UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

--------------------------

FORM S-1/A-5A-6

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

--------------------------

JEWETT-CAMERON TRADING COMPANY LTD.

(Exact name of registrant as specified in its charter)

32275 N.W. Hillcrest

North Plains, Oregon 97133

(503) 647-0110

 (Address, including Zip Code, and Telephone Number,

Including Area Code, of Registrant's Principal Executive Offices)

Charles Cleveland

Suite 304

Rock Point Centre

Spokane, Washington 99201

(509) 326-1029

(Name, Address, including Zip Code, and Telephone Number,

including Area Code, of Agent for Service)

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT

If any of the securities being registered on this form are being offered on

a delayed or continuous basis pursuant to Rule 415 under the Securities Act of

1933, check the following box. /X/

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / /

--------------------------

[1]

Pursuant to Rule 457(g) under the Securities Act of 1933, the registration fee is based on the common stock issuable upon the completion of this offering.  

[2]

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

- 2 -

#

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER AND SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION

Prospectus

500,000 shares of common stock at $20 per share

, 2006

Jewett-Cameron Trading Company Ltd.

32275 N.W. Hillcrest

North Plains, Oregon 97133

(503) 647-0110

Our common shares are traded on the NASDAQ Small Cap Market under the symbolJCTCF and on the Toronto Stock Exchange under the symbolJCT.

This is a self-underwritten offering.

This prospectus relates to our sale of 500,000 shares of common stock to the public.

We will receive $10,000,000from the sale of this stock before paying expenses of $125,000.  All dollar amounts referred to in this prospectus are in U.S. dollars, unless specified in Canadian.

We are not required to sell any specific number of shares or dollar amount but we will use our best efforts to sell the shares. We have not made any arrangements to put investorsinvestor’s money into any escrow or similar account. The money raised will go directly to us.

We will end the offering when we have sold all of the offered common stock, but no later than January 5, 2007.July

, 2008.

Investing in our common stock involves a high degree of risk.

See “ Risk“Risk Factors” beginning on page 7.9.

 Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is

.

- 3 -

#

TABLE OF CONTENTS

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

- 4 -

#

SUMMARY INFORMATION

This summary highlights information contained elsewhere in this prospectus. Because it is a summary, it does not contain all of the information that you should consider before investing in the shares. You should read the entire prospectus carefully before buying shares in this offering.

Our Company

We were incorporated in British Columbia, Canada, on July 8, 1987, as a holding company for Jewett-Cameron Lumber Corporation (“JCLC”).  We acquired all of the shares of JCLC through a stock-for-stock exchange on July 13, 1987, and at that time Jewett-Cameron Lumber Corporation became a wholly owned subsidiary of ours.  At this time we have no assets in Canada or have any Canadian directors.Canada.

Jewett-Cameron Lumber Corporation ("JCLC") was incorporated in the state of Oregon, USA, in September 1953.  During the next 31 years it developed a good reputation as a small lumber wholesaler based in Portland, Oregon.  In September 1984, the original stockholders sold their interest in the corporation to a new group of investors and two of those investors, Donald M. Boone, our President, and Michael Nasser, our Corporate Secretary, are active in our company today.

We acquired Material Supply International ("Material Supply") in early 1986 and it became a wholly owned subsidiary of Jewett-Cameron Lumber Corporation.  MSI-PRO CO. was incorporated in Oregon, USA. We import and distribute   pneumatic air tools and industrial clamps through MSI-PRO CO.       

We bought some of the assets of a company called, AgriBioTech Inc. about three and a half years ago. These assets were a group of buildings; thirteen plus acres of land; and, some miscellaneous equipment. These assets were located at 31345 N.W. Beach Road in Hillsboro, Oregon. We are presently using this facility for seed and grain processing and storage. In October 2000 we incorporated a company that we called Jewett-Cameron Seed Company. Jewett-Cameron Seed Company was formed around the assets which we purchased from AgriBioTech Inc. Today Jewett-Cameron Seed Company is a wholly owned subsidiary of Jewett-Cameron Lumber Corporation and we store, process and sell seed and grain there.

Our wholly owned subsidiary, Greenwood Products, Inc. (“GPI”) was incorporated in Oregon, USA in February 2002. We formed this company after Jewett Cameron Lumber Corporation acquired some of the assets of Greenwood Forest Products, Inc. of Portland, Oregon.  This business involves the processing and distribution of industrial wood and other specialty building products, principally to original equipment manufacturers, primarily in the transportation and recreational boating industries in the United States.  Approximately half of GPI’s sales are attributable to the recreational boating industry and are generally stronger during the winterSpring and Summer months.  The value-added-nature of our wood components are that they will resist rust, rot and flame.  They also reduce sound and have a high degree of structural strength per pound.

This is a self-underwritten offering.

In this prospectus “we,” “us” and “our” refer to Jewett-Cameron Trading Company LtdLtd. and its direct and indirect subsidiaries.

THE OFFERING

SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

You should read the summary consolidated financial data presented below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes to those financial statements appearing elsewhere in this prospectus. The summary consolidated financial data at and for the fiscal years ended August 31, 2005, 2004, 2003, 2002, 2001 and 2000 are derived from our consolidated financial statements. We derived the statements of operations data for the threenine months ended November 30, 2005,May 31, 2006, as well as the balance sheet data as of November 30, 2005,May 31,2006, from our unaudited interim financial statements included elsewhere in this prospectus. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of our management, reflect all adjustments, which include only normal recurring adjustments, necessary to sta testate fairly our financial position as of November 30, 2005May 31, 2006 and the results of our operations and our cash flows for the threenine months ended November 30, 2005.May 31, 2006. Basic earnings per share is computed using the weighted average number of shares of common stock. Amounts presented herein as basic average shares and diluted average shares is a weighted amount. Book value per share excludes the effect of any outstanding stock options. Results for past periods are not necessarily indicative of results that may be expected for any future period.

At or for the Years Ended August 31^st

($ in 000)

- 7 -

#

RISK FACTORS

You should carefully consider the following risk factors and all other information contained in this Prospectus before you decide to invest in our common stock. There is a great deal of risk involved.  Any of the following risks could affect our business, its financial condition, its potential profits or losses and could result in you losing your entire investment if our business became insolvent.The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties, including those not presently known to us or that we currently deem immaterial, also may result in decreased revenues, increased expenses or other events which could result in a decline in the price of our common stock.

We may decide to acquire assets or enter into business combinations, which could be paid for, either wholly or partially with our common stock and if we decide to do this our current shareholders would experience dilution in their percentage of ownership.

Our bylawsArticles of Incorporation give our Board of Directors the right to enter into any contract without the approval by our shareholders. Therefore, our Management could decide to make an investment (buy shares, loan money, etc.) without shareholder approval.  If we acquire an asset or enter into a business combination, this could include exchanging a large amount of our common stock, which could dilute the ownership interest of present stockholders.

We could experience a decrease in the demand for our products resulting in lower sales volumes, which would give us less capital with which to operate.

In the past we have experienced decreasing annual sales in the areas of home improvement products (sold thru JCLC) and industrial tools. The reasons for this can be generally attributed to worldwide economic conditions, specifically those pertaining to lumber prices; demand for industrial tools; and, consumer interest rates. If economic conditions continue to worsen or if consumer preferences change, we could experience a significant decrease in profitability.

Production time and the overall cost of our products could increase resulting in lower profit margins for our products if any of our primary suppliers are lost or if any of them increased their prices of raw materials.

Our manufacturing operation, which consists of cutting fencing material to specific sizes and shapes, depends upon obtaining adequate supplies of lumber on a timely basis.  If these supplies of lumber were not received on a timely basis, we could experience lower profit margins and possibly lose sales of these products.                                  

Our shareholders could experience significant dilution if we issue our authorized preferred shares.

We are authorized to issue up to 10,000,000 shares of preferred stock, without par value per share.  Our preferred stock may bear such rights and preferences, including dividend and liquidation preferences, as our boardBoard of Directors may decide.  Any such preferences may operate to the detriment of the rights of the holders of the Common Stockcommon stock and would cause dilution to these shareholders.

Our top ten customers represent 38%36% of our business and if we lost them it could be possible for us to experience a significant decrease in sales.

Our top ten customers represent38% 36% of our business.  If these customers were lost and could not be replaced, we would experience a significant decrease in sales and would have to cut back our operations.  Our top ten Customerscustomers are in the United States and in the marine and retail building industries. Those relationships are not longevity based, but rather are based on price, quantity, and service, and similar preferences.  We have no long-term contracts with these customers.

We could experience delays in the delivery of our products causing us to lose business.

We purchase our products from other vendors and a delay in shipment from these vendors to us could cause significant delays in our delivery to our customers. This could result in a decrease in sales orders to us and we would experience a loss in profitability.

- 8 -

We could lose our bank credit agreement and this could result in our not being able to pay our creditors.

We have a line of credit with U.S. Bank in the amount of $8 million. We are currently in compliance with the requirements of our existing line of credit. If we lost this credit it could become impossible to pay some of our creditors on a timely basis.

There is no minimum number of shares that must be sold in this offering and, we are placing none of the funds received from the offering in an escrow account.

We have not established a minimum amount of proceeds that we must receive in the offering before any proceeds may be accepted. Once accepted, the funds will be deposited into an account maintained by us and considered our general assets. None of the proceeds will be placed in any escrow, trust or other arrangement; therefore, there are no investor protections for the return of subscription funds once accepted.

If we fail to maintain an effective system of internal controls, we may not be able to detect fraud or report our financial results accurately, which could harm our business and we could be subject to regulatory scrutiny.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), we will be required, beginning in fiscal year 2007, to perform an evaluation of our internal controls over financial reporting and have our independent registered public accounting firm test and evaluate the design and operating effectiveness of such internal controls and publicly attest to such evaluation. We have not yet prepared anany internal plan of action for compliance with the requirements of Section 404 which includes a timeline and scheduled activities, although as of the date of this filing we have not yet completed theor any effectiveness evaluation. Although we believe our internal controls are operating effectively, we cannot guarantee that we will not have any material weaknesses as reported by the our independent registered public accounting firm. Compliance with the requirements of Section 404 is expected to be expensive and time-consuming. If we fail to complete this evaluation in a timely manner, or if our independent registered public accounting firm cannot timely attest to the our evaluation, we could be subject to regulatory scrutiny and a loss of public confidence in our internal controls. In addition, any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations.

FORWARD-LOOKING STATEMENTS

The statements included in this Prospectus regarding future financial performance and results and the other statements that are not historical facts are forward-looking statements. You can identify forward-looking statements by terminology including “could,” “may,” “should,” “except,” “plan,” "expect," "project," "estimate," "predict," "anticipate," "believes", "intends", and the negative of these terms or other comparable terminology. Such statements are based upon our current expectations and involve a number of risks and uncertainties and should not be considered as guarantees of future performance. These statements include, without limitation, statements about our market opportunity, our growth strategy, competition, expected activities and future acquisitions and investments and the adequacy of our available cash resources. These statemen tsstatements may be foundfo und in the sections of this prospectus entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” Investors are cautioned that matters subject to forward-looking statements involve risks and uncertainties, including economic, regulatory, competitive and other factors that may affect our business. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions. Readers are cautioned not to place undue reliance on these forward looking statements.

USE OF PROCEEDS

We estimate that our net proceeds from the sale of 500,000 shares of our common stock in this offering, based upon an assumed offering price of $20.00 per share, will be $9,875,000.  We estimate that our costs associated with this offering will be $125,000, which includes legal, accounting and printing expenses.

If we raise only 75% of the Offering, we will allocate the proceeds of this offering for general corporate purposes, including working capital to meet anticipated future sales growth.  

- 9 -If we raise only 50% of the Offering, we will allocate the proceeds of this offering general corporate purposes, including working capital to meet anticipated future sales growth.  

If we raise only 25% of the Offering, we will allocate the proceeds of this offering for general corporate purposes, including working capital to meet anticipated future sales growth.

We do not have more specific plans for the net proceeds from this offering.  We have not yet determined all of our expected expenditures, and we cannot estimate the amounts to be used for each purpose set forth above.  The amounts and timing of any expenditure will vary depending on the amount of cash generated by our operations, competitive developments and the rate of growth, if any, of our business.  Accordingly, our management will have significant flexibility in applying the net proceeds of this offering.  Pending use of the net proceeds as described above, we intend to useinvest the net proceeds of this offering to reducein short-term, interest bearing, investment grade securities.

As of May 31, 2006, our level of debt.  Our level of bank debt was $748,963.46$76,446 and our level of mortgage debt was $2,174,691 as of February 9, 2006.$2,099,373. The mortgage debt is toheld by U.S. Bank; the interest rate is 6.52% and the maturity date is 6/15/2010. The bank indebtedness is held by U.S. bank and is secured by an assignment of accounts receivable and inventory. Interest is calculated at either prime or the LIBOR rate plus 190 basis points.  The weighted average interest rate for the three-monthnine month period ended 11/30/2005May 31, 2006 was 6.78% (2004 - 4.93%7.74% (2005 – 5.20%).  No indebtedness was incurred within one year of the date of this Prospectus.

If we raise only 75% of the Offering, we will allocate the proceeds of this offering among the debt as follows: We plan to pay all bank debt and all mortgage debt. Any remaining funds will be used for working capital.

If we raise only 50% of the Offering, we will allocate the proceeds of this offering among the debt as follows: We plan to pay all bank debt and all mortgage debt. We plan to pay all bank debt and all mortgage debt. Any remaining funds will be used for working capital.

If we raise only 25% of the Offering, we will allocate the proceeds of this offering to pay all bank debt and allocate the remaining funds to reduce our mortgage debt.

We plan to allocate the proceeds as follows to eliminate both our mortgage debt and our U.S. Bank debt. The balance will be utilized for general working capital purposes.

In the opinion of our management, we will not default on either category of debt in the event that minimal proceeds are raised from this offering.

DIVIDEND POLICY

Our board of directors has never declared a cash dividend. We do not have any present intent to pay any cash dividends. Any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements, general business condition and other factors that our board of directors may deem relevant.

 DETERMINATION OF OFFERING PRICE

The Offeringoffering price of the Common Shares was arbitrarily determined by us.  The factors considered in determining the Offering price were our financial condition and prospects, our operating history and the general condition of the securities market.  The Offering price is not an indication of and is not based upon our actual value. It bears no relationship to the current market price for our common stock, our book value, assets or earnings or any other recognized criteria of value.  The Offering price should not be regarded as an indicator of the future market price of our securities.

 DILUTION

If you invest in our common stock, your interest will be diluted immediately to the extent of the difference between the public offering price of our common stock in this offering and the pro forma book value of our common stock immediately after completing this offering.  The net tangible book value of our common stock as of November 30, 2005May 31, 2006 was $10,064,511$11,242,739 or $6.57$7.34 per share. (Post-split)    The historical net tangible book value per share of our common stock is the difference between our net tangible assets and our liabilities, divided by the number of common shares outstanding.

Our pro forma net tangible book value as of November 30, 2005May 31, 2006 was approximately $10,182,011or$11,360,239 or approximately $6.43$7.17 per share, after giving effect to the exercise of share purchase options to purchase an aggregate of 52,500 shares of common stock by cash payment of $117,500. Pro forma net tangible book value per share represents the amount of our total net tangible assets less total liabilities, divided by the pro forma number of shares of common stock outstanding before giving effect to the sale of the shares of our common stock in this offering.

- 10 -

Dilution if 100% of the Offering is sold

After giving effect to the sale of the 500,000 shares of common stock in this offering, at an assumed public offering price of $20.00 per share, less the estimated expenses of the offering, our pro forma net tangible book value per share as of November 30, 2005May 31 2006 would have been $9.87$10.39 if none of the stock options had been exercised and $9.69$10.19 if all of the stock options had been exercised. This represents an immediate increasedecrease in net tangible book value per share fully diluted of $0.14$0.17 to existing shareholders and immediate dilution in net tangible book value of $3.12$2.85 per share (fully diluted) to new investors purchasing our common stock in the offering at the public offering price. The following table illustrates the per share dilution option:

The following table summarizes the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid by the existing stockholders and by new investors in this offering, before deducting the estimated expenses of the offering.

The share data in the table above is based on shares outstanding as of November 30, 2005.May 31, 2006.  

Dilution if 50% of the Offering is sold

After giving effect to the sale of the 250,000 shares of common stock in this offering, at an assumed public offering price of $20.00 per share, less the estimated expenses of the offering, our pro forma net tangible book value as of November 30, 2005May 31, 2006 would have been $8.45$9.04 if none of the stock options had been exercised and $8.27$8.85 if all of the stock options had been exercised. This represents an immediate increasedecrease in net tangible book value per share fully diluted of $0.14$0.17 to existing shareholders and immediate dilution in net tangible book value of $1.70$1.51 per share (fully diluted) to new investors purchasing our common stock in the offering at the public offering price. The following table illustrates the per share dilution if 50% of the offering is sold:

- 11 -

The following table summarizes the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid by the existing stockholders and by new investors in this offering, before deducting the estimated expenses of the offering.

The share data in the table above are based on shares outstanding as of November 30, 2005.May 31, 2006.  

Dilution if 10% of the Offering is sold

After giving effect to the sale of the 50,000 shares of common stock in this offering, at an assumed public offering price of $20.00 per share, less the estimated expenses of the offering, our pro forma net tangible book value as of November 30, 2005May 31, 2006 would have been $6.99$7.66 if none of the stock options had been exercised and $6.84$7.48 if all of the stock options had been exercised. This represents an immediate decrease in net tangible book value per share fully diluted of $0.14$0.17 to existing shareholders and immediate dilution in net tangible book value of $0.27$0.14 per share (fully diluted) to new investors purchasing our common stock in the offering at the public offering price. The following table illustrates the per share dilution if 10% of the offering is sold:

The following table summarizes the number of shares of common stock purchased from us, the total consideration paid and the average price per share paid by the existing stockholders and by new investors in this offering, before deducting the estimated expenses of the offering.

The share data in the table above are based on shares outstanding as of November 30, 2005.  The number of outstanding shares at that date includes 52,500 shares of common stock issuable upon exercise of outstanding stock options at a weighted average exercise price of $2.83 per share.May 31, 2006.  

- 12 -

CAPITALIZATION

The following table shows our capitalization, as of November 30, 2005.May 31, 2006.

You should read the following table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.

SELLING SECURITY HOLDERS

There are no Selling Shareholders in this offering.

 PLAN OF DISTRIBUTION

This is not an underwritten offeringand we are not required to sell our shares.

We are offering the shares on a "best efforts" basis directly through our officers and directors, who will not receive any commissions or other remuneration of any kind for selling shares in this offering, other than reimbursement of offering expenses incurred by them. The only officers and directors who will be selling the stock on behalf of our company are Donald M. Boone, President/Director, Alexander B. Korelin, Director, Ted Sharp, Director and Michael Nasser, Secretary. Their efforts will include personally soliciting individuals. There will be no forms of mass mailings or similar mass solicitations.  This offering will commence promptly after the effectiveness of the registration statement of which this prospectus is a part. This offering will be made on a continuous basis until January 5, 2007.July   , 2008. We may terminate this offering earlier if we sell all of the shares being offered or we decide to cease selling efforts.

 This offering is a self-underwritten offering, which means that it does not involve the participation of an underwriter to market, distribute or sell the shares offered under this prospectus.Prospectus. We may sell shares from time to time in one or more transactions directly by us or, alternatively, we may offer the shares through brokers or sales agents, who may receive compensation in the form of commissions or fees. (We would expect to hire broker-dealers to sell shares in the offering if they express an interest in doing so and we are unable to sell the offering on our own) We may also hire licensed broker-dealers (“Agents”) to sell these shares on a “best efforts” basis if they express an interest in doing so.  There are no underwriters involved in this offering.  If we retain Agents to sell these shares, we will pay the Agents a selling commission of up to 10% of the gross offering proceeds attributable to the shares, which they sell. If we enter into an agreement after the effectiveness of this Prospectus, to sell shares to a broker-dealer as principal and such broker-dealer is acting as an underwriter, we will be required to file a post-effective amendment to the Registration Statement of which this Prospectus is a part. We will be required to identify the broker-dealer, provide the required information on the plan of distribution, revise the disclosures in the Registration Statement, and file the agreement as an exhibit to the Registration Statement.  We and any Agents, which we might hire, will indemnify each other against certain liabilities, including liabilities under the Securities

- 13 -

Act of 1933. Any broker, dealer or sales agent that participates in the distribution of shares may be deemed to be an underwriter, and any profits on the sale of the shares by any such broker, dealer or sales agent and any commissions and fees received by any such broker, dealer or sales agents may be deemed to be underwriting compensation under the SecuritiesSecu rities Act.

We will end the offering when we have sold all of the offered common stock, but no later than January 5, 2007.July X, 2008.

 The shares may not be offered or sold in certain jurisdictions unless they are registered or otherwise comply with the applicable securities laws of such jurisdictions by exemption, qualification or otherwise. We intend to sell the shares only in the states in which this offering has been qualified or an exemption from the registration requirements is available, and purchases of shares may be made only in those states. We will not qualify our offering in any states but Washington and Oregon. Intended Offerees will be friends, family, and business associates of our Management. Oregon requires thatshares may be offered and sold only through licensed broker-dealers or salespersons.  Washington excepts licensed issuer sales persons from registration requirements.  As of July    , we also filed an offering document with the Toronto Stock Exchange to allows to conduct an offering in accordance with Canadian law. If we believe we cannot sell the offering by ourselves, we may engage registered broker-dealers. If such registered or licensed brokers or dealers are engaged, the total commission and fees paid to such brokers and dealers in connection with the sale of shares will not exceed 10% of the selling price of the shares.  To comply with the securities laws of certain jurisdictions, as applicable, the shares may be required to be offered and sold only through registered or licensed brokers or dealers.

In connection with their selling efforts in the offering, our officers and directors will not register as broker-dealers pursuant to Section 15 of the Securities Exchange Act of 1934, but rather will rely upon the "safe harbor" provisions of Rule 3a4-1 under the Exchange Act. Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer's securities. The conditions to obtaining this exemption include the following:

• None of the selling persons are subject to a statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act, at the time of participation;

• None of the selling persons are compensated in connection with his or her participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities;

• None of the selling persons are, at the time of participation, an associated person of a broker or dealer, and

• All of the selling persons meet the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that they (A) primarily perform or are intending primarily to perform at the end of the offering, substantial duties for or on behalf of the issuer otherwise than in connection with transactions in securities, and (B) are not a broker or dealer, or an associated person of a broker or dealer, within the preceding 12 months, and (C) do not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on this rule.

In addition, in connection with this offering, licensed broker-dealers who are hired may engage in passive market making transactions in our common stock on Nasdaq immediately prior to the commencement of the offering in accordance with Regulation M. Passive market making presently consists of displaying bids on Nasdaq limited by the bid prices of market makers not connected with such offering and purchases limited by such prices and effected in response to order flow. Net purchases by a passive market maker on each day are limited in amount to 30% of the passive market maker's average daily trading volume in our common stock during the period of the two full consecutive calendar months prior to the determination of the offering price in connection with a sale pursuant to this prospectus and must be discontinued when such limit is reached. Passive market making may stabilize the market price of our common stock at a level above that which might otherwise prevail and, if co mmenced, may be discontinued at any time.  Passive market making may cause the price of the common stock to be higher than the price that otherwise would exist in the open market in the absence of those transactions. If a licensed broker-dealer commences passive market making transactions, the broker-dealer may discontinue them at any time.

 We have not established a minimum amount of proceeds that we must receive in the offering before any proceeds may be accepted. We cannot assure you that all or any of the shares offered under this prospectus will be sold. No one has committed to purchase any of the shares offered. We reserve the right to withdraw, cancel or modify this offer and to accept or reject any subscription in whole or in part, for any reason or for no reason. Subscriptions will be accepted or rejected promptly. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Any accepted subscriptions will be made on a rolling basis. Once accepted, the funds will be deposited into an account maintained by us and considered our general assets. Subscription funds will not be placed into escrow, trust or any other similar arrangement. There are no investor protections for the return of

- 14 -

subscription funds once accepted. Certificates for shares purchased will be issued and distributed by our transfer agent within 10 business days after a subscription is accepted and "good funds" are received in our account. Certificates will be sent to the address supplied in the investor subscription agreement by certified mail. Subscribers will not be considered shareholders until they are issued stock certificates.

 Our officers, directors, existing stockholders and affiliates may purchase shares in this offering and there is no limit to the number of shares they may purchase. As of the date of this Prospectus, no offers to buy stock were made to our officers, directors, existing stockholders and/or affiliates prior to the filing of the Registration Statement of which this Prospectus is a part. Any offers to buy stock   to those individuals will be made only through a Prospectus; and no funds have been committed or paid by officers, directors, existing stockholders or affiliates prior to the effectiveness of this Prospectus.

An agreement to purchase the Common Shares offered hereby (the “Subscription Agreement”) accompanies this Prospectus.  Subject to availability and our right to reject subscriptions, in whole or in part, for any reason, Common Shares may be subscribed for by completing, executing and returning the Subscription Agreement, together with payment for all shares subscribed for, to Jewett-Cameron Trading Company Ltd., P.O. Box 1010, North Plains, Oregon 97133.  Our acceptance of a subscription shall be evidenced solely by the delivery to the subscriber of a written confirmation of sale.  Our receipt of a Subscription Agreement and/or deposit by the Company of payment for the subscribed shares as described below shall constitute acceptance of a subscription.  

Warranties by Subscribers

By signing the Subscription Agreement each investor is representing and warranting to us that he or she has indicated his or her true state of legal residence.

We will reject subscription agreements received, if any, from residents of these states where we are not authorized to sell the Common Shares.  The warranty given by each subscriber indicating the subscriber’s true state of legal residence will assist us in complying with state securities laws.  We might assert our rights under this warranty if a misrepresentation by a subscriber results in us selling shares of stock in a state in which we are not permitted to sell such shares. A subscriber does not waive any rights under the federal securities laws by executing the Subscription Agreement.

Termination of Offering

We can terminate this Offering at any time prior to the sale of all 500,000 Common Shares offered hereby.

DESCRIPTION OF SECURITIES

Our common stock is issued in registered form.  Computershare Investor Services, Inc. (located in Vancouver, British Columbia, Canada) is our registrar and transfer agent.

We completed a three for two stock split on February 26, 2003.  All references in this document to per share prices and the number of shares refer to post-split data unless otherwise indicated.

Our common shares trade on the NASDAQ Small Capital stock exchange in the United States. Our stock trades under the symbol "JCTCF" and CUSIP# 47733C-20-7.  Our common stock began trading on NASDAQ in April 1996.

Our common shares also trade on the Toronto Stock Exchange that is located in Toronto, Ontario, Canada, under the trading symbol "JCT".  Our common stock started trading on the Toronto Stock Exchange in February 1994.

There are no restrictions that limit our ability to pay dividends on our common stock.  We have not declared any dividends since incorporation and we do not anticipate that we will do so in the foreseeable future.  Our present policy is to retain future earnings for use in the operations and expansion of our business.

If dividends were to be paid, Canadian law states that in the case of dividends paid to residents not of Canada, the Canadian tax is withheld, which means only the net amount to the shareholder is paid.  Article X of the Tax Convention provides that the rate of tax on dividends paid to residents of the United States is generally limited to 15% of the gross dividend (or 10% in the case of certain

- 15 -

corporate shareholders owning at least 10% of the Registrant’s voting shares).  In the absence of the treaty provisions, the rate of Canadian withholding tax imposed on non-residents is 25% of the gross dividend.  Stock dividends received by non-residents from the Registrant are taxable by Canada as ordinary dividends.

Upon the completion of this offering, our authorized capital stock will not change. Our outstanding shares will increase to 1,965,5852,032,359 shares of common stock outstanding. Prior to this offering, we had 1,465,8581,532,359 shares of common stock outstanding held by 3017 registered shareholders.

Our authorized capital consists of 20,000,000 shares of common stock, no par value per share, and 10,000,000 shares of preferred stock, no par value per share, all of which shares of preferred stock are undesignated. We had no shares of preferred stock outstanding.

COMMON STOCK

Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our boardBoard of directors,Directors, subject to any preferential dividend rights of outstanding preferred stock. Upon our liquidation, dissolution or winding up, the holders of common stock are entitled to receive proportionately our net assets available after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of common stock have no preemptive, subscription, redemption or conversion rights. Our outstanding shares of common stock are and the shares offered by us in this offering will be, wh en issuedwhen iss ued and paid for, fully paid and nonassessable. The rights, preferences and privileges of holders of common stock are subject to and may be adversely affected by, the rights of the holders of shares of any series of preferred stock, which we may designate, and issue in the future.

PREFERRED STOCK

The board of directors has the authority, without action by the stockholders, to designate and issue preferred stock and to designate the rights, preferences and privileges of each series of preferred stock, which may be greater than the rights attached to the common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of common stock until the board of directors determines the specific rights attached to that preferred stock. The effects of issuing preferred stock could include one or more of the following:

There are currently no shares of preferred stock outstanding.

There are currently no warrants outstanding.

OPTIONS

We can grant stock options to our directors and employees.

Under the rulespolicies of the Ontario Securities CommissionToronto Stock Exchange we can grant stock options for up to 10% of the number of shares that are outstanding at the time. We cannot; however, give any one person more stock options than 5% of the shares outstanding. The stock option price must be equal to the fair market value of the stock on the day we grant the options. (This value is subject to a 10% discount, which is mandated by the Ontario Securities Commission.)  

Currently there are no shares reserved for issuance pursuant to outstanding warrants, rights or convertible securities.  We have 52,500 share purchase options outstanding.

- 16 -

ANTI-TAKEOVER PROVISIONS

Some provisions of our certificateArticles of incorporation and bylawsIncorporation may be deemed to have an anti-takeover effect and may delay or prevent a tender offer or takeover attempt that a stockholder might consider in one’s best interest, including those attempts that might result in a premium over the market price for the shares held by stockholders.

The terms of certain provisions of our certificateArticles of incorporation and bylawsIncorporation may have the effect of discouraging a change in control. Such provisions include the requirement that all stockholder action must be effected at a duly-called annual meeting or special meeting of the stockholders and the requirement that stockholders follow an advance notification procedure for stockholder business to be considered at any annual meeting of the stockholders.

 Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our bylaws provideThe Business Corporation Act of British Columbia (the “BCBCA”) provides that stockholders seeking to bring business before an annual meeting of stockholders, or to nominate candidates for election as directors at an annual meeting of stockholders must provide timely notice in writing. To be timely, a stockholder’s notice must be delivered to or mailed and received at our principal executive offices not less than 3 months 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders. However, in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be received not later than the closeOur Articles of business on the 10th day following the date on which notice of the date of the annual meeting was mailed to stockholders or made public, whichever first occurs. Our bylawsIncorporation also specifyspecifies requirements as to the form and content of a stockholder’s notice. These provisions may preclude, delay or discourage stockholders from bringing matters before an annual meeting of stockholders or from making nominations for directors at an annual meeting of stockholders.

Stockholder Action; Special Meeting of Stockholders

Our certificate of incorporation eliminates the ability of stockholders to act by written consent. It further provides that special meetings of our stockholders may be called only by our Chairman of the Board, Chief Executive Officer, President, a majority of our directors or committee of the board of directors specifically designated to call special meetings of stockholders. These provisions may limit the ability of stockholders to remove current management or approve transactions that stockholders may deem to be in their best interests and, therefore, could adversely affect the price of our common stock.

Authorized but Unissued Shares

Our authorized but unissued shares of common stock and preferred stock will be available for future issuance without stockholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to effect a change in our control or change in our management by means of a proxy contest, tender offer, merger or otherwise.

Charter Amendments

British Columbia law provides generally that the affirmative vote of a majority2/3’s of the shares entitled to vote on any matter is required to amend a corporation’s certificateNotice of incorporationArticles or bylaws,Articles of Incorporation or unless either a corporation’s certificateArticles of incorporation or bylawsIncorporation require a greater percentage.

OUR BUSINESS

General Development of Business

We were incorporated in British Columbia, Canada, on July 8, 1987, as a holding company for Jewett-Cameron Lumber Corporation (“JCLC”).  We acquired all of the shares of JCLC through a stock-for-stock exchange and on July 13, 1987 Jewett-Cameron Lumber Corporation became a wholly owned subsidiary of ours.

Jewett-Cameron Lumber Corporation was incorporated in the state of Oregon, USA, in September 1953.  During the next 31 years it developed a good reputation as a small lumber wholesaler based in Portland, Oregon.  In September 1984, the original stockholders sold their interest in the corporation to a new group of investors.  Two of these investors, Donald Boone and Michael Nasser, are now associated with our company.  Donald Boone is our President and Treasurer and Michael Nasser is our Secretary.

- 17 -

Jewett-Cameron Lumber Corporation purchased another company, Material Supply International ("Material Supply") in early 1986.  MSI-PRO CO., incorporated in April 1996, is a successor to that company. It is a wholly owned subsidiary of Jewett-Cameron Lumber Corporation and imports and distributes pneumatic air tools and industrial clamps under the name “MSI-PRO CO”.  

Our wholly owned subsidiary, Jewett-Cameron South Pacific Ltd. ("JCSP") was incorporated in the Kingdom of Tonga in July 1990.  We closed our operations in Tonga in 2001. Our business in Tonga consisted of sales of building materials.  Jewett-Cameron South Pacific Ltd. was shut down in 2001 and the corporation was dissolved at that time.

A secondthird wholly owned subsidiary of Jewett Cameron Lumber Corporation is Jewett-Cameron Seed Company (“JCSC”), incorporated in Oregon, USA in October 2000. We formed Jewett-Cameron Seed Company after we acquired certain assets of another company called AgriBioTech Inc. for $1.5 million. The assets that we acquired are located at 31345 N.W. Beach Road in Hillsboro, Oregon. The assets that we purchased were thirteen plus acres of land; 105,000 square feet of buildings; rolling stock; and, equipment.  We use this facility for seed and grain processing, storage and brokerage.  We now operate this business as a seed and grain processing, storage and brokerage business.

Our thirdfourth wholly owned subsidiary, Greenwood Products, Inc. was incorporated in Oregon, USA in February 2002. We formed this company after Jewett Cameron Lumber Corporation acquired some of the assets of Greenwood Forest Products, Inc. of Portland, Oregon.  We paid $260,000 for certain assets of Greenwood. These assets consisted of office equipment and furniture. This business involves the processing and distribution of industrial wood and other specialty building products, principally to original equipment manufacturers, primarily in the transportation and recreational boating industries in the United States.  Approximately half of GPI’s sales are attributable to the recreational boating industry and are generally stronger during the winterSpring and Summer months.  The value-added-nature of our wood components are that they will resist rust, rot and flame.  They also reduce sound and have a high degree of structural strength per pound.

Financial Information About Business Segments

The table below summarizes certain financial information about our subsidiaries for the past three years.

Narrative Description of Business

The following is a description of our business.

Industrial Wood Products

Greenwood Products Inc.

Our subsidiary Greenwood Products Inc operates out of their facilities in Tigard, Oregon. This portion of our business involves the processing and distribution of industrial wood and other specialty building products, principally to original equipment manufacturers, primarily in the transportation and recreational boating industries in the United States.  Approximately half of GPI’s sales are attributable to the recreational boating industry and are generally stronger during the springSpring and summerSummer months.  The value -added-nature of our wood components are engineered to proprietary specifications and tolerancestolerances. Products include cheese boxes, kiln sticks, diving boards blanks, scaffolding, laminated veneer lumber and specialty panels..panels. Users would be manufacturers of boats, buses, and subway cars. Specific products include marine panels, yacht grade cherry lumber, dB-Ply Marine plywood panels, laminated veneer lumber, one-piece LVL Stingers, XL Industrial Pane ls, Select Boat Panel, and Panelam Panel.

During Fiscal 2005/2004/2003, sales of Greenwood Products, Inc. to original equipment manufacturers represented about 34%, 35% and 29% respectively of our total revenue; with transportation and recreational boating industry sales representing 41% in 2005, 39% in 2004, and 51% in 2003 respectively.  GPI’s sales increased to $55.4 million in 2005 from $52.7 million in 2004; and $52.7 million in 2004 from $44.2 million in 2003. 

Below is a list of GPI’s major customers from whom we derive 10% or more of our revenues from Greenwood Products, Inc. and the percentage of total sales from each one of them.

We sell industrial panel products to U.S. Marine.

GPI has no backlog of orders.

GPI has no patents, trademarks, licenses, or concessions.

The competitive environmentA balance of price and quality is the basis of competition for Greenwood Products has no unique features.Products.

Lumber and Building Materials

Jewett-Cameron Lumber Corporation

Our subsidiary JCLC operates out of facilities located in North Plains, Oregon. Through Jewett-Cameron Lumber Corporation we compete in the following business segments: warehouse distribution and direct sales of building materials to home improvement centers which are located primarily in the Pacific and Rocky Mountain regionsregion of the United States; the export of finished building materials to export customers who are located primarily in Central and South America; and, we sell specialty wood products for both government and industrial sale. This area of our business is done primarily on a contract-bid basis. This means that we only sell products after we have been told that our bids for these products were accepted and we are given a contract, which states that our customers will purchase the products from us.

- 19 -

During Fiscal 2005/2004/2003, sales by Jewett-Cameron Lumber Corporation to home improvement centers represented about 18%13%, 18%13% and 13%11%, respectively of our total revenue; with export, industrial tools and seed processing and sales representing 8%, 8% and 7% respectively.  

Through JCLC we sell products to the home improvement industry. This is an industry that, in the past, has not been subject to major business cycles; however, the current economic downturn has been detrimental for this market and we have experienced a decrease in the sale of these products.cycles.  Traditionally, the new home construction portion of the lumber industry is highly sensitive to the US economy and interest rates and this industry usually suffers during periods of economic decline and high interest rates because of the reduction in housing starts.  Through JCLC we have concentrated on building a customer base in the residential repair and remodeling segment of the industry because we believe that this is a growing market that is fueled by professional remodelers and do-it-yourself homeowners.  We believe that this market is less sensitive to downturns in the U.S. economy than is the market for new home construction.

The products that we sell through JCLC are not unique and with few exceptions are available from multiple suppliers; however, the service which we provide is unique in that it includes bar coding of all products; shrink wrapping of all individual orders; and, just in time delivery to most customers.

Our current products in this area are:

Garden Timbers – Treated, untreated or stained including cherry tone garden ties, bender board, stakes and lath.

Gates

Dimension lumber.

Kennels

Greenhouses

Portable storage buildings

Metal Fencing

Non-wood items which we sell through Jewett-Cameron Lumber Company include kennels, greenhouses, portable storage buildings, metal gates and metal fencing.  These items are sold in the home improvement departments of our customers.

Our distribution center and headquarters office facility in North Plains, Oregon was completed in November 1995.  This complex includes 40,000 square feet under roof of warehouse, office, and manufacturing space on five paved acres. This facility gives us the ability to provide a broad range of products and services to our customer base which is located between Northern California and Alaska.

We have no patents, trademarks, licenses, franchises, or concessions relating to any of our products and as a result they are not factors in our business.

Historically, we have received commitments from a number of large home improvement chains in the late fall/early winter to supply products to them at a fixed price for a specified period of time; i.e., for three months of firm pricing once the season begins. We see no reason for this situation to change in the future.

The following customers, who purchase from Jewett-Cameron Lumber Company,There are no customers from whom we derive 10% or more of our revenues.

 (Revenues of Jewett-Cameron Lumber Company.)

The home improvement business is seasonal, with most of our sales in this industry occurring between February and August.  As mentioned earlier, historically we have negotiated an agreement with each of our major home center customers in the fall of the year for the coming home improvement season.  Our deliveries for the new season to these customers normally begin in late February.

- 20 -

We begin buying inventory for the next home improvement season in late fall each year.  Consequently, an inventory buildup occurs until the heavy selling by us begins in February.  Our inventories continue to remain high for a few months and then gradually decline to seasonal low levels at the end of the summer.

Backlog orders are not a factor in our business.  We only process orders on an as-needed basis.

No material portions of our business are subject to renegotiation of profits or termination of contracts or subcontracts at the election of the government.

During the spring of 1993, we acquired a manufacturing plant to produce several lines of products for home improvement center customers.  The plant was moved to a larger facility in Portland in August 1993, and subsequently was moved to an existing building at our North Plains facility in March 1995.  At this plant we manufacture diving board blanks and scaffold planking..planking.

The competitive environment of Jewett Cameron Lumber has no unique features.is a balance between price and availability.

Seed Processing and& Sales

Jewett-Cameron Seed Company (“JCSC”),

JCSC bringsbuys unmarketable seeds from customers and processes itthem so that it becomesthey become marketable. Processing means removing imperfect, lightweight, hollow seeds which cannot germinate normally, as well as removing field impurities, weeds, and noxious weed seed. JCSC also bags, palletizes, shrink wraps, stores and subsequently ships the product. JCSC performs the foregoing services for growers and/or for themselves in the case where JSCS buys the "raw product".

Theproduct”.The competitive environment of Jewett-Cameron Seed Company has no unique features.is geographic proximity to the growers.

Industrial Tools/ClampsTools

MSI-PRO CO.

MSI-PRO CO. operates from the same facilities as JCLC. Through MSI-PRO CO. we import and distribute both pneumatic air tools and industrial clamps.  We sell these products throughout the United States and Canada to distributors and original equipment manufacturer customers.  These sales are made through a network of agents and representatives, each of whom is an independent contractor representing between 10-to-15 other manufacturers who sell to similar customers but are not selling competing lines.  Through MSI-PRO CO. we have agents and representatives that cover major industry groupings including industrial suppliers, automotive suppliers, and woodworking suppliers.

The pneumatic air tools, manufactured and sold under the name MSI-PRO CO., are of a light industrial application and are moderately priced.  MSI-PRO CO. exclusively markets the MSI-PRO CO. line.

The industrial clamps are somewhat newer to us.  The line is high quality and moderately priced and covers a wide variety of potential customers.

The products that we sell through MSI-PRO CO. have been manufactured for us by several suppliers in Taiwan and South Korea.  More than one supplier is able to manufacture all of our products.

Sales of pneumatic air tools and industrial clamps are not seasonal.

MSI-PRO CO. is a registered trademark in the United States and Canada.  We do not have any other patents, licenses, franchises, or concessions.  

The market for pneumatic air tools is very competitive.  In this industry we face competition from better financed companies with more sophisticated sales forces and more sophisticated distribution networks. The U.S. market for pneumatic air tools is currently approximately $1 billion in annual sales, of which 60% are manufactured in the United States and 40% are imported.  The best known US manufactured lines are Chicago Pneumatic and Ingersoll-Rand, which rank #1 and #2 in overall size in the industry.  A smaller line, Sioux, is also manufactured in the United States.  The two largest imported lines today are Florida Pneumatic and Astro Tools.  

- 21 -

Others include Sunnex, Ames, and Eagle.  Our sales in this industry represent a very small fraction of the market.  Our current market strategy that allows us to compete in the pneumatic air tool and industrial clamp markets includes brand name and company recognition, moderate to low price, and continued development of a manufacturer representative organization which covers all of the major users of the tools.

The U.S. sales volume in industrial clamps is approximately US$400 million annually.  There are fewer competitive lines available and we expect to gain a larger share of the market in industrial clamps than in pneumatic air tools. There are no unique features pertaining to the industrial clamp market.

There are no customers that purchase 10% or more of our products in any one year.  Our backlog orders are not a major factor. No portion of our business is subject to renegotiation of profits or termination of contracts or subcontracts at the election of the government.

LEGAL PROCEEDINGS

One of our subsidiaries is a plaintiff in a lawsuit filed in Portland, Oregon, entitled,Greenwood Products, Inc. et al v. Greenwood Forest Products, Inc., et al., Cause No. 05-03-02553 (Multnomah County Circuit Court).  The litigation involves a purchase agreement to acquire inventory from Greenwood Forest Products IncInc. (“GFP”).  Specifically, the balance on a promissory note is contested as a mutual mistake following the misrepresentation of an in-house accounting staff member of Greenwood Forest Products, Inc. The amount in dispute is approximately $800,000. We are vigorously pursuing the matter and believe we will ultimately succeed on the merits. The obligor is Greenwood Products, Inc. a subsidiary of Jewett Cameron Trading Company Ltd. If an obligation exists it is to Greenwood Forest Products, Inc.

The Company does not know of any other material, active or pending legal proceedings against them; nor is the Company involved as a plaintiff in any other material proceeding or pending litigation.  The Company knows of no other active or pending proceedings against anyone that might materially adversely affect an interest of the Company.

MARKET INFORMATION

Our common stock is issued in registered form.  Computershare Investor Services, Inc. (located in Vancouver, British Columbia, Canada) is the registrar and transfer agent for our common stock.

On JanuaryMay 31, 2006, the shareholders’ list for our common shares showed 5017 registered shareholders and 1,465,8581,532,359 shares outstanding, including 2212 registered holders in the United States holding 1,455,9101,522,209 shares.

Our common shares trade on the NASDAQ Small Capital stock exchange in the United States. The trading symbol on NASDAQ for our common stock is “JCTCF” and the cusip number for our common stock is 47733C-20-7.  Our common stock began trading on NASDAQ in April 1996.

The following table sets forth, in U.S. dollars and in dollars and cents (in lieu of fractions), the high and low sales prices for each of the calendar quarters indicated, on the NASDAQ Small Capital stock exchange of our common shares for the last eight fiscal quarters.   The price was $12.48$12.03 on JanuaryMay 31, 2006.

Our common shares also trade on the Toronto Stock Exchange in Toronto, Ontario, Canada, under the trading symbol "JCT".  Our common stock began trading on the Toronto Stock Exchange in February 1994.

The following table sets forth the volume of trading and high, low and closing sales prices on the Toronto Stock Exchange for the Company's common shares for: the last five fiscal years, the last eight fiscal quarters, and the last six months.  Prices are adjusted for a three-for-two stock split which was reflected in trading effective 2/27/2003.

There are no restrictions that limit our ability to pay dividends on our common stock.  We have not declared any dividends since incorporation and do not anticipate declaring any dividends in the foreseeable future because our present policy is to retain future earnings for use in our operations and the expansion of our business.

- 23 -

If dividends were to be paid, Canadian law states that in the case of dividends paid to residents not of Canada, the Canadian tax is withheld by us, which remits only the net amount to the shareholder.  By virtue of Article X of the Tax Convention, the rate of tax on dividends paid to residents of the United States is generally limited to 15% of the gross dividend (or 10% in the case of certain corporate shareholders owning at least 10% of the our voting shares).  In the absence of the treaty provisions, the rate of Canadian withholding tax imposed on non-residents is 25% of the gross dividend.  Stock dividends received by non-residents from us are taxable by Canada as ordinary dividends.

SELECTED FINANCIAL DATA

The selected financial data in the following table is for Fiscal 2005/2004/2003/2002/2001 ended August 31st and it was derived from the financial statements of our Company which were audited by Davidson & Company, independentIndependent Chartered Accountants, as indicated in their report which is included elsewhere in this document.  The selected financial data for Fiscal 2002/2001 was derived from audited financial statements of our Company, not included herein. The selected financial data presented as basic average shares and diluted average shares is a weighted amount.

The selected financial data was extracted from the more detailed financial statements and related notes included herein and should be read in conjunction with such financial statements and with the information appearing under the heading, "Management's Discussion and Analysis of Financial Condition and Results of Operations".

Annual Selected Financial Data

(Share data adjusted for 3:2 stock split which occurred during Fiscal 2003)

(Dollars in 000, except per share data)

Quarterly Selected Financial Data

(Share data adjusted for 3:2 stock split which occurred during Fiscal 2003)

(Dollars in 000, except per share data)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion relates to our financial condition, changes in financial condition and results of operations for the fiscal years ended 8/31/2005, 8/31/2004, and 8/31/2003 and for the interim periods ended 11/30/20055/31/06 and 11/30/2004. This2005.This discussion should be read in conjunction with our financial statements, which are prepared in accordance with U.S. GAAP.

Our operations are classified into four principle industry segments: the sale of lumber and building materials to home improvement centers in the United States; the processing and sale of industrial products to original equipment manufacturers in the United States; the sale of pneumatic air tools and industrial clamps in the United States; and, the processing and sale of agricultural seeds in the United States. Sales of building materials have traditionally consisted of wholesale sales of lumber and building materials in the United States. This has transitioned to include both wood and non-wood items.  Sales in this category are attributable to Jewett Cameron Lumber Corporation, a wholly owned subsidiary of ours and consist primarily of home improvement products (sold thruthrough JCLC) such as fencing materials, dimension lumber, green houses, dog kennels, outdoor umbrellas, etc. These sales occur year-round; however, they are greater in the spring and summer months. Sales a ndSale s and processing of industrial products to original equipment manufacturers consist of wholesale sales of products primarily to the transportation and recreational boating industries in the United States. Sales in this category are attributable to Greenwood Products, Inc., a wholly owned subsidiary of Jewett Cameron Lumber Corporation. Approximately 50%A significant portion of Greenwood Product’s sales are attributable to the recreational boating industry and are generally stronger during the spring and summer months. Sales of pneumatic air tools and industrial clamps consist of the distribution of pneumatic air tools and industrial clamps in the United States. Sales in this category are attributable to MSI-PRO Co., a wholly owned subsidiary of Jewett Cameron Lumber Corporation.   The processing and sale of agricultural seeds consists of the distribution of processed agricultural seeds and grain in the United States. Sales in this category are attributable to Jewett Cameron Seed Company, a wholly owned subsidiarysubsidi ary of Jewett Cameron Lumber Corporation. Harvest months in the Northwest are June through September, and, consequently, a greater portion of the revenues attributable to Jewett Cameron Seed Company occurs during this time of year. Our major distribution center is located in North Plains, Oregon.

Internal Controls Over Financial Reporting

In connection with the audit of our consolidated financial statements for the fiscal year ended August 31, 2005, our independent auditors did not identify any material weaknesses in our internal controls over financial reporting.  As a result, we did not receive an adverse attestation from our independent auditors regarding Sarbanes-Oxley Section 404 compliance.

Summary of Contractual Obligations

The terms of the credit linenotes payable with U.S. Bank are disclosed in “Use of Proceeds”.

Results of Operations.

The ThreeNine Months Ended November 30, 2005May 31, 2006 versus the ThreeNine Months Ended November 30, 2004May 31, 2005

For the threefirst nine months of the current fiscal year, ended November 30, 2005, ourMay 31, 2006, sales increased slightly to $18,224,957 compared to $18,140,490 for the three months ended November 30, 2004.

Sales of our home improvement products were $3,147,751 for the three months ended November 30, 2005,totaled $57,730,796, an increase of slightly over 47% compared$1,061,569, or 1.8%, from sales during the same period in the prior fiscal year of $56,669,227. The increase in sales was due to higher sales in the lumber and building material segment and the seed processing and sales segments.  This is partially offset by lower results in industrial wood products and industrial tools.

Lumber and building material sales rose 41.6% to $14,261,103 from $10,070,112. The higher sales were due to the new products introduced within the last several years as the Company shifted away from lower margin commodity products to higher margin specialty products. Seed processing and sales rose to $4,296,768 from $3,644,011, an increase of $2,136,30417.9%. The higher sales were due to a favorable pricing environment as well as a good harvest during the growing season.

Industrial wood products sales fell to $38,480,180 from $42,111,051 recorded in the first nine months of the prior fiscal year, a decline of 8.6%. The primary reason for the three months ended November 30, 2004. Our management attributes this increasedecline was lower prices on certain of the Company’s products due to market acceptance of our new product lines of garden and peta very competitive pricing environment led by a competitor. In response, the Company is working to source lower cost alternatives for these products as well as continuing to diversify within the segment by adding higher margin products.

- 25 -

Revenues from the sales and processing Sales of industrial tools fell to $692,745 from $844,053, a decline of 17.9%, as the Company is currently shifting its sales model in this segment away from higher volume/lower margin products were $13,386,094 for the three months ended November 30, 2005; a decrease of 6% compared to revenues of $14,224,857 for the three months ended November 30, 2004. In spite of the decrease in our gross sales, our profitability increased approximately 30%. This occurred because we reduced our inventory levels to curb costs and we concentrated on higher margin transactions rather than volume.

Sales of pneumatic tools and industrial clamps were $215,487 for the three months ended November 30, 2005 compared to $271,736 for the three months ended November 30, 2004, a decrease of 21%. In spite of the 21% decrease in sales, income from operations only decreased by $6,448.  Again, this is evidence of our decision to concentrate on higher margin transactions rather than volume.

Sales of processed seeds and grain were $1,475,625 for the three months ended November 30, 2005 compared to $1,507,593 for the three months ended November 30, 2004, a decrease of slightly over 2%.  The decrease in sales, which occurred in the three-month period ended November 30, 2005 as compared to the three-month period ended November 30, 2004, was due primarily because some of our November billings were not sent out until December.specialty products.

Cost of sales accounted for 85% of sales for the three-month period ended November 30, 2005first nine months compared to 87%86% for the three-month period ended November 30, 2004,first nine months of the prior fiscal year, a decrease of 2%1%. The decreasedecline was primarily attributable to the continued marketing and sales emphasis on higher margins formargin products sold through Jewett Cameron Lumber Corporation andin several of the slightly lower cost of raw materials associated with the products sold through Greenwood.Company’s business segments.        

Operating expenses accounted for 11%10.7% of sales for both the first quarter of Fiscal 2006 andnine months compared to 11.3% for the first quarternine months of Fiscal 2005.  

Income tax expensethe last fiscal year. Lower wages and employee benefits due to employee reorganization expenses recorded in the prior year’s period were offset by higher general and administrative expenses in the current nine month period. These higher expenses were related to organizational and marketing support for the three months ended November 30, 2005 was $324,000 as comparedCompany’s new products within the industrial wood products and lumber and building supply segments. Overall operating expenses are anticipated to $110,000remain at a similar level for the three months ended November 30, 2004. We estimate income tax expense forremainder of the quarter based on combined federal and state rates that are currently in effect.  The increase in income tax expense was due to the significantly higher profitability which we realized.current fiscal year.

OurThe net income for the three-month periodnine months ended November 30, 2005May 31, 2006 was $550,391, which represents an increase of $382,556 as$1,728,619, or $1.09 per diluted share, compared to $615,556, or $0.40 per diluted share, in the prior year’s period. The 181% increase was due to improved profit margins on sales in both industrial wood products and lumber and building material segments, as well as a one-time gain of $599,825 from the sale of the Company’s Ogden, Utah distribution center. The net income was also higher due to lower interest expense of $167,835 for($167,493) compared to ($364,765) as the three-month period ended November 30, 2004.  This 224% increase resultedCompany paid down its bank indebtedness during the current period. Due to the higher income from the sales of higher margin products as described above.

The basic earnings per share for the three-month period ended November 30, 2005 was $0.36operations and the diluted earnings per share forgain on the same period was $0.35. This compares to both basic and diluted earnings per share forsale of property, the threeCompany had a higher income tax expense of ($1,035,000) in the current nine month period ended November 30, 2004 of $0.11.compared to ($347,000) in the prior year’s period.

Fiscal 2005 Ended August 31, 2005 versus Fiscal 2004

Sales increased 5% to $74.6 million during Fiscal 2005 as compared to $71.3 million in Fiscal 2004.  The majority of the increase in our sales was attributable to Greenwood Products. Sales of industrial wood products by Greenwood increased $2.7 million. This was due to an enlarged customer base and fluctuations in the price of raw materials that were passed on to our customers. We are able to pass on the fluctuations in the price of raw materials to our customers because of their awareness of price fluctuations in the basic component material of the products.

Sales of building materials and components of the home improvement business by Jewett Cameron Lumber increased $564 thousand. The increased sales of lumber and building materials resulted from the introduction of new products, which occurred two years ago. These products include dog kennels, greenhouses and outdoor patio accessories. The market awareness of these products has increased since their introduction, because of the increased use of manufacturer’s representatives, which resulted in a greater number of sales personnel covering the market. The number of our sales personnel increased by six.

Gross profit for Fiscal 2005 increased 13% to $9.29 million as compared to $8.24 million for the fiscal year ended August 31, 2004. The gross margins increased because we have been able to charge our wholesale customers higher prices. (The introductory pricing utilized during the introduction of the newer products was increased during the past two years and accepted by the customers.)

Operating expenses increased by $742 thousand comparing Fiscal 2005 with Fiscal 2004.  Actual expenses were $7,763,220 in 2005 and $7,021,178$7,021,188 in 2004. Both general and administrative expenses and depreciation expense increased slightly. The more substantial increased occurred in the category of wages and employee benefits, which increased, by $418,443 thousand$693,975 comparing Fiscal 2005 with Fiscal 2004. The primary reasons for the increase in this category were medical insurance increases and additional performance bonuses.

- 26 -

Operating Expense

Because of reduced inventory levels, financing and interest expense decreased by $46 thousand comparing Fiscal 2005 with Fiscal 2004. Inventory levels, financing and interest expense all relate to inventory acquisition cost. High inventory levels have two major cost components. The first cost component is off-site storage and transportation expenses. The second is the cost of borrowed funds to support the higher levels of inventory.

Net Income increased to $931,088 in Fiscal 2005 from $567,140 in Fiscal 2004.  Basic Earnings Per Share were $0.63 for Fiscal 2005 compared to $0.39 for the prior fiscal year; Diluted Earnings Per Share were $0.60 in Fiscal 2005 compared to $0.37 for the prior fiscal year.

Industrial Wood Products (Greenwood Products Inc.)

This division’s sales increased 5% to $55.4 million in Fiscal 2005 (FY2004 = $52.7 million).  Revenue was again enhanced by strong sales to the boat building and transportation industries (bus, subway, specialized truck carriers, etc. The products sold to these customers consist of laminated wood panels, which are manufactured to meet the specified needs of this industry group. The laminated wood panels are used for such things as flooring and side panels in boats and flooring in busses and subway cars.  Before the end of the fiscal year, we broadened our supplier contacts.  We have a practice of providing short-term fixed-price supply agreements and fixed price sales agreements up to three months. Divisional profitability decreased by 3% for the Fiscal Year ended August 31, 2005 as compared to the Fiscal Year ended August 31, 2004.  This decrease occurred because of normal fluctuations in the price of raw materials and the use of introductory pric ing for new customers. Introductory pricing is at lower levels and results in lower margins.  Fluctuations in the cost of materials and transportation expense are ever present. Our customers’ resistance to upward pricing is also ever present. Oftentimes we are able to pass on the increased costs to our customers and at times we are not. Divisional profitability decreased in this area partially because we were not able to pass on all of our increased costs to customers during this time.

Lumber and Building Materials (Jewett-Cameron Lumber Company)

Our lumber and building material division’s sales rebounded again in Fiscal 2005 in response to new products introduced in mid-2003, reversing the declines in recent years.  Jewett-Cameron Lumber Company again recorded a loss in the amount of ($156,902) for the fiscal year ended August 31, 2005 as compared to a loss in the amount of ($581,070) for the fiscal year ended August 31, 2004. Losses within this division have occurred during the last three fiscal years because of the continued restructuring costs associated with the new product lines and new customer base. These costs include retraining personal in the areas of these new products, advertising and attendance at trade shows. These costs are included as expenses on the income statement. We believe that profitability within this division will begin to occur during fiscal 2006 when all the previous restructuring becomes finalized.  Profitability within this business unit has returned as of the first quar ter of Fiscal 2006 with earnings of $299,207.  We anticipate a continuation of this growth as the transition to new product lines has been accomplished.

- 27 -

We attribute the revenue improvement to the successful introduction of new “non-wood” products, including kennels, greenhouses, portable storage buildings, outdoor seating, metal gates and metal fencing.  Such products represented nearly three-fourths of sales, which is consistent with FY2004.  This broader product line continues to allow us to utilize our strong marketing contacts at the big-box home improvement retailers and to gain entry into a more diversified mix of retailers We manufacture these new products, through supply contracts in Asia. We do not own any manufacturing facilities in Asia.  Our presence in Asia consists of employees residing there and performing quality control, engineering and coordination at the manufacturing sites. All products are manufactured to our design and specifications and therefore are unique rather than generic. Once manufactured, we import these products and resell them in the United States.

Seed Processing and Sales (Jewett-Cameron Seed Company)

Sales attributable to Jewett-Cameron Seed Company were virtually the same during FY2005 as they were in FY2004.

The loss, which occurred during FY2005, was a result of increased electricity costs incurred in seed processing and lower margins.

Industrial Tools

Sales grew 8.3% to $1,083,180 and profits grew 34% to $120,238.  We attribute the increase in profitability to wholesale pricing differences, and corporate re-structuring. The wholesale pricing differences were primarily caused by the outsourcing of manufacturing to Asia. The corporate restructuring gave this unit an additional revenue stream by providing customer service for sales that took place through Jewett Cameron Lumber. This allows the purchase via credit card of accessories like ground anchors and shade coverings, extensions that are available on a post purchase basis.  The increase in profitability also resulted from the hiring of a new sales manager who, in turn, hired a new sales staff. We have accounted for the restructuring on an accrual basis.

Fiscal 2004, ended August 31^st vs. Fiscal 2003

Sales increased 29% to $71.4 million during Fiscal 2004 as compared to $55.4 million in Fiscal 2003.  The increase in sales was across the board, with particular strong growth at Greenwood Products Inc. and the turn-around of business at Jewett-Cameron Lumber Company.

Gross profit for Fiscal 2004 only increased 7% to $8,240,362, despite the 29% increase in sales because of a 32% increase in cost of goods sold.  Shifting product mix and higher costs led to the increased costs.  As a percent of revenue, cost of goods sold has risen consistently for the last four years: Fiscal 2004 = 88%; Fiscal 2003 = 86%, Fiscal 2002 84%, and Fiscal 2001 = 81%.

Operating expenses were substantially unchanged at $7.0 million in Fiscal 2004 and Fiscal 2003.  General/Administrative expenses increased 40% ($714,158)or $714,158 during Fiscal 2004; Depreciation/Amortization increased 6% ($19,810);or $19,810; and Wages/Employee Benefits decreased 14% ($681,741).

General and administrative expenses as a percent of revenue rose to 3.5% after several years of decline: Fiscal 2003 = 3.2%; Fiscal 2002 = 3.4%; and Fiscal 2001 = 5.1%.  Management attributes higher professional fees (accounting/legal/etc.) related to the Greenwood Products Inc. acquisition, the proposed stock offering, and corporate changes for the increase in G&A expenses.  Lower Wages/Employee Benefits are materially attributable to efforts at all divisions to control costs, with the shifting product mix at Jewett-Cameron Lumber Company resulting in less labor-intensive operations.

Interest expense increased 13% Fiscal 2004 to $391,246.  The primary reason for the increase was the higher level of borrowing resulting from the increased level of inventory required to support the elevated sales level of Fiscal 2004.

- 28 -

Net Income increased to $567,140 in Fiscal 2004 from $294,144 in Fiscal 2003.  Basic Earnings Per Share were $0.39 for Fiscal 2004 compared to $0.20 for last year; Diluted Earnings Per Share were $0.37 in Fiscal 2004 compared to $0.19 for last year.2003.

Industrial Wood Products (Greenwood Products Inc.)

This division’s sales increased 19% to $52.7 million in Fiscal 2004 (FY2003 = $44.2 million).  Revenue was enhanced by strong sales to the boat building and transportation industries (bus, subway, specialized truck carriers, etc.).  Before the end of the fiscal year 2004, the Company had broadened its supplier contacts.  The Company, once again, is able to obtain fixed-price supply agreements and fixed price sales agreements on a forward three-month basis; reversing this year’s2004’s situation mid-year when suppliers’ price increase were outside such agreements.  Also, reduced inventory costs resulted from the end of the purchasing of inventory pursuant to the acquisition agreement.  Divisional profitability more than doubled $1,668,685 for Fiscal 2004 (FY2003 = $730,781).  Divisional profitability was 32%3.2% of revenue (FY2003 = 17%1.7% and FY2002 = 24%2.4%).

Lumber and Building Materials (Jewett-Cameron Lumber Company)

This division’s sales rebounded in response to new products introduced in mid-2003, reversing the declines in recent years.  Divisional profitability was weak because restructuring costs associated with the manufacturing facility and the new product lines; turning into a “manufacturer” rather than a distributor.

Revenue:                   Divisional Income:

FY2004: $12.8 million              ($581,070)

FY2003: $ 7.1 million              ($124,928)

FY2002: $14.7 million               $427,496

Revenue:	Divisional Income
FY2004:    $12.8 million	($581,070)
FY2003:    $7.1 million	($124,928)
FY2002:    $14.7 million	$427,496

Management attributes the revenue improvement to the successful introduction of new “non-wood” products, including kennels, greenhouses, portable storage buildings, outdoor searing, metal gates and metal fencing.  Such products represented nearly three-fourths of sales, versus less than 10% in FY2002.  This broader product line allowed the Company to utilize its strong marketing contacts at the big-box home improvement retailers and to gain entry into a more diversified mix of retailers.  In recent years, in an attempt to strengthen their profitability, the big-box retailers (Lowe’s, Home Depot, Fred Meyer, etc.) have decreased inventory purchases from “middlemen” like the Company in favor of “manufacturers”, such as Georgia-Pacific and Weyerhaeuser.  The Company “manufacturers” these new products, through supply contracts in Asia, and is again a favored supplier to these potentially large customers, buoyed b y its strong customer service capabilities.

Seed Processing and Sales (Jewett-Cameron Seed Company)

Sales grew 50% this yearin Fiscal Year 2004 and profitability nearly doubled.  Management attributes this growth to successfully marketing efforts and a new price structure for product/services.

Revenue:                   Divisional Income:

FY2004: $4.8 million       $ 91,741

FY2003: $3.2 million       $ 46,114

FY2002: $2.6 million       $249,526

Seed inventory levels fell materially because a change from “holding” inventory for sale to collecting “storage fees” for future sale.

Industrial Tools

Sales grew 13% to $1,000,135 and profits fell 13% to $89,941.  Management attributes the decline in profitability to personnel changes and wholesale pricing differences, and corporate re-structuring.

Revenue:                   Divisional Income:

Fiscal 2003, ended August 31^st vs. Fiscal 2002

Sales increased 27% to $55,368,587 during Fiscal 2003 as compared to Fiscal 2002 when sales were $43,625,125. (Sales for Fiscal 2001 were $22,112,954.) The twenty seven percent increase in sales during Fiscal 2003 as compared to Fiscal 2002 was due primarily

- 29 -

to the contribution of Greenwood Products, Inc., which is a wholly owned subsidiary of Jewett-Cameron Lumber Company.  Fiscal 2003 was the first full fiscal year that Greenwood Product, Inc. operated as a subsidiary of Jewett-Cameron Lumber Company, whereas in Fiscal 2002 it only operated for six months.  Jewett-Cameron Seed Company, a wholly owned subsidiary of ours also contributed with an increase in sales of $614,968 or 23.5% during Fiscal 2003 as compared to Fiscal 2002.

We continued to experience a decrease in sales in the area of lumber and building materials which our management believes was due to recessionary conditions in the economy causing customers to scale back their purchases of these discretionary items.  The loss of revenue from these products has been offset by the sales increases in our other business segments; however, we believe that once consumer confidence strengthens, lumber and building material sales will again trend upward. We have also introduced new products for retailers, which, in the past, concentrated on more expensive items.

Gross profit for Fiscal 2003 increased 8.29% to $7,708,287 from $7,118,361 in Fiscal 2002. (Gross profit for Fiscal 2001 was $4,232,404.)

The cost of goods sold, as a percent of revenue remained relatively stable during Fiscal 2003 (86%), Fiscal 2002 (84%), and Fiscal 2001 (81%).  

Operating expenses increased $1,192,616 during Fiscal 2003 as compared to Fiscal 2002.

Fiscal 2003 was the first full year of operations for Greenwood Products Inc. As would be expected with the larger contribution of Greenwood Products, Inc., general and administrative expenses increased by $307,528 during Fiscal 2003 as compared to Fiscal 2002. This represented an increase of 21% for Fiscal 2003 as compared to Fiscal 2002. The increase in the amount of general and administrative expenses was partially offset by the 27% increase in sales.

General and administrative expenses as a percent of revenue remained virtually constant for Fiscal 2003 (3.2%) and Fiscal 2002 (3.4%). During Fiscal 2001 general and administrative expenses as a percent of revenue was somewhat higher at 5.1%. Our management attributes the lower percentage during Fiscal 2003 and Fiscal 2002 to efficiencies introduced into Jewett-Cameron Seed Company and the additions to total corporate operations of Greenwood Products. The efficiencies introduced included reducing staff levels at the seed company and the elimination of one managerial position.

An increase in wages and employee benefits of $839,067, attributable primarily to staff associated with Greenwood Products, Inc., was also a significant factor in the increase in operating expenses.

General and administrative expenses began to decrease during the second half of Fiscal 2003.  The primary reason for the decrease was a restructuring of the activities of Greenwood Products during the first and second quarters of Fiscal 2003. This restructuring included reductions in salaries resulting from the elimination of some clerical positions and wage cuts resulting from the sales decreases. As a result of these actions, wages and employee benefits decreased from the third quarter of Fiscal 2002 level of $1,540,102 to $1,188,164 for the third quarter of Fiscal 2003. Office expenses also decreased by $52,760 during the third quarter of Fiscal 2003 as compared to the third quarter of Fiscal 2002 resulting from our efforts to reduce expenses.

Interest expense increased from ($53,587) reported in Fiscal 2002 to ($346,030) in Fiscal 2003. The primary reason for the increase in interest expense was the higher level of borrowing resulting from the increased level of inventory required to support the elevated sales level of Fiscal 2003.

The increase in operating expenses coupled with the higher level of interest expense resulted in our net income to decrease during Fiscal 2003 as compared to the two prior fiscal years.

Net Income decreased to $294,144 in Fiscal 2003 from $837,024 in Fiscal 2002 and $712,196 in Fiscal 2001. The corresponding basic earnings per share were $0.20 for Fiscal 2003; $0.56 for Fiscal 2002; and, $0.48 in Fiscal 2001. Diluted earnings per share were $0.19 in Fiscal 2003; $0.53 in Fiscal 2002; and, $0.46 in Fiscal 2001.  

Lumber and Building Materials (JCLC)(JCLC)

Sales in lumber and building materials have decreased in all of the last three fiscal years. Sales of these products decreased 52% in Fiscal 2003 as compared to Fiscal 2002.  

- 30 -

Income from operations associated with the sales of lumber and building materials have also decreased over the past three fiscal years. During Fiscal 2003, we experienced a loss from operations in this business segment of ($124,928).  

As mentioned earlier in this document,Prospectus, we have introduced new products for retailers, which, in the past, concentrated on more expensive items. These new products, which are also described earlier in this document,Prospectus, are less costly and consequently, our overall sales to these retailers are on the rise. These new products, which are described earlier in this document,Prospectus, currently feature lower prices in order to introduce these products into the competitive marketplace. Overall sales to retailers are on the rise. Our management believes that sales in the segment of lumber and building materials will increase as a result of the new products.

Industrial Tools

The Fiscal 1997 renaming of the industrial tools under the "MSI-PRO" label has continued to provide a better product identity and a more efficient use of marketing dollars.  Sales increased to $878,966 during Fiscal 2003 from $776,545 during Fiscal 2002. Our management’s re-organization of this business segment, which included the hiring of a newsales manager two years ago, has resulted in the increase in the sales of our industrial tools.  Income from operations during Fiscal 2003 also increased to $103,362 from $89,043 in the prior fiscal year.

Seed Processing and Sales  

Fiscal 2003 was the third year of operations for Jewett-Cameron Seed Company that was incorporated as a wholly owned subsidiary of Jewett-Cameron Lumber Company in October 2000. At the end of Fiscal 2003, sales from Jewett-Cameron Seed Company were $3,230,151 and income from operations was $46,114. In the prior fiscal year, sales were $2,615,183 and income from operations was $249,526.

Industrial Wood Products (Greenwood Products)

Sales of industrial wood products were $44,195,963 during Fiscal 2003 as compared to $25,561,520 during Fiscal 2002. Fiscal 2003 represented the first full fiscal year of operations for the sale of these products.  Income from operations from the sale of these products increased to $730,781 for Fiscal 2003 as compared to $625,937 for Fiscal 2002.

Liquidity and Capital Resources

Pending $10.0 Million Underwriting

We have filed a preliminary prospectus with the USU.S. Securities & Exchange Commission regarding the offering of 500,000 common shares at a maximum of $20.00 per share.  This offering is self-underwritten on a best-efforts basis.   We have not established a minimum amount of proceeds that we must receive in the offering before any proceeds may be accepted.  Our management anticipates beginning the offering in FebruaryJuly 2006 with completion in late 2006.mid-Summer 2008.

We are under no legal or business requirement to take these actions.  Based on our current working capital position, our policy of retaining earnings, and the line of credit available, we have adequate working capital to meet our needs in the foreseeable future.

Rather, our management is undertaking this for strategic purposes.  We anticipate using the proceeds of the offering to pay downfor future corporate indebtedness, including notes payable.capital needs expected from sales growth.  We believe that our company does not need to retire its long-term debt given the non- material nature of such debt, to continue to grow at its current rate.  By retiring this debt, we will have the option to purchase other businesses in our industry, thus allowing us to accelerate our growth rate. We are currently looking at no specific businesses to purchases.  We are simply positioning ourselves to be able to do this in the future. We anticipate issuing additional shares to the pay for any future purchases.

Our revolving bank debt as of May 31, 2006 was $748,963.46 at 2/92006.$76,446. The bank indebtedness is secured by an assignment of accounts receivable and inventory and real estate.inventory. Interest is calculated at prime or the LIBOR rate plus 190 basis points. The weighted average interest rate for the fiscal yearnine month period ended May 31, 2006 was 5.99% (20047.74% (2005 – 3.52%5.20%).

Credit Risks

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.  We place our cash and cash equivalents with high quality financial institutions and limit the amount of credit exposure with any one institution.  We have concentrations of credit risk with respect to accounts receivable as large amounts of our accounts receivable are concentrated geographically in the United States amongst a small number of customers.  At 8/31/2005 and 8/31/2004, no customers accounted for accounts receivable greater than 10% of total accounts receivable. Our ten largest customers

- 31 -

represented approximately 28%, 34% and 28% of consolidated gross revenues for the years ended August 31, 2005, 2004 and 2003; and, 17%, 17% and 14% of consolidated accounts receivable for the same periods. We maintain allowances for potential credit losses. We control credit risk through insurance, creditcredi t evaluations, credit approvals, credit limits, and monitoring procedures. We perform credit evaluations of our commercial customers but generally do not require collateral to support accounts receivable. .AsAs of August 31, 2005, the largest individual receivable was $481,893 and at August 31, 2004 was $539,039. Insurance coverage for these periods was maintained at $2,450,000 per year.

.

Critical Accounting Policies

The following discussion of critical accounting policies is intended to supplement the Summary of Significant Accounting Policies presented as Note 2 to our 2005 audited consolidated financial statements presented elsewhere in this report.Prospectus.  Note 2 summarizesummarizes the accounting policies and methods used in the preparation of our consolidated financial statements. The policies discussed below were selected because they require the more significant judgments and estimates in the preparation and presentation of our financial statements. On an ongoing basis, management evaluates these judgments and estimates, including whether there are any uncertainties as to compliance with the revenue recognition criteria described below, the recoverability of long-lived assets, as well any allowance required for doubtful accounts. We base our estimates on historical experience, as well as other events and assumptions that are believed to be reasonable at the tim e.th e time. Actual results could differ from these estimates under different conditions.

Revenue recognition

Revenue from the sale of our building supply products, industrial wood products and other specialty products and tools are recognized when the products are shipped, title passes, and collection is reasonable assured.  Title to our products passes once the products are picked up for shipment, and at that point, collection is reasonable assured.  It is at this point that we recognize our revenues from the sale of these products.  For our seed sales, revenues are recognized in a similar fashion as our building supply products.  We also generate revenues from the processing, handling and storage services of seed, which are recognized once the services have been performed, and the collection is reasonable assured.

Impairment of long-lived assets and long lived assets to be disposed of

Management evaluates long-lived assets for impairment in accordance with Statement of Financial Accounting Standards ("SFAS") No. 144"Accounting for the Impairment or Disposal of Long-Lived Assets" and SFAS No. 142"Accounting for Goodwill and Other Intangible Assets". These assets comprise of property, plan and equipment. The impairment review is performed by management, whenever events and circumstances indicate that the assets may be impaired. In performing this review, we estimate the future net cash flows from the assets and compare this amount to the carrying value. If this review indicates the carrying value may not be recoverable, impairment losses are measured and recognized based on the difference between the estimated discounted cash flows over the remaining life of the assets and the assets' carrying value. Changes in our future net cash flow estimates may impact our assessment as to whe ther a particular long-lived asset has been impaired. 

Accounts receivableReceivable

Our accounts receivable is primarily comprised of trade receivables from customers.  When estimating allowance for doubtful accounts, we examine the accounts on an item-by-item basis.  Generally, any account that is over ninety90 days is included in the allowance.  We have on staff a credit manager that constantly monitors accounts receivable, as this is an integral part of our continued cash flows.  No allowance for doubtful accounts has been recognized in the financial statements of our Company because there were no material amounts that were over 90 days, and per the review of our accounts on an item-by-item basis, no material items were considered uncollectible.

Recent Accounting Pronouncements

In December 2004, Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets – an amendment of APB Opinion No. 29” (“SFAS 153”) which amends Accounting Principles Board Opinion No. 29, “Accounting for Nonmonetary Transactions” to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance.  A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange.  SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.

The adoption onof  this standard did not have a material effect on the Company’s financial position and results of operations.

- 32 -

In December 2004, FASB issued Statement of Financial Accounting Standards No. 123R, “Share Based Payment” (“SFAS 123R”).  SFAS 123R supersedes APB 25 and its related implementation guidance by requiring entities to recognize the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards (with limited exceptions) and revises SFAS 123 as follows:

i)

Public entities are required to measure liabilities incurred to employees in share-based payment transactions at fair value and nonpublic entities may elect to measure their liabilities to employees incurred in share-based payment transactions at their intrinsic value whereas under SFAS 123, all share-based payment liabilities were measured at their intrinsic value.

ii)

Nonpublic entities are required to calculate fair value using an appropriate industry sector index for the expected volatility of its share price if it is not practicable to estimate the expected volatility of the entity’s share price.

iii)

Entities are required to estimate the number of instruments for which the requisite service is expected to be rendered as opposed to accounting for forfeitures as they occur.

(iv)iv)

Incremental compensation cost for a modification of the terms or conditions of an award is measured by comparing the fair value of the modified award with the fair value of the award immediately before the modification whereas SFAS 123 required that the effects of a modification be measured as the difference between the fair value of the modified award at the date it is granted and the award’s value immediately before the modification determined based on the shorter of (1) its remaining initially estimated expected life or (2) the expected life of the modified award.

SFAS 123R also clarifies and expands guidance in several areas, including measuring fair value, classifying an award as equity or as a liability and attributing compensation cost to reporting periods.  SFAS 123R does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS 123 as originally issued and Emerging Issues Task Force No. 96-18 “Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods and Services” (“EITF 96-18”).  SFAS 123R also does not address the accounting for employee share ownership plans which are subject to Statement of Position 93-6, “Employers’ Accounting for Employee Stock Ownership Plans”.  Public entities (other than those filing as small business issuers) will be required to apply SFAS 123R as of the first annual reporting period that begins after June 15, 2005. &nbs p;Public entities that file as small business issuers will be required to apply SFAS 123R in the first annual reporting period that begins after December 15, 2005.  For nonpublic entities, SFAS 123R must be applied as of the beginning of the first annual reporting period beginning after December 15, 2005.

Effective for the years on or after December 15, 2005, the Company will recognize all share-based payments to employees, including grants of employee stock options, in the statement of operations based on their fair values.  The adoption of this standard has not yet had an effect on the Company’s financial position and results of operations as no options have been granted since the adoption of this standard.

In May 2005, FASB issued Statement of Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections – A Replacement of APB Opinion No. 20 and FASB Statement No. 3” (“SFAS 154”) which is effective for fiscal years ending after December 15, 2005.  SFAS 154 requires that changes in accounting policy be accounted for on a retroactive basis.  

The adoption onof this standard did not have a material effect on the Company’s financial position and results of operations.

Three Month Period

LIQUIDITY AND CAPITAL RESOURCES

Nine Months Ended November 30, 2005May 31, 2006

As of November 30, 2005 weMay 31, 2006, the Company had working capital of $9,586,075,$10,917,029, which represented an increase of $590,183$1,921,137 as compared to ourthe working capital position of $8,995,892 as of August 31, 2005.  The primary reasonreasons for the increase in working capital was a decreasewere slightly higher Accounts Receivable as well as lower Bank Indebtedness. Bank Indebtedness fell to $76,446 from $2,077,063 as management used cash generated from sales and the sale of property to reduce the amount borrowed under its bank line of credit. A total of $729,383 in our bank indebtedness and accounts payablecash used to pay income taxes during the current nine month period compared to $406,210 in the amount of $1,565,642.   The decrease in bank indebtedness and accounts payable was made possible by the fact that we issued a promissory notesame period in the amount of $2,197,079 secured by our real estate located in North Plains Oregon. The promissory note is due on June 15, 2010 and bears interest at 6.25% per annum.  The aggregate principal repayments required in each of the next five years, assuming the note is renewed under similar terms and conditions, are as follows: $54,000 in 2006, $60,000 in 2007, $64,000 in 2008, $68,000 in 2009 and $73,000 in 2010. At June 15, 2010, the amount of principal at renewal will be approximately $1,876,000.prior year.

- 33 -

Accounts receivable and inventory represented 97%93% of our current assets and both continue to turn over at acceptable rates.

External sources of liquidity include a bank line from the United States National Bank of Oregon.  The total line of credit available is $5.0 million of which there was an outstanding balance on November 30, 2005May 31, 2006 of $1,595,091 and$76,446 compared to an outstanding balance as of August 31, 2005 of $2,077,063. The amounts outstanding under the Company’s bank indebtednessline are primarily used seasonally to purchase inventory ahead of the highest sales demand which are typically Spring and Summer. The amount outstanding under the line is securedthen reduced by an assignmentcash generated from sales. Management recently voluntarily reduced the amount of accounts receivable and inventory. Interest is calculated at either prime or the LIBOR rate plus 190 basis points.bank line from $8.0 million to $5.0 million as it was determined that the lower amount was suitable for the Company’s anticipated short-term borrowing requirements. The weighted average interest rate for the three-monthcurrent period was 7.74% compared to 5.20% for fiscal period ended November 30, 2005 was 6.78%. ForAugust 31, 2005. This increase is consistent with the three-month period ended November 30, 2004overall rise of prevailing inte rest rates in the weighted average interest rate was 4.93%.United States.

Based on ourthe Company’s current working capital position, ourits policy of retaining earnings, and ourthe line of credit available, we havethe Company has adequate working capital to meet ourits needs during the remainder of the current fiscal year.

Fiscal 2005 Ended August 31, 2005

Working capital was $9 million at 8/31/2005, up from $5.5 million at 8/31/2004. Major working capital changes during Fiscal 2005 were:

a.

An increase in the amount of cash of $319,462. This was a result of uncollected funds at year-end. (Deposits received and credited to the checking account but not yet collected by the Bank.)

b.

A decrease in the amount of inventory in the amount of $2,295,788. This was the result of management’s decision to reduce inventory levels.

c.

A decrease in the amount of prepaid expenses in the amount of $69,199. This was the result of a change in the billing cycle for insurance premiums.

d.

A decrease in a note receivable in the amount of $51,509. This was the result of a simple collection of the obligation.

e.

A decrease in bank indebtedness in the amount of $4,172,489. This was the result of the Company paying down the credit line with the funds made available by the real estate mortgage, the increased turnaround of receivables and the reduction in inventory.

f.

A decrease in notes payable in the amount of $1,899,292. This was the result of the payment of the note payable to Greenwood Products per the terms of the original purchase agreement.

Accounts payable, accrued liabilities and accrued income taxes all increased because of the higher level of sales activity, which occurred during the fiscal year.

Notes payable, in the amount of $1,899,292, were paid off during Fiscal 2005.

Our management elected to mortgage our property located in North Plains, Oregon in the amount of $2,197,079 because of the favorable interest rates and these funds were used to pay off the notes payable and for general working capital purposes.

Our daily cash needs are met throughout the year through the bank line-of-credit of Jewett-Cameron Lumber Company (“JCLC”) and from the daily operations associated with the normal course of business.  The bank line-of-credit along with the working capital surplus is considered adequate to support our sales level anticipated for the coming year.

Cash flows from Fiscal 2005 Operating Activities totaled $4,082,325, including the $931,088 Net Income.  Material adjustments included $377,298 of amortization/depreciation; gain on sale of property/plant/equipment of ($8,827), deferred income taxes ($131,000)131,400); and a net change in non-cash working capital items of $2,834,826.

Cash Flows from Fiscal 2005 Investing Activities totaled ($7,661), consisting predominately of the purchase of property, plant and equipment.  Such capital investment related to JCLC facility remodeling to enable production of new products.

Cash Flows Used by 2005 Financing Activities totaled $3,757,202. The Company elected to repay bank indebtedness and notes payable in the aggregate amount of $6,071,781. The funds to accomplish this were received from mortgage debt in the amount of $2,197,079 and subscriptions received in advance in the amount of $117,500. (The subscriptions received in advance resulted from Donald M. Boone, the President of the Company, exercising his stock options) and the reduction of inventory levels.

- 34 -

Fiscal 2004 Ended August 31, 2004

Our working capital was $5.5 million at 8/31/2004, down from $7.4 million last year.  Major working capital changes during Fiscal 2004 were:

a.

Increased inventory at $10,070,201 (up $1,409,720);

b.

Increased accounts payable/accrued liabilities of $3,392,947 (up

$939,944); and,

c.

A shift of notes payable from long-term debt to current liability.

These changes primarily resulted from increased operations.

Our two notes payable were paid down by $362,663.  The $1.9 million notes payable bear interest at US prime rate plus 2% and were due March 2005 (extended from November 2004) or on demand thereafter.  Our management had anticipated repaying these notes during FY2005, perhaps with the proposed proceeds from the planned equity offering.

Our daily cash needs arewere met throughout the year through the bank line-of-credit of Jewett-Cameron Lumber Company (“JCLC”) and from the daily operations associated with the normal course of business.  Our bank line-of-credit along with our working capital surplus was considered adequate to support our sales level anticipated for the coming year.2005.

Cash flows from Fiscal 2004 Operating Activities totaled $642,130, including the $567,140 Net Income.  Material adjustments included $352,933 of amortization/depreciation; gain on sale of property/plant/equipment of ($10,667), deferred income taxes $50,000; and a net change in non-cash working capital items of ($317,276).

Cash Flows from Fiscal 2004 Investing Activities totaled ($494,793), consisting predominately of the purchase of property, plant and equipment.  Such capital investment related to JCLC facility remodeling to enable production of new products.

Our Cash Flows Used by 2004 Financing Activities totaled ($93,275) including proceeds from bank indebtedness in the amount of $242,464; proceeds from the sale of capital stock in the amount of $26,473 (exercise of stock options); and the aforementioned repayment of notes payable of ($362,663).

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We did not have any derivative financial instruments as of 8/31/2005.

Our interest income and expense are most sensitive to changes in the general level of U.S. interest rates.  Therefore, changes in U.S. interest rates affect the interest earned on our cash equivalents as well as interest paid on debt.  We have lines of credit and other debt whose interest rates are based on various published prime rates that may fluctuate over time based on economic changes in the environment.  We are subject to interest rate risk and could be subject to increased interest payments if market interest rates fluctuate.  We do not expect any change in the interest rates to have a material adverse effect on our results from operations.

Foreign Currency Risk

We operate primarily in the United States; however, some business is transacted with Canadian firms.  Our business and financial condition is, therefore, sensitive to currency exchange rates or any other restrictions imposed on its currency.

- 35 -

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The table below shows our directors; their respective ages; and, the date on which they becomebecame directors.

Directors

(1)  Member of Audit Committee.

(2)  Resident of Canada.

(3)  Resident of Oregon, USA.

(4)  Resident of Washington, USA

The table below shows our officers; their positions and the year in which our Board of Directors approved them.

Executive Officers

Business Experience

Donald M. Boone has over thirty-eight years in sales and corporate management, including twenty-seven years affiliated with companies in the forest products industry.  In his capacity as the President of our Company, during the past five years, Mr. Boone has supervised the strategic planning and business development functions of our company.  In this regard, he was responsible for our purchase of certain assets of AgriBioTech in early Fall of 2000 and, and more recently, the purchase of the assets of Greenwood Forest Products in early 2002. Once these acquisitions were completed, Mr. Boone oversaw the incorporation of Jewett-Cameron Seed Company and the incorporation of Greenwood Products.

Daniel R. McDonell holds a degree in Accounting from Pacific Lutheran University and has held senior financial and management positions with several public and Fortune 500 companies in the Portland Area. His experience includes financial management and reporting as well as Sarbanes-Oxley compliance. From 2005 to 2006, he was a Securitization Manager with Wilshire Credit Corp, managing a department of ten which serviced $24 billion of loan assets. From 2004 to 2005, he was Controller for Tribune Broadcast Holdings and managed a television station in Portland. He has also been a Divisional Controller for Airgas, where he managed the Northwest region; Manager of Financial Reporting for Unicapital Corporation, and Director of Financial Reporting for Hollywood Entertainment.

Michael C. Nasser has over thirty-three years experience in sales and corporate management, including twenty-eight years affiliated with companies in the forest products industry. He oversees the sales operations for Jewett-Cameron Lumber Company and in that capacity supervises the direct sales staff and the independent contractors who are involved in selling the product line.  

James R. Schjelderup was a computer consultant in the areas of both hardware and software in Canada until two years ago when he became the sale manager of ACME COMPUTERS.  In that capacity he is responsible for the sales operation of this retail outlet.   

Ted Sharp is a Certified Public Accountant who is a graduate of the University of Oregon with a Bachelor of Science Degree in Economics. He also attended Portland State University where he did post graduate studies in accounting and finance prior to receiving his CPA designation. He has been the Controller of Cherry City Electric, an unrelated private company located in Salem, Oregon, for the past three years. Prior to that time he was the ControllerChief Financial Officer of Cord Communications for the period April 1998 through April 1999. Subsequently, Cord Communications merged with Westower Communications, Inc., a Canadian company. For the period April 1999 through May 2002, Mr. Sharp was employed by Westower Communications, Inc.. This company was subsequent merged into Spectra Site Communications, an unrelateda publicly traded U.S. company. Mr. Sharp was employed as Controller of this company located in North Carolina.for the period May 2002 through June 2002. Since that time, he has been employed by Cherry City El ectric. The forgoing are not related to Jewett Cameron Trading Company Ltd.

Alexander B. Korelin is the founder and president of A.B. Korelin and Associates, Inc. – a company that provides services consisting of SEC filings (edgar) and investor relations to public companies. He has been doing this work since 1982. He is also the founder and co-host of The Korelin Economics Report which is a weekly radio program which deals with business topics. He has been doing this radio program since 1990. He received his Bachelor of Arts Degree (Economics) from the University of Washington in 1967 and his Master of Business Administration Degree (Finance) from the University of Puget Sound.

- 36 -

There have been no events during the last fiveten years that are material to an evaluation of the ability or integrity of any director, person nominated to become a director, executive officer, promoter or control person including:

a) Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

b) Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

c) Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities or banking activities; and

d) Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.vacated; and,

e)  Cease trade orders or similar orders for a period of 30 plus consecutive days.

Board Composition

Our boardBoard of directorsDirectors currently consists of four members, who are Messrs. Boone, Schjelderup, Sharp, and Korelin. . Our boardBoard of directorsDirectors is a single class, with each director serving a one year term until annual meeting of stockholders. Our directors hold office until their successors have been elected or qualified or until the earlier of their death, resignation, disqualification or removal. Under Rule 4350(c) of the Nasdaq National Market, our board must consist of a majority of independent directors. Our board has determined that three of our four directors, namely Messrs.  Schjelderup, Sharp and Korelin are independent under such standards.

There are no arrangements or understandings between any two or more Directors or Executive Officers, pursuant to which he/she was selected as a Director or Executive Officer.  There are no family relationships, material arrangements or understandings between any two or more Directors or Executive Officers.

The members of the Board of Directors are elected to one-year terms.

Committees of the Board of Directors

The Board of Directors has only one standing committee, namely the Audit Committee. We do not have a Compensation Committee or a Nominating Committee.

Audit Committee Report

The Audit Committee’s functions are to recommend the appointment of independent accountants; review the arrangements for and scope of the audit by independent accountants; review the independence of the independent accountants; consider the adequacy of the system of internal accounting controls and review any proposed corrective actions; review and monitor our policies relating to ethics and conflicts of interests; and discuss with management and the independent accountants our draft annual and quarterly financial statements and key accounting and/or reporting matters. The Board, in light of the increased responsibilities placed on the Audit Committee during 2002 by the Sarbanes-Oxley Act and the SEC, adopted an Amended and Restated Charter in late 2002. All current members of the Audit Committee are “independent” within the meaning of the new regulations from the SEC regarding audit committee membership. The Audit Committee includes at least one independent member who is determined by the Board of Directors to meet the qualifications of an “audit committee financial expert” in accordance with SEC rules, including that the person meets the relevant definition of an “independent director.”  Our “audit committee financial expert” who satisfies that definition under the Sarbanes-Oxley Act is Ted Sharp.  Stockholders should understand that this designation is a disclosure requirement of the SEC related to Mr. Sharp’s experience and understanding with respect to certain accounting and auditing matters. The designation does not impose upon Mr. Sharp any duties, obligations or liability that are greater than are generally imposed on him as a member of the Audit Committee and the Board, and his designation as an audit committee financial expert pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of the Audit Committee or the Board.

There are no other committees of the Board of Directors.

- 37 -

Code of Ethics

We are committed to maintaining the highest standards of business conduct and ethics. Our Code of Business Conduct and Ethics, or the Code, reflects the business practices and principles of behavior that support this commitment. The Code satisfies SEC rules for a “code of ethics” required by Section 406 of the Sarbanes-Oxley Act of 2002, as well as the Nasdaq listing standards requirement for a “code of conduct.” The Code is not yet available at our Website, and weWebsite.  We will post any amendment to the Code, as well as any waivers that are required to be disclosed by the rules of the SEC or the Nasdaq, on our Website.

Executive Compensation

We have no formal plan for compensating our Directors for their service in their capacity as Directors.  The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of us other than services ordinarily required of a Director.  No Director received any compensation for his services as a Director, including his committee participation and/or special assignments, other than indicated below.

We grant stock options to our Directors, Executive Officers and employees.

We established an Employee Stock Ownership Plan (“ESOP”) that covers all of our employees.

We have a 401K Plan the terms of which call for us to contribute 3% of the first $100,000 of each of our employee’s income to the Plan. Other than participation in our stock option plan and/or ESOP and/or 401K, no funds were set aside or accrued by us during Fiscal 2005 to provide pension, retirement or similar benefits for Directors or Executive Officers.

We have no plans or arrangements in respect of remuneration received or that may be received by Executive Officers of ours’ in Fiscal 2005 to compensate these officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$60,000 per Executive Officer.

No Executive Officer/Director received other compensation in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Executive Officers/Directors as a group did not receive other compensation, which exceeded US$25,000 times the number of persons in the group or 10% of the compensation.

Except for our stock option plan, ESOP and 401K Plan we have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our Directors or Executive Officers.  However, Michael C. Nasser and Donald M. Boone receive a discretionary bonus.

Compensation Committee Interlocks and Insider Participation

No member of ourWe do not have a compensation committee and nonecommittee. None of our executive officers have a relationship that would constitute an interlocking relationship with executive officers and directors of another entity.

We have no written employment agreements.

The table below shows the amount of money that was paid to our twothree officers over the last three years.  

Summary Compensation Table

                                                                                       Annual Compensation                                             

Effective June 5, 2006, Mr. McDonell joined the Company. His annual salary is $84,000. The above chart only reflects compensation for officers in 2003, 2004, and 2005.

Employee Stock Ownership Plan

The Company sponsors an employee stock ownership plan (“ESOP”) that covers all U.S. employees who are employed by the Company on August 31st of each year and who have at least one thousand hours with the companyCompany in the twelve months preceding that date. The ESOP grants to participants in the plan certain ownership rights in, but not possession of, the common stock of the Company held by the Trustee of the Plan.  Shares of common stock are allocated annually to participants in the ESOP pursuant to a prescribed formula.  The Company accounts for its ESOP in accordance with Statement of Position 93-6 (Employers’ Accounting for Employee Stock Ownership Plans).  The Company records compensation expense equal to the market price of the shares acquired on the open market.  ESOP compensation expense was $182,141, $143,220, $143,050 and $155,051 for Fiscal 2005/2004/2003/2002, respectively.  The ESOP shares allocated as of August 31, 2005/200 4/2003/2002 were 267,323, 272,089, 245,375 and 221,561, respectively.  The contributions for Donald Boone were $1,800, $2,268, $1,980, and $2,520 for Fiscal 2005/2004/2003/2002, respectively; the contributions for the Michael Nasser were $5,000, $6,300, $6,000, and $7,000 for Fiscal 2005/2004/2003/2002, respectively.  There are no un-funded liabilities.

As of March 31, 2006, our ESOP held 261,191 common shares or 17.6% of our issued and outstanding shares.

Stock Option Program

Stock Options to purchase securities from us can be granted to Directors and Employees of ours on terms and conditions acceptable to the regulatory authorities in Canada, notably the Toronto Stock Exchange, the Ontario Securities Commission and British Columbia Securities Commission.  We do have noa formal written stock option plan.

Under our stock option program, stock options for up to 10% of the number of our issued and outstanding common shares may be granted from time to time, provided that stock options in favor of any one individual may not exceed 5% of our issued and outstanding common shares.  No stock option granted under the stock option program is transferable by the optionee other than by will or the laws of descent and distribution, and each stock option is exercisable during the lifetime of the optionee only by such optionee.

The exercise price of all stock options granted under the stock option program must be at least equal to the fair market value (subject to regulated discounts) of such common shares on the date of grant, and the maximum term of each stock option may not exceed ten years and are determined in accordance with Toronto Stock Exchange ("TSE") guidelines.

The names and titles of our Directors and Executive Officers to whom outstanding stock options have been granted and the number of common shares subject to such options are set forth in the following table as of 01/08/06,May 31 2006, as well as the number of options granted to Directors and all employees as a group.

 Stock Options Outstanding

- 39 -

COMPENSATION PURSUANT TO STOCK OPTIONS

The following table sets forth information on option grants in fiscal year 2005 to the Named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR

There were no stock options grants in the last Fiscal Year

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

The following table provides information on option exercises in fiscal year 2005 by the Named Executive Officers and the value of their unexercised options at August 31, 2005.  

Limitation of Liability and Indemnification

Our certificateArticles of incorporationIncorporation limits the personal liability of our board members for breaches by them of their fiduciary duties. Our bylaws also require us to indemnify our directors and officers to the fullest extent permitted by British Columbia law. British Columbia law provides that directors of a corporation willmay not be personally liable for monetary damages for breach of their fiduciary duties as directors, except liabilityindemnified for any of the following acts:

Such limitation of liability may not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission. In addition British Columbia laws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in such capacity, regardless of whether indemnification would be permitted under British Columbia law. We currently maintain liability insurance for our directors and officers.

- 40 -

We have already purchased errors and omissions insurance covering our Board of Directors, in addition to the indemnification provided for in our certificateArticles of incorporation and bylaws.Incorporation. These agreements, among other things, will provide for indemnification of our directors and executive officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of  Jewett-Cameron, arising out of such person’s services as a director or executive officer of ours, any subsidiary of ours or any other company or enterprise to which the person provided services at our request. We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

We are a publicly-owned corporation and our shares are owned by United States residents, Canadian residents, and residents of other jurisdictions.  Another corporation or any foreign government does not control us directly or indirectly.  There are no arrangements that may result in a change of control of our company.

We are aware of two individuals who own more than five percent (5%) of our common stock. These two people are listed in the table below.

The table below also lists as of 11/30/05May 31, 2006 all Directors and Executive Officers who beneficially own our voting securities and the amount of our voting securities owned by the Directors and Executive Officers as a group.

Shareholdings of Directors and Executive Officers

(1) U.S. National Bank, Trustee for

At March 31, 2006, the  Jewett-Cameron Trading Co. Ltd. Employee Stock Option Plan and Trust, is the holder of 147,667held 261,191 common shares, which represents 14.5%17.6% of the issued and outstanding shares.

 (2)

Addresses:

c/o Jewett-Cameron Trading Company Ltd.

32775 NW Hillcrest, North Plains, Oregon  97133

 (3)

 52,500 represent currently exercisable stock options.

#  Based on 1,459,8581,584,859 shares outstanding as of 11/30/05May 31, 2006 and currently exercisable stock options owned by each beneficial  Stockholder.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Private Placements of Equity Securities.    Since August 1, 1999, we have not completed any private placements of securities.

Other Transactions

Loans to Executive Officers.    We do not have any loans outstanding to any of our directors or executive officers.

Stock Options Granted to Directors and Executive Officers.    For more information regarding the grant of stock options to directors and executive officers, please see “Management—Director Compensation” and “—Executive Compensation.”

- 41 –

Indemnification and Insurance.    Our bylawsArticles of Incorporation require us to indemnify our directors and executive officers to the fullest extent permitted by British Columbia law. We intend to enter into indemnification agreements with all of our directors and executive officers and to purchasehave purchased directors’ and officers’ liability insurance prior to the consummation of this offering.insurance. In addition, our certificateArticles of incorporationIncorporation will limit the personal liability of our board members for breaches by the directors of their fiduciary duties.members. See “Management--Limitation of Liability and Indemnification.”

Executive Compensation And Employment Agreements.  Please see "Management--Executive Compensation" and "Management---Stock Options" for additional information on compensation of our executive officers. Information regarding employment agreements with several of our executive officers is set forth under "Management--Employment Agreements."

LEGAL MATTERS

Issues as to the securities laws of the United States in connection with this Offering will be passed upon for us by Charles A. Cleveland, P.S., Attorney at Law, Suite 304, Rock Pointe Corporate Center, 1212 North Washington, Spokane, Washington, 99201-2401. Issues as to the corporate and securities laws of Canada and British Columbia in connection with this Offering will be passed upon for us by Richards Buell Sutton, Suite 700, 401 West Georgia Street, Vancouver, British Columbia, V6B 5A1.

EXPERTS

Our financial statements as of the year ended August 31, 2005, included in this prospectusProspectus and in the registration statement,Registration Statement, have been audited by Davidson & Company, independent chartered accountants, as stated in their report appearing herein.  

WHERE YOU CAN FIND MORE INFORMATION

 We have filed with the SEC, a registration statement on Form S-1 under the Securities Act with respect to the common shares offered in this prospectus. This prospectus, filed as part of the registration statement, does not contain all of the information set forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules and regulations of the SEC. For further information about us and our common shares, we refer you to the registration statement and to its exhibits and schedules. Anyone may inspect the registration statement and its exhibits and schedules without charge at the public reference facilities the SEC maintains at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain copies of all or any part of these materials from the SEC upon the payment of certain fees prescribed by the SEC. You may obtain further information about the operation of the SEC's Public Ref erence Room by calling the SEC at 1-800-SEC-0330. You may also inspect these reports and other information without charge at a web site maintained by the SEC. The address of this site is http://www.sec.gov.

ENFORCEABILITY OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES LAWS AND OTHER MATTERS

We are organized under the laws of British Columbia, Canada. At the current time we have one director and no directors and officers who live outside the United States nor do we have any assets in Canada or any foreign country. However, if we ever have any foreign assets or directors and officers who live outside the United States, and whose assets may be located outside the United States it will be difficult for investors to effect service of process within the United States upon its non-U.S. directors and officers or to recover against us, or its non-U.S. directors and officers on judgments of U.S. courts, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. Further, no claim may be brought in Canada against us or our directors and officers in the first instance for violation of U.S. federal securities laws because these laws have no extraterritorial jurisdiction under Canadian law and do not have force of law in Canada. A Canadian court may, however, impose civil liability on us or our directors and officers if the facts alleged in a complaint constitute or give rise to a cause of action under Canadian law. However, we may be served with process in the United States with respect to actions against it arising out of or in connection with violations of U.S. federal securities laws relating to offers and sales of common shares made hereby by serving CT Corporation System, its U.S. agent, irrevocably appointed for that purpose.

Further, we have been advised by Richards Buell Sutton LLP that there are grounds upon which Canadian courts may not enforce judgments of U.S. courts. Because judgments of U.S. courts are not automatically enforceable in Canada, it may be difficult for you to recover against us based upon such judgments.

- 42 -

FEDERAL TAX CONSIDERATIONS TO NON-UNITED STATES  AND UNITED STATES HOLDERS

Material Tax Considerations to Non-U.S. Holder

The following is a summary of material United States federal income and estate tax considerations to a non-United States holder (as defined below) relating to the acquisition, ownership and disposition of shares of common stock purchased in this offering, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based on the Internal Revenue Code of 1986, as amended, or, the Code, final, temporary and proposed United States Treasury regulations promulgated thereunder, Internal Revenue Service rulings, official pronouncements and judicial decisions, all as in effect on the date hereof and all of which are subject to change, possibly with retroactive effect, or different interpretations. This summary does not address all the tax consequences that may be relevant to certain non-United States holders in light of the holder’s particular circumstances and it is not intended to be applicable in all respects to al l categories of non-United States holders, some of whom may be subject to special rules not discussed below. The discussion below deals only with shares of common stock held as “capital assets” within the meaning of the Code (generally, property held for investment), and does not address purchasers of the common stock that may be subject to special rules (including, without limitation, certain expatriates, financial institutions, tax-exempt organizations, insurance companies, dealers in securities or currencies, traders in securities, partnerships or other pass through entities, holders whose functional currency is not the United States dollar and persons that hold the common stock as part of a straddle, hedge, conversion or other integrated transaction). In addition, the following discussion does not address any state, local or foreign tax considerations that may be relevant to a non-United States holder’s decision to purchase, own or dispose of shares of common stock.

The rules governing the United States federal income and estate taxation of a non-United States holder are complex, and no attempt will be made herein to provide more than a summary of those rules. Special rules may apply to a non-United States holder that is a controlled foreign corporation, passive foreign investment company or foreign personal holding company and therefore subject to special treatment under the Code. NON-UNITED STATES HOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS TO DETERMINE THE EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS WITH REGARD TO THE PURCHASE, OWNERSHIP AND DISPOSITION OF SHARES OF COMMON STOCK, INCLUDING ANY REPORTING REQUIREMENTS.

For purposes of the federal income tax portion of this summary, a “non-United States holder” is a beneficial owner of common stock that for United States federal income tax purposes is a nonresident alien or a corporation, trust or estate that is not (1) a corporation created or organized in or under the laws of the United States or any political subdivision thereof, (2) an estate the income of which is subject to United States federal income taxation regardless of its source or (3) a trust (a) that is subject to the supervision of a court within the United States and one or more United States persons (as described in section 7701(a)(30) of the Code) have the authority to control all substantial decisions of the trust or (b) that has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

For purposes of the federal estate tax portion of this summary, a “non-United States holder” is a beneficial owner of common stock who is an individual who is not a United States citizen and who is not domiciled in the United States and who is not otherwise a resident of the United States for federal income tax purposes. A person acquires a domicile in the United States by living in the United States, even for a brief period, with “no definite present intention” of later removing from the United States. If domicile exists in the United States, an intention to change domicile does not actually effect such a change unless accompanied by an actual removal from the United States.

Dividends on Common Stock

Generally, any dividends paid to a non-United States holder of common stock will be subject to United States federal income tax withholding at a rate of 30% of the amount of the dividend, or at a lower applicable income tax treaty rate. However, if the dividend is effectively connected with the conduct of a United States trade or business of a non-United States holder, and, if certain tax treaties apply, is attributable to a United States permanent establishment maintained by such non-United States holder, a non-United States holder generally will be taxed in the same manner as a United States holder. An effectively connected dividend received by a corporate non-United States holder may also, under certain circumstances, be subject to an additional “branch profits tax” at a 30% rate (or, if applicable, a lower treaty rate). Even though an effectively connected dividend is subject to United States federal income tax, and may be subject to the branch profits tax, i t is not subject to withholding tax (unless derived through a partnership) if the non-United States holder delivers Internal Revenue Service Form W-8ECI (or successor form) annually to us or our agent.

- 43 -

United States Treasury regulations require a non-United States holder to provide certain certifications under penalties of perjury that such holder is not a United States person in order to obtain treaty benefits (and avoid backup withholding as discussed below), a non-United States holder must deliver to us or our agent a properly executed IRS Form W-8BEN (or successor form).

A non-United States holder of common stock eligible for a reduced rate of United States withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the Internal Revenue Service.

A non-United States holder will not incur tax on a distribution in excess of our current and accumulated earnings and profits if the excess portion of the distribution does not exceed the adjusted basis of such holder’s common shares. Instead, the excess portion of the distribution will reduce the adjusted basis of the shares. A non-United States holder will be subject to tax on a distribution that exceeds both our current and accumulated earnings and profits and the adjusted basis of its shares, if the non-United States holder otherwise would be subject to tax on gain from the sale or disposition of common shares, as described below. Because we generally cannot determine at the time we make a distribution whether or not the distribution will exceed our current and accumulated earnings and profits, we plan to withhold U.S. income tax at the rate of 30% on the gross amount of any distribution paid to a non-United States holder unless (i) a lower treaty rate applies and the non-United States holder files Internal Revenue Service Form W-8BEN (or successor form) evidencing eligibility for that reduced rate with us or our agent; or (ii) the non-United States holder files Internal Revenue Service Form W-8ECI (or successor form) with us or our agent claiming that the distribution is effectively connected income. However, a non-United States holder may obtain a refund of amounts we withhold if we later determine that a distribution in fact exceeded our current and accumulated earnings and profits.

Sale, Exchange or Other Disposition of Common Stock

Subject to the discussion of backup withholding below, any gain realized upon a sale, exchange or other disposition of common stock by a non-United States holder generally will not be subject to United States federal income tax unless:

(1)  the gain is effectively connected with a trade or business conducted by the non-United States holder in the United States, and, if certain tax treaties apply, is attributable to a permanent establishment in the United States maintained by such holder,

(2)  in the case of a non-resident individual who holds stock as a capital asset, the individual has been present in the United States for a period or periods aggregating 183 days or more during the taxable year of the disposition, and certain other requirements are met, or

(3)  in the case of a non-United States holder who owns or has owned, actually or constructively, during the relevant statutory period more than 5% of our stock, we are or have been a “United States real property holding corporation” for United States federal income tax purposes and certain other requirements are met.

Although there can be no assurance, we do not believe that we have been or currently are a “United States real property holding corporation”.

If the gain is effectively connected with a trade or business conducted by the non-United States holder in the United States, and, if certain tax treaties apply, is attributable to a permanent establishment in the United States maintained by such holder, the non-United States holder generally will recognize capital gain or loss equal to the difference between the amount of cash proceeds and the fair market value of any property received in the sale, exchange or other disposition and the non-United States holder’s adjusted tax basis in the shares of common stock sold, exchanged, or otherwise disposed.

Federal Estate Taxes

Common stock that is beneficially owned by an individual non-United States holder at the time of death will be included in the individual’s gross estate for United States federal estate tax purposes, unless an applicable estate tax treaty provides otherwise. The individual’s gross estate might also include the value of common stock which is held indirectly by the individual through one or more domestic or foreign entities. Non-United States holders are encouraged to consult their tax advisors regarding the inclusion of the value of the common stock in their gross estate in cases where it is owned indirectly through one or more entities.

Backup Withholding and Information Reporting

Dividends on common stock paid to a non-United States holder will generally be exempt from backup withholding tax, provided that non-United States holders meet applicable certification requirements or otherwise establish an exemption. Non-United States holders that fail to meet these requirements will be subject to backup withholding at the rate of 28%.

- 44 –

Payments of the proceeds from the sale of shares of common stock by or through the United States office of a broker will be subject to information reporting and backup withholding unless the non-United States holder certifies under penalties of perjury that it is a non-United States holder or otherwise establishes an exemption from information reporting and backup withholding.

Information reporting requirements and backup withholding tax generally will not apply to any payment of the proceeds of the sale of shares of common stock effected outside the United States by a foreign office of a “broker” (as defined in applicable United States Treasury Regulations). However, if the broker:

(1)  is a United States person,