TAKE DOWN TREES ON THEIR OWN... I GUESS THEY'RE STEALING THEM, RIGHT? THEY TAKE THEM DOWN ON THEIR OWN AND SCHLEP THEM BACK TO THEIR OWN CAMPS OR OWN PROPERTIES AND DO WHAT THEY WILL WITH THEM. IS THIS A WIDESPREAD THING RIGHT NOW?

Paul says I DON'T THINK IT'S WIDESPREAD, BUT IF YOU GO BACK TO THE MIDDLE PART OF LAST DECADE, A CUBIC METRE OF MOUNTAIN PINE BEETLE-KILLED LODGEPOLE PINE WAS SELLING FOR 25 CENTS. TODAY, YOU KNOW, AND GRANTED, IT'S KILLED VERSUS NOT KILLED, BUT THERE'S NO MORE KILLED TIMBER LEFT... OR NOT MUCH OF IT LEFT. SO THE GREEN TIMBER IS SELLING FOR 35-PLUS DOLLARS PER CUBIC METER. SO, YES, THERE'S A HUGE INCENTIVE TO GO OUT AND HARVEST THESE LOGS AND SELL THEM. BUT OBVIOUSLY THE PROVINCE OF QUEBEC IS DOING THEIR BEST TO PREVENT THAT FROM... I'M SORRY, OF BRITISH COLUMBIA IS DOING THEIR BEST TO PREVENT THAT FROM HAPPENING.

Steve says I THINK MAYBE HALF A DOZEN TIMES OVER THE PAST COUPLE OF DECADES WE'VE ENDED UP HAVING TO COVER THE STORY OF A SOFTWOOD LUMBER DISPUTE BETWEEN THE GOVERNMENT OF THE UNITED STATES AND THE GOVERNMENT OF CANADA, AND I THINK THOSE KINDS OF TRADE DISPUTES OVER WOOD ONLY GO BACK ABOUT AS FAR AS YOUR REVOLUTIONARY WAR IN THE 1770s. DO YOU THINK THAT WITH THE NEW BIDEN ADMINISTRATION IN PLACE AND A GOVERNMENT IN CANADA AT THE MOMENT WHICH SEEMS TO BE IDEOLOGICALLY MORE SYMPATICO WITH THEM, THAT THERE'S ANY POSSIBILITY OF GETTING SOME KIND OF MORE PERMANENT SOLUTION TO THAT PROBLEM NOW?

Paul says I DON'T THINK THERE IS, ACTUALLY. SO I DON'T THINK THAT THE ACTUAL PRESIDENTIAL ADMINISTRATION IS ALL THAT IMPORTANT AS TO, YOU KNOW, TO WHETHER OR NOT WE HAVE AN AGREEMENT. YOU KNOW, DEFINITELY THE DISPUTE GOES BACK FOR CENTURIES, BUT, YOU KNOW, CERTAINLY WE... THE CURRENT ROUND OF DISPUTES STARTED IN THE EARLY 1980s, AND WE ALL KNOW WE'VE SEEN A LOT OF DIFFERENT GOVERNMENTS AND A LOT OF DIFFERENT PHILOSOPHIES IN THE UNITED STATES SINCE THEN. AND THROUGHOUT ALL OF IT, YOU KNOW, THERE'S BEEN THE TRADE DISPUTE HAS BEEN REALLY FRONT AND CENTRE FOR A NUMBER OF DIFFERENT STATES. SO ONE INTERESTING THING, ACTUALLY, IF YOU THINK ABOUT IT, IS THE CURRENT DISPUTE WAS ACTUALLY INITIATED UNDER THE OBAMA ADMINISTRATION AND FINALLY IMPLEMENTED UNDER THE TRUMP ADMINISTRATION. SO THIS ACTUALLY SPANS TWO ADMINISTRATIONS. SO ONE OF THE REASONS WHY IS IF YOU THINK ABOUT HOW, YOU KNOW, WHAT SORT OF PRESSURES CAN YOU BRING TO BEAR ON THE U.S. GOVERNMENT AND IF YOU'RE LOOKING AT THE WAY OUR SENATE IS CREATED, IT'S EACH STATE HAS TWO SENATORS. SO FOR SOME STATES, YOU MAY HAVE A VARIETY OF ISSUES THAT ARE OF PRIME IMPORTANCE TO THOSE SENATORS. BUT FOR OTHER STATES AND AGRICULTURAL STATES IN PARTICULAR, THERE'S REALLY ONLY A FEW ISSUES THAT ARE OF UTMOST IMPORTANCE TO THOSE PEOPLE. SO IF YOU LOOK ACROSS STATES LIKE OREGON, WASHINGTON, MISSISSIPPI, ALABAMA, ARKANSAS... SO IN SOME OF THESE STATES YOU HAVE, YOU KNOW, TIMBER IS... IN THE TIMBER INDUSTRY IS VERY IMPORTANT TO THOSE STATES. AND SO THESE... I'M NOT GOING TO SAY THEY'RE ONE-ISSUE... IT'S JUST ONE ISSUE, BUT IT'S ONE ISSUE OF PRIME AND PARAMOUNT IMPORTANCE TO THESE SENATORS SO THEY WILL PUSH HARD FOR THAT. IF YOU CAN GET TOGETHER A COALITION OF SENATORS FROM SEVEN OR EIGHT DIFFERENT STATES, YOU'RE TALKING 14 TO 16 SENATORS THAT CAN REALLY SWING SOMETHING. SO YOU DO END UP WITH A LOT OF PRESSURE BEING PUT ON ALL ADMINISTRATIONS FROM THESE MORE RURAL SENATORIAL DISTRICTS.

The caption changes to "Producer: Harrison Lowman, @harrisonlowman."

Steve says GOTCHA. PAUL, SUE, CHRIS, GREAT OF YOU TO JOIN US ON TVO TONIGHT. KEEP THE FAITH. SEE YOU SOMETIMES DOWN THE ROAD, I HOPE.

Paul says THANKS, STEVE.

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