Spike in lumber prices worries some Lethbridge homebuilders

Jeff Gordon says skyrocketing lumber prices are threatening his livelihood.

“With the rising costs, the builders are literally contemplating just stopping building,” Gordon said.

“It means I have nothing to do and it means my eight employees have nothing to do,” he said.

“I’m sure I’m not the only framing company in town that’s having this problem.”

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Despite a lull in demand due to COVID-19, he says prices for lumber products are nearly double what he typically sees.

“Yes, we’re busy now, but we were slow for a couple months there,” Gordon said. “And technically we were all labelled as essential, so there was no reason for the companies to slow down.”

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Now he and local home-building companies are shouldering the burden.

Stephen Amonson, Lethbridge president of Tacada Residential, says sky-high prices could mean a halt to new projects.

“It might be better for us just to stop production for 90 days, 120 days, and curtail the demand in order to move forward.

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“That puts jobs in jeopardy, that puts livelihoods in jeopardy and we have wrestled with this for almost a month now,” Amonson said.

“I don’t know who to point the finger at, but I think ultimately that’s what I’d like the government to look at. Because I’m told people can’t log to capacity and I’m confused.”

Brad Hoover from Logic Lumber says pressure from local business may not impact prices as much as they think.

“When we have an increase in demand and a shortage of supply, the prices increase.

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“Even though we’ve seen an increase in the Canadian market, what really dictates our pricing is the U.S. market.

“We have seen more housing starts than normal in the U.S., we’ve seen the increase in demand in the U.S., we ship a lot of lumber down to the U.S. and that’s really what’s spiked our demand.”

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He adds that some lumber mills did reduce or halt operations earlier this spring when lumber prices were at rock bottom, but it hasn’t impacted their inventory yet locally.

“We certainly see that there are some panic buyers out there and we’re trying to manage that as much as we can here,” Hoover said.

“Shortages have been talked about. At this point we haven’t seen any. We’ve seen the supply chain hold steady.”

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In the meantime, Gordon waits to see exactly how his business will be impacted.

“It just reflects back on all the labour costs. It’s all the labour costs that are getting dinged,” Gordon said.

“Every single company that has labourers, they’re the ones that are getting dinged.

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“And what do I do? I can’t go to my employees and say, ‘Hey, work for a dollar less.’ They’ll laugh at me.”

Those involved in the industry expect the prices will drop again, they just don’t know when.