Saskatchewan’s lumber suppliers and home builders are riding the highs and lows of the COVID-19 economy.
At the start of the pandemic, Warman Home Centre near Saskatoon was bracing for an uncertain summer as a building materials retailer.
“We didn’t know how hard COVID would hit and how much it would affect sales,” said Rick Casavant, Warman Home Centre president.
“We were clearing out inventory because we thought there would be a lot less demand.”
Instead, Casavant said, with more people working from home — and staying home during the summer — his store saw an increased demand for lumber.
At the same time, major Canadian lumber producers were forced to curtail production due to the COVID-19 pandemic. Casavant said this caused lumber prices to double, even triple.
He noted the price for oriented strand board, used for walls and roofing, retailed between $15 and $17 per board this spring. This week it’s selling between $35 to $37.
“That’s an all-time high in history. A few years back we saw it hit the $24 mark, but nothing like this. And it’s 95 per cent COVID-related,” he said.
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“I don’t think you’re going to see the market drop at the retail level for customers probably until the end of November, maybe mid-November, and possibly December for some items.”
Casavant said he expects up to a 20-per cent decrease, however, it will stay at that higher-than-normal rate for the short term and even beyond.
“It’s the reality of what will be the new. I don’t think it’s going to go down much,” he said, adding supply will still be limited for the next four to six months at least.
The Regina and Region Homebuilders’ Association told Global News it estimates the higher price for forest products adds about $10,000 to the cost of building the typical new Regina home.
The association said the volatility also makes it more difficult for the industry to price new projects.
Colin Chorneyko, the president of Munro Homes in Regina, said there has been an uptick in new home builds and projects over the summer.
“We’ve actually sold quite a few houses recently, and so before we even have them started, we have huge lumber increases, which has affected my bottom line,” Chorneyko said.
“I sold them the house, at the price, and I have to honour that. So that’s one part it. Now anybody new we’re working with, our price is just that much higher.”
Chorneyko said for Munro Homes, which builds projects in the $600,000 plus range, increased lumber prices have added around $30,000 extra per home.
“We have to work with that amount that we’re having to eat on all the houses that we’ve done, or that we have sold, and I’m still not sure if that is the high end of it,” he said.
“That’s across the board, I’m hearing that from everybody – from furnaces, windows and doors, you name it – we’re running into shipment issues,” he said.
The Canadian Homebuilders’ Association CEO Kevin Lee, told Global News it has been lobbying the federal government to assist with supply chain issues, including transportation.
“The rail industry, which has mostly been used for transporting lumber, has been significantly disrupted and it is still catching up,” Lee said, adding lumber is now being hauled mostly by truck.
The association is also rallying to have residential construction, and supply chain production, deemed essential services in the event of a second wave of COVID-19.
“It’s a complicated situation, but something they have to be vigilant on. And frankly, for consumers, something to be aware of — unfortunately, prices have gone up.”
Lee said the association is also asking Ottawa to help with the back-to-work transition for companies that curtailed production, with enough personal protective equipment supply in case of a second wave.
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