A northern B.C. startup says it has found a way to turn what much of the industry treats as junk wood into higher value lumber, a pitch arriving as British Columbia’s forest sector wrestles with mill closures, tariff pressure and a growing political fight over permitting delays.
Deadwood Innovations, founded in 2019 and based in Fort St. James, is developing and scaling technology that upgrades low grade lumber and underutilized species into engineered wood products, including material aimed at premium markets and outdoor applications, according to company materials and partner statements.
The company is partnered with the Nak’azdli Development Corporation, the economic arm of the Nak’azdli Whut’en First Nation, which holds equity in Deadwood and provides governance representation, facility management and ownership, the company says.
Backing from venture capital and government
Vancouver based venture capital firm Chrysalix Venture Capital announced an investment in Deadwood in December 2024, saying the technology is designed to convert low value feedstocks and waste into higher value products.
“At Chrysalix, we recognize the significant challenges facing the forestry industry today, including rising costs, price volatility, shrinking margins, and the growing demand for sustainable products,” Alfred Lam, a partner at Chrysalix, has said.
In the same statement, Deadwood chief executive Owen Miller said the partnership is intended to help the company scale. “We chose to partner with Chrysalix because they are one of the rare VC firms that truly understand industrial innovation and the unique challenges and opportunities within the forestry sector,” Miller said.
Deadwood’s work has drawn government and institutional support as B.C. looks for ways to extract more value from each tree and diversify the fibre basket.
A proprietary process for upgrading wood
In July 2022, the province said it had provided Deadwood $200,000 over two years through the Indigenous Forest Bioeconomy Program to help build a pilot scale plant at the former Tl’Oh Forest Products mill site in Fort St. James.
Then forests minister Katrine Conroy said strengthening the sector requires innovation and Indigenous participation. “The work being done by Deadwood Innovations is a perfect example of this vision in action,” Conroy said.
The Tl’Oh mill was permanently curtailed in 2014 after the mountain pine beetle epidemic hit production, and Deadwood’s pilot project was expected to provide 25 permanent full time jobs and 30 part time or seasonal jobs.
The company describes its core approach as a wood modification process that uses a proprietary biomass derived lignin solution, mechanical forces and temperature. In 2023, Miller said, “We accomplish wood modification through an application of a proprietary biomass derived lignin solution, mechanical forces and temperature.”
Mass timber housing for rural communities
Deadwood is also pushing into housing, tying engineered wood to the affordability squeeze in northern communities.
A profile published in December 2025 said Deadwood, Nak’azdli Development Corporation and the University of Northern British Columbia are developing a prefabricated mass timber housing system designed for rural communities, with kits built in controlled facilities during winter months and assembled on site in days. Miller was quoted as saying the work aims to “check all boxes” for affordability and durability.
Deadwood’s expansion push lands as B.C.’s forestry economy continues to shrink relative to other resource sectors.
Budget documents report this month forecast nearly $1.3 billion in natural gas royalties for the 12 months ending March 31, 2027, while forecasting $521 million in forestry revenue for 2026 to 2027, far below levels seen earlier in the decade. The province also expects depressed harvest volumes to persist and has introduced a temporary stumpage payment deferral program for most of 2026.
Navigating permitting delays and a contracting sector
Industry leaders and politicians have increasingly pointed to policy and permitting as central constraints.
In September 2025, Forests Minister Ravi Parmar said a review of BC Timber Sales, which manages about 20 per cent of the annual allowable cut, produced 54 recommendations, including expanding community forests in Vanderhoof, Fraser Lake and Fort St. James and making it easier for smaller companies to bid at auctions. Parmar said the work points to “stability,” “certainty,” and “predictability.”
B.C. Conservative interim leader Trevor Halford struck a sharper tone at the Truck Loggers Association convention in January, blaming the downturn on systems that are not moving permits quickly enough. “This crisis is not about forests disappearing,” Halford said. “It is about permits not moving, decisions not being made, and systems that do not function at the pace this sector requires.”
For Deadwood, the bet is that new technology can carve out a lane even as the broader sector contracts, by turning low value fibre into higher value products and pairing that with new markets, including prefabricated housing in the North.
Geoff Russ is a writer for Resource Works, a non-partisan organization that champions responsible resource development in British Columbia and Canada. Reach Geoff at [email protected].
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