Since the COVID-19 pandemic began, the price of a 2x4 in Canada has more than doubled.
This chart shows the change in softwood lumber prices since December 2019, using data from Statistics Canada's industrial product price index. The index shows prices relative to January 2020, which represents 100 on the chart. In April, the latest month available from Statistics Canada, lumber prices reached 263.4 on the index, indicating a 163.4% increase since January 2020.
A lumber shortage caused by pandemic-related disruptions to supply chains has been the reason most often credited with the drastic price increase.
Madison's Lumber Reporter, an industry newsletter, said lumber prices have continued to rise throughout May as well, reaching a record-setting US$1,600 per 1,000 feet.
Paul Jannke, principal of Forest Economic Advisors, said that Canadian lumber prices are going to remain high through the rest of the year.
"If you're going to build a deck this summer you will be paying three times more for your lumber than you would have two years ago," he told CTV News in April.
Rising lumber prices are in turn increasing the cost of building a new home. The chart also shows home construction costs in the Edmonton and Calgary metropolitan areas relative to 2017, using quarterly data from Statistics Canada's building price construction index. Between Q2 2020 when lumber prices began to take off and Q1 of 2021, the cost of constructing residential buildings in the Edmonton area has increased 13.3%, while in the Calgary area it increased 17.1%, the highest of any metropolitan area in the country.
While construction costs are influenced by many factors, such as permit fees and workers' wages, lumber prices appear to be driving much of the construction cost increases over the past few months. Kevin Lee, CEO of the Canadian Home Builders' Association, said that rising lumber prices alone raised construction costs nationwide by tens of thousands of dollars, and a survey conducted by the organization concluded they have led to an increase in the average price of a new home by $20,000.