UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)
              (X)QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 1999

                                       OR

              ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to
                              ---------------------  ---------------------
Commission file number: 0-19954

                      JEWETT-CAMERON TRADING COMPANY, LTD.
                      ------------------------------------
             (Exact name of registrant as specified in its charter)

         BRITISH COLUMBIA                                     NONE
(State or other jurisdiction of             (IRS Employer Identification Number)
    incorporation or organization)

                32275 N.W. Hillcrest, North Plains, Oregon 97133
                ------------------------------------------------
                    (Address of Principal Executive Offices)

     Registrant's telephone number, including area code: (503) 647-0110

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  since  May  16,  1992  and  (2)  has  been  subject  to the  above  filing
requirements for the past 90 days.

Yes  X   No
   -----   -----
                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

         Indicate by check mark whether the  registrant  has filed all documents
and reports  required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.

Yes     No
   -----  -----
                      APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date. Common Stock: 1,157,162 Shares.
                                                               ---------
<PAGE>
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

         Attached hereto and incorporated herein by reference.

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.

Forward-Looking Information:

The following  information  contains  certain  forward-looking  statements  that
anticipate  future  trends or  events.  These  statements  are based on  certain
assumptions  that may prove to be  erroneous  and are  subject to certain  risks
including but not limited to the risks of increased competition in the Company's
industry  and other risks  detailed in the  Company's  Securities  and  Exchange
Commission filings. Accordingly, actual results may differ, possibly materially,
from the predictions contained herein.

Overview:

During the third  quarter of Fiscal  1999,  ended May 31st,  the  Company had an
increase in gross  sales of $849,586 as compared to the third  quarter of Fiscal
1998.  The  increase  in net  income  for the third  quarter  of Fiscal  1999 as
compared to the third quarter of Fiscal 1998 was $40,602.

Results of Operations.

For the third quarter of the current fiscal year,  ending March 31, 1999,  gross
sales increased 8.5% to $10,849,674 compared to $10,000,088 for the same quarter
of the previous year.

General and administrative  expenses for the Company were $766,556 for the third
quarter up from $608,676 for the third quarter of last year. The primary reasons
for the increase of $157,880  are  increases  of $145,522 in the  categories  of
"wages and employee benefits";  and, $24,015 in "professional fees".  Decreases;
however, did occur in the categories of "depreciation and amortization"; "office
and   miscellaneous"   "warehouse   expenses  and  supplies"  and  "repairs  and
maintenance". The decreases in these categories totaled $11,661.

Net income for the quarter was $235,645 which represents a 21% increase over the
third  quarter of last year when net income was  $195,043.  The  increase in net
income was due primarily to a 57% increase in income from operations.

Earnings  per share was $0.20 for the third  quarter of Fiscal 1999  compared to
$0.17 for the third quarter of fiscal 1998.

For the nine-month  period ended May 31, 1999, Sales for  Jewett-Cameron  Lumber
were  $17,802,645,  up 3.6% compared to sales of $17,189,841  for the first nine
months of last year.


<PAGE>
Sales for MSI-PRO  (pneumatic tools and industrial clamps) were $824,621 for the
first nine months  compared to $960,050  for the first nine months of last year,
down 14.1%

Sales for Jewett-Cameron South Pacific in the Kingdom of Tonga were $248,575 for
first nine months  compared to $683,246  for the first nine months of last year,
down 63.6%.

For the  nine-month  period ended May 31, 1999,  gross profit as a percentage of
sales increased by about 2.85% and income before taxes increased by $215,602.

In the nine-month  period ended May 31, 1999, the net income was $467,816 versus
a net income of $364,093 for the same period last year.  Nine-month earnings per
share were $0.40 versus $0.31 last year.

Liquidity and Capital Resources

As of May  31,  1999  the  Company  had  working  capital  of  $3,961,687  which
represented a decrease of $712,757 as compared to the working  capital  position
of $4,674,444 as of May 31, 1998.  The decrease in working  capital was due to a
decrease  in cash and cash  equivalents  of  $414,437,  a decrease  in  accounts
receivable  of  $83,292,  a decrease  in income tax  receivable  of  $24,873,  a
decrease  in  inventory  of  $1,013,380  and a decrease  in prepaid  expenses of
$24,283. In the category of current liabilities,  bank indebtedness decreased by
$1,450,542 and accounts payable and accrued liabilities increased by $603,034.

Accounts  Receivable and Inventory  represented 94.5% of 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 as of May 31, 1999 of $2,500,000..  As of
the end of Fiscal 1998 (August 31st) the Company had an  outstanding  balance of
$767,321 and at the end of the first quarter of Fiscal 1999,  the Company had no
outstanding balance.

Based on the Company's current working capital position, its policy of retaining
earnings,  and the line of credit  available,  the Company has adequate  working
capital to meet its needs during the current fiscal year.

Impact of the Year 2000 Issue:

The Company has  completed as assessment of the impact of the Year 2000 issue on
its internal  systems and  equipment,  on its products and on the systems of its
significant  vendors.  Based on this  assessment,  the company believes that its
internal  systems have been updated to address the Year 2000 issue, its products
will  properly  recognize  calendar  dates  beginning in the Year 2000,  and its
significant   vendors  are   appropriately   addressing  the  Year  2000  issue.
Accordingly, the Company believes it is Year 2000 ready and does not expect that
the Year 2000 will have a material impact on the Company's business,  results of
operations or financial condition.  However,  there can be no assurance that the
systems of other  companies on which the Company relies will not have an adverse
effect on the Company's systems.


<PAGE>
Subsequent Events

         None

                           PART II - OTHER INFORMATION

Item 6.  Exhibits

Financial Statements

                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                        Jewett-Cameron Trading Company Ltd.
                                                     (Registrant)


Dated: July 13, 1999                    By: /s/ Donald M. Boone, President & CFO
                                            ------------------------------------

<PAGE>















                       JEWETT-CAMERON TRADING COMPANY LTD.

                        CONSOLIDATED FINANCIAL STATEMENTS
                           (Expressed in U.S. Dollars)
                       (Unaudited - See Notice to Reader)

                                   MAY 31, 1999


<PAGE>
                        [Davidson & Company Letterhead]












                                NOTICE TO READER


We have  compiled  the  consolidated  balance  sheet of  Jewett-Cameron  Trading
Company Ltd. as at May 31, 1999 and the  consolidated  statements of operations,
cash flows, and changes in  shareholders'  equity for the nine month period then
ended from information provided by management.  We have not audited, reviewed or
otherwise  attempted to verify the accuracy or completeness of such information.
Readers are cautioned that these  statements  may not be  appropriate  for their
purposes.



                                                           /s/Davidson & Company

Vancouver, Canada                                          Chartered Accountants

June 30, 1999



<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED BALANCE SHEET
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>

                                           May 31,       May 31,     August 31,
                                              1999          1998           1998
                                        ----------    ----------     ----------
ASSETS
<S>                                    <C>           <C>             <C>
Current
   Cash and cash equivalents           $   379,693    $  794,130     $   52,929
   Accounts receivable                   3,986,176     4,069,468      2,006,270
   Income tax receivable                         -        24,873             -
   Inventory                             3,809,946     4,823,326      3,048,803
   Prepaid expenses                         73,120        97,403         45,753
                                        ----------    ----------     ----------

 Total current assets                    8,248,935     9,809,200      5,153,755

 Capital assets (Note 3)                 1,568,273     1,623,422      1,594,346

 Deferred financing charges (Note 4)             -         1,792              -

 Deferred income taxes (Note 5)            203,200        33,700        203,200

 Deposits                                   74,345        83,345         74,345

 Trademarks (Note 6)                       172,686       201,998        194,587
                                        ----------    ----------     ----------

                                       $10,267,439   $11,753,457     $7,220,233
===============================================================================

                                  - continued -

     The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED BALANCE SHEET
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
==========================================================================================================
                                                                 May 31,           May 31,      August 31,
                                                                    1999              1998            1998
                                                             ------------     ------------    ------------

Cont'd...

LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                                          <C>              <C>             <C>
Current
   Bank indebtedness (Note 7)                                $  2,500,000     $  3,950,542    $    767,321
   Accounts payable and accrued liabilities                     1,787,248        1,184,214         736,263

Total current liabilities                                       4,287,248        5,134,756       1,503,584

Convertible debentures (Note 8)                                         -          549,040               -

Deferred foreign exchange gain                                          -            6,088               -
                                                             ------------     ------------    ------------
                                                                4,287,248        5,689,884       1,503,584
                                                             ------------     ------------    ------------
Shareholders' equity
  Capital stock
    Authorized
      20,000,000 common shares, without par value
      10,000,000 preferred shares, without par value
    Issued
      1,157,162  common shares (May 31, 1998 - 1,164,762;
                  August 31, 1998 - 1,176,762)                  1,932,096        1,926,235       1,960,368
  Additional paid-in capital                                      582,247          582,247         582,247
  Retained earnings                                             3,664,441        3,555,091       3,291,664
                                                             ------------     ------------    ------------

                                                                6,178,784        6,063,573       5,834,279

Less: Treasury stock - 39,600 common shares (May 31,1998 - Nil;
                      August 31, 1998 - 20,600)                  (198,593)              -         (117,630)
                                                             ------------     ------------    ------------


                                                                5,980,191        6,063,573       5,716,649
                                                             ------------     ------------    ------------
                                                             $ 10,267,439     $ 11,753,457    $  7,220,233
==========================================================================================================

     The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
================================================================================================================
                                                  Three month      Three month       Nine month       Nine month
                                                 period ended     period ended     period ended     period ended
                                                      May 31,          May 31,          May 31,          May 31,
                                                         1999             1998             1999             1998
----------------------------------------------------------------------------------------------------------------
<S>                                             <C>              <C>              <C>              <C>
SALES                                           $  10,849,674    $  10,000,088    $  18,875,841    $  18,833,137

COST Of SALES                                       9,425,898        8,972,509       16,024,948       16,448,426

GROSS PROFIT                                        1,423,776        1,027,579        2,850,893        2,384,711

GENERAL AND ADMINISTRATIVE
EXPENSES - Schedule                                   766,556          608,676        1,898,410        1,595,373
                                                -------------    -------------    -------------    -------------
Income from operations                                657,220          418,903          952,483          789,338
                                                -------------    -------------    -------------    -------------
OTHER ITEMS
  Amortization of deferred financing charges                -           (5,370)               -          (16,111)
  Interest income                                      21,641           18,154           35,520            1,995
  Interest expense                                    (70,891)        (118,910)        (102,746)        (240,189)
  Foreign exchange gain (loss)                        (12,953)          18,266              931           35,060
  Write-down of inventory                             (48,372)               -          (48,372)               -
                                                -------------    -------------    -------------    -------------
                                                     (110,575)         (87,860)        (114,667)        (219,245)
                                                -------------    -------------    -------------    -------------

Income before income taxes                            546,645          331,043          837,816          570,093

Income taxes                                         (311,000)        (136,000)        (370,000)        (206,000)
                                                -------------    -------------    -------------    -------------
Net income for the period                       $     235,645    $     195,043    $     467,816    $     364,093

================================================================================================================

     The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>



<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
<TABLE>
<CAPTION>
======================================================================================================
                                        Three month      Three month       Nine month       Nine month
                                       period ended     period ended     period ended     period ended
                                            May 31,          May 31,          May 31,          May 31,
                                               1999             1998             1999             1998
------------------------------------------------------------------------------------------------------
<S>                                     <C>             <C>              <C>              <C>

Depreciation and amortization           $    36,101     $     39,440     $    107,605     $    129,188

Insurance                                    15,697           15,510           42,944           34,334

Office and miscellaneous                     61,527           66,686          182,378          147,340

Professional fees                            47,642           23,627          108,375           77,125

Repairs and maintenance                       8,101           10,166           30,032           26,239

Telephone and utilities                      22,753           22,847           67,583           63,300

Travel, entertainment and advertising        38,184           38,273          126,592          108,254

Wages and employee benefits                 513,366          367,844        1,180,411          946,041

Warehouse expenses and supplies              23,185           24,283           52,490           63,552
                                        -----------     ------------     ------------     ------------

                                        $   766,556     $    608,676     $  1,898,410     $  1,595,373
------------------------------------------------------------------------------------------------------






     The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>


<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)

===============================================================================
                                                     Nine Month     Nine Month
                                                   period ended   period ended
                                                        May 31,        May 31,
                                                           1999           1998
-------------------------------------------------------------------------------

CASH FLOWS PROVIDED BY (USED FOR):

OPERATING ACTIVITIES
   Net income for the period                        $   467,816    $   364,093
   Items not involving an outlay of cash:
    Depreciation and amortization                       107,605        129,188
    Amortization of deferred finance charges                  -         16,111
    Amortization of deferred foreign exchange                 -        (35,573)
    Write-down of inventory                              48,372              -
    Other                                                     -          1,523

   Net change in non-cash working capital items:
    Increase in accounts receivable                  (1,979,906)      (997,555)
    Decrease in income taxes receivable                       -         12,787
    Increase in inventory                              (809,515)      (786,726)
    Increase in prepaid expenses                        (27,367)       (30,661)
    Increase in deferred income taxes                         -         (6,500)
    Increase in bank indebtedness                     1,732,679      1,432,461
    Increase in accounts payable and accrued          1,050,985        534,176
     liabilities
                                                  -------------    -----------

   Net cash provided by operating activities            590,669        633,324
                                                  -------------    -----------

FINANCING ACTIVITIES
   Treasury shares acquired                            (215,317)       (36,466)
   Capital stock issued                                  11,043         52,119
                                                  -------------    -----------
   Net cash provided by (used for) financing           (204,274)        15,653
    activities
                                                  -------------    -----------
INVESTING ACTIVITIES
   Deposits                                                   -            600
   Purchase of capital assets                           (59,631)       (51,125)
                                                  -------------    -----------

   Net cash used for investing activities               (59,631)       (50,525)
                                                  -------------    -----------

Increase in cash and cash equivalents                   326,764        598,452

Cash and cash equivalents, beginning of period           52,929        195,678
                                                  -------------    -----------

Cash and cash equivalents, end of period            $   379,693        794,130
==============================================================================

Supplemental disclosure with respect to cash flows (Note 12)

     The  accompanying  notes  are  and  integral  part  of  these  consolidated
financial statements.

<PAGE>
JEWETT-CAMERON TRADING COMPANY  LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Expressed in U.S. Dollars)
(Unaudited - See Notice to reader)
<TABLE>
<CAPTION>
                                                                             Employee Stock
                                  Common Stock         Treasury Shares    Ownership Plan Shares
                                  ------------         ---------------    ---------------------
                                                                                                 Additional
                                 Number                 Number                Number               Paid-In     Retained
                               Of Shares    Amount    Of Shares   Amount    Of Shares    Amount    Capital     Earnings     Total
                               ---------  ----------  ---------  ---------  ---------  ---------  ---------  ---------- ----------
<S>                            <C>        <C>            <C>     <C>              <C>  <C>        <C>        <C>        <C>
Balance, August 31, 1997       1,237,362  $2,029,527     76,400  $ 290,997        333  $  16,667  $ 613,892  $3,346,549 $5,682,304

Net income for the year               -           -          -          -          -          -          -      102,134    102,134
Stock options exercised           24,000      69,585         -          -          -          -          -           -      69,585
Shares cancelled                 (84,600)   (138,744)        -          -          -          -          -           -    (138,744)
Treasury shares acquired              -           -      28,800    154,096         -          -          -           -    (154,096)
Treasury shares cancelled             -           -     (84,600)  (327,463)        -          -          -           -     327,463
Employee plan shares released         -           -          -          -        (333)   (16,667)   (31,645)         -     (14,978)
Premium relating to
 cancellation of share capital        -           -          -          -          -          -          -     (157,019)  (157,019)
                               ---------  ----------  ---------  ---------  ---------  ---------  ---------  ---------- ----------
Balance, August 31, 1998       1,176,762  $1,960,368     20,600  $ 117,630         -    $     -   $ 582,247  $3,291,664 $5,716,649
----------------------------------------------------------------------------------------------------------------------------------

Balance, August 31, 1997       1,237,362  $2,029,527     76,400  $ 290,997        333   $ 16,667  $ 613,892  $3,346,549 $5,682,304

Net income for the year               -           -          -          -          -          -          -      364,093    364,093
Stock options exercised           12,000      35,452         -          -          -          -          -           -      35,452
Shares cancelled                 (84,600)   (138,744)        -          -          -          -          -           -    (138,744)
Treasury shares acquired              -           -       8,200     36,466         -          -          -           -     (36,466)
Treasury shares cancelled             -           -     (84,600)  (327,463)        -          -          -           -     327,463
Employee plan shares released         -           -          -          -        (333)   (16,667)   (31,645)         -     (14,978)
Premium relating to
 cancellation of share capital        -           -          -          -          -          -          -     (155,551)  (155,551)
                               ---------  ----------  ---------  ---------  ---------  ---------  ---------  ---------- ----------
Balance, May 31, 1998          1,164,762  $1,926,235         -   $      -          -   $      -   $ 582,247  $3,555,091 $6,063,573
----------------------------------------------------------------------------------------------------------------------------------


Balance, August 31, 1998       1,176,762  $1,960,368     20,600  $ 117,630         -   $      -   $ 582,247  $3,291,664 $5,716,649

Net income for the year               -           -          -          -          -          -          -      467,816    467,816
Stock options exercised            4,000      11,043         -          -          -          -          -           -      11,043
Shares cancelled                 (23,600)    (39,315)        -          -          -          -          -           -     (39,315)
Treasury shares acquired              -           -      42,600    215,317         -          -          -           -    (215,317)
Treasury shares cancelled             -           -     (23,600)  (134,354)        -          -          -           -     134,354
Employee plan shares released         -           -          -          -          -          -          -           -          -
Premium relating to
 cancellation of share capital        -           -          -          -          -          -          -      (95,039)   (95,039)
                               ---------  ----------  ---------  ---------  ---------  ---------  ---------  ---------- ----------
Balance, May 31, 1999          1,157,162  $1,932,096     39,600  $ 198,593         -   $      -   $ 582,247  $3,664,441 $5,980,191
----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>



<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
MAY 31, 1999
================================================================================

1.   NATURE OF OPERATIONS

     The Company was  incorporated  under the Company Act of British Columbia on
     July 8, 1987.

     The  Company and its  subsidiaries  operate as a  wholesaler  of lumber and
     other building  products,  as a distributor of industrial  tools,  and as a
     retailer of building materials.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Generally accepted accounting principles

     These  consolidated  financial  statements have been prepared in accordance
     with  generally  accepted  accounting  principles of Canada,  which are not
     materially different from generally accepted accounting principles utilized
     in the United States.

     Principles of consolidation

     These consolidated financial statements include the accounts of the Company
     and its wholly-owned  subsidiaries,  The Jewett-Cameron Lumber Corporation,
     MSI-Pro Co.,  and  Material  Supply  International  Inc.,  all of which are
     incorporated  under the laws of Oregon,  U.S.A.  and  Jewett-Cameron  South
     Pacific Ltd., which is incorporated under the laws of Tonga.

     Significant  inter-company  balances and transactions  have been eliminated
     upon consolidation.

     Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  required management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     Currency

     These  financial  statements as expressed in U.S.  dollars as the Company's
     operations are based predominantly in the United States.

     Cash and cash equivalents

     Cash and cash equivalents  include highly liquid  investments with original
     maturities of three months or less.

     Inventory

     Inventory is recorded at the lower of cost and net  realizable  value based
     on the average cost method.


<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
MAY 31, 1999
================================================================================


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd...)

     Capital assets and depreciation

     Capital  assets  are  recorded  at  cost  and  the  Company   provides  for
     depreciation over the estimated life of each asset on a straight-line basis
     over the following periods:

         Office equipment                                     5-7 years
         Warehouse equipment                                  2-10 years
         Automotive equipment                                 4 years
         Buildings                                            5-30 years


     Foreign exchange

     Financial  statements of the Company's foreign  subsidiaries are translated
     using the temporal  method whereby all monetary  assets and liabilities are
     translated at the rate of exchange at the balance sheet date.  Non-monetary
     assets and liabilities  are translated at exchange rates  prevailing at the
     transaction  date.  Income  and  expenses  are  translated  at rates  which
     approximate those in effect on transaction  dates. Gains and losses arising
     from  restatement of foreign  currency  monetary  assets and liabilities at
     each period end are included in earnings.


     Deferred financing charges

     Deferred  financing  charges are  amortized  to income over the term of the
     debt instrument to which they relate.


     Trademarks

     The Company  accounts for costs of acquiring its trademarks by capitalizing
     all costs of  acquisition.  These  costs will be  amortized  to income over
     periods ranging from five to fifteen years.


     Comparative figures

     Certain  comparative  figures  have been  reclassified  to conform with the
     presentation adopted for the current period.


     Financial instruments

     The Company's  financial  instruments consist of cash and cash equivalents,
     accounts  receivable,  deposits,  bank  indebtedness,  accounts payable and
     accrued  liabilities.  Unless otherwise  noted, it is management's  opinion
     that the Company is not exposed to significant interest, currency or credit
     risks  arising from these  financial  instruments.  The fair value of these
     financial  instruments  approximate their carrying values, unless otherwise
     noted.



<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
MAY 31, 1999
================================================================================

3.   CAPITAL ASSETS
     ===========================================================================
                                    May 31,          May 31,        August 3l,
                                       1999             1998              1998
     ---------------------------------------------------------------------------

     Office equipment           $   179,836      $   173,315       $   174,512
     Warehouse equipment            217,935          185,842           186,098
     Automotive equipment            59,009           58,956            59,009
     Building                     1,460,982        1,463,663         1,460,982
     Land                           367,362          344,892           344,892
                                -----------      -----------       -----------

                                  2,285,124        2,226,668         2,225,493

     Accumulated depreciation      (716,851)        (603,246)         (631,147)
                                -----------      -----------       -----------
     Net book value             $ 1,568,273      $ 1,623,422       $ 1,594,346
     ===========================================================================



4.   DEFERRED FINANCING CHARGES

     Deferred financing charges are comprised of legal, accounting,  commissions
     and  securities  filing fees which were  incurred with the placement of the
     convertible  debentures  referred  to in Note 8. These  deferred  financing
     charges  were  being  amortized  to  income  over the five year life of the
     debentures.

     All  remaining  debentures  were  redeemed  as of  June  30,  1998  and the
     remaining  balance  of  the  deferred   financing  charges  were  amortized
     accordingly.

     ===========================================================================
                                     May 31,          May 31,       August 3l,
                                        1999             1998             1998
     ---------------------------------------------------------------------------
     Deferred financing charges  $         -      $    17,903      $   268,610
     Accumulated amortization              -          (16,111)        (268,610)
                                 -----------      -----------      -----------

                                 $         -      $     1,792      $         -
     ===========================================================================


5.   DEFERRED INCOME TAXES

     Deferred income taxes of $203,200 (May 31, 1998 - $33,700;  August 31, 1998
     - $203,200) relate principally to timing differences between the accounting
     and tax treatment of income, expenses, reserves and depreciation.



<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
MAY 31,1999

================================================================================

6.   TRADEMARKS

     Trademark  costs are  comprised of  development  and legal fees incurred in
     establishing and maintaining  trademarks for the Company's industrial tools
     business.  The trademark  costs are being  amortized to income over periods
     ranging from five to fifteen years.


     ===========================================================================
                                     May 31,          May 31,       August 3l,
                                        1999             1998             1998
     ---------------------------------------------------------------------------


     Trademarks                  $   283,914      $   283,914     $    283,914
     Accumulated amortization       (111,228)         (81,916)         (89,327)
                                 -----------      -----------      -----------
                                 $   172,686      $   201,998          194,587
     ===========================================================================


7.   BANK INDEBTEDNESS

     ===========================================================================
                                     May 31,          May 31,       August 3l,
                                        1999             1998             1998
     ---------------------------------------------------------------------------
     Demand loan                 $ 2,500,000     $  3,950,542     $    767,321
     ===========================================================================
     The bank  indebtedness  is secured by an assignment of accounts  receivable
     and inventory.  Interest is calculated at rates ranging between 8.0625% and
     prime plus 0.625% per annum.


8.   CONVERTIBLE DEBENTURES

     On June 30,  1998,  the Company  redeemed  the  balance of its  outstanding
     debentures for $544,985, being the face value of the debentures.


9.   STOCK OPTIONS

     At May 31,  1999,  the  Company  had  incentive  stock  option  outstanding
     enabling the holders to purchase common shares of the Company as follows:

     ===========================================================================
                    Number
                   of Shares               Price            Expiry Date
     ---------------------------------------------------------------------------

                     4,000               Cdn  $  4.25       December 31, 1999
                    12,000               Cdn  $  4.25       December 31, 2000
                    70,000               Cdn  $  4.25       August 6, 2006
     ===========================================================================


<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
MAY 31, 1999
================================================================================

10.  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 31 of each
     year and who have at least  one  thousand  hours  with the  Company  in the
     twelve months  preceding that date. The Company makes annual  contributions
     to the ESOP,  at least  equal to the ESOP's debt  service.  The ESOP shares
     initially  were pledged as collateral  for its debt. As the debt is repaid,
     shares are released  from  collateral  and  allocated to active  employees,
     based on the proportion of debt service paid in the year.  Debt of the ESOP
     is recorded as debt of the Company and the shares pledged as collateral are
     reported  as  unearned  ESOP  shares in the  balance  sheet.  As shares are
     released from collateral, the Company reports compensation expense equal to
     the current market value of the shares,  and the shares become  outstanding
     for earnings per share computations. ESOP compensation expense was $Nil and
     $1,468 for the periods  ended May 31, 1999 and May 31, 1998,  respectively,
     and $1,468 for the year ended  August 31,  1998.  The ESOP shares as of May
     31, 1999 and 1998 and August 31, 1998 were as follows:

     ===========================================================================
                                              May 31,      May 31,    August 3l,
                                                 1999         1998          1998
     ---------------------------------------------------------------------------

     Allocated shares                          90,000       90,000        90,000

     Unreleased shares                              -            -             -

     Total ESOP shares                         90,000       90,000        90,000
   =============================================================================

     Fair market value of unreleased shares $       -    $       -     $       -
   =============================================================================

11.  CONTINGENT LIABILITIES AND COMMITMENTS

     a)  The Company  established an Employee Stock Ownership Plan,  whereby the
         employees  may earn up to 90,000  shares of the Company using a formula
         based on years of service.  The  establishment  of the plan resulted in
         the Company  forming a trust which acquired from the 90,000 shares at a
         deemed price of Cdn$5.00 per share. As at May 31, 1999, 90,000 of these
         shares were earned by the  employees  under this plan but remain in the
         trust (Note 10).

     b)  At May 31,  1999,  May 31,  1998 and August 31, 1998 the Company had an
         un-utilized line-of-credit of approximately $4,000,000,  $2,500,000 and
         $5,700,000, respectively.


<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
MAY 31, 1999

================================================================================

12.  SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

     ===========================================================================
                                              Nine Month     Nine Month
                                            period ended   period ended
                                                 May 31,        May 31,
                                                    1999           1998
     ---------------------------------------------------------------------------

     Cash paid for:
         Interest                            $  102,746     $  229,349
         Income taxes                           302,417        193,213
     ===========================================================================

     Significant  non-cash  transactions for the nine month period ended May 31,
     1999 are as follows:

        The Company cancelled 23,600 treasury shares,  repurchased at a price of
        $134,354  which had an  original  cost of  $39,315.  The  difference  of
        $95,039 between the original cost and purchase price was applied against
        retained  earnings as a premium  relating to the  cancellation  of share
        capital.

     Significant  non-cash  transactions for the nine month period ended May 31,
     1998 are as follows:

        The Company cancelled 84,600 treasury shares,  repurchased at a price of
        $327,463, which had an original cost of $138,744. The difference between
        the original cost and purchase price was applied to contributed  surplus
        in the amount of $31,645  and the  remaining  balance  of  $155,551  was
        applied  against  retained   earnings  as  a  premium  relating  to  the
        cancellation of share capital.

13.  SEGMENTED INFORMATION

     The  Company's  operations  are  classified  into  two  principle  industry
     segments: (sales of) building materials and (sales of) industrial tools.

     Sales of  building  materials  consists  of  wholesale  sales of lumber and
     building  materials  in the  United  States and  retail  sales of  building
     materials in Tonga.  Sales of industrial  tools consists of distribution of
     pneumatic air tools and industrial clamps in the United States.

     In  computing  income  from  operations  by industry  segment,  unallocable
     general and administrative  expenses have been excluded from each segments'
     pre-tax  operating  earnings before interest expense and have been included
     in general corporate and other operations.



                                  - continued -


<PAGE>
JEWETT-CAMERON TRADING COMPANY LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
(Unaudited - See Notice to Reader)
MAY 31, 1999


================================================================================

13.  SEGMENTED INFORMATION (cont'd...)

     Following is a summary of segmented  information for the nine month periods
     ended May 31, 1999 and 1998 and the year ended August 31, 1998:

     ===========================================================================
                                           May 31,        May 31,     August 3l,
                                              1999           1998           1998
     ---------------------------------------------------------------------------

     Sales to unaffiliated customers:
       Building Materials:
         United States               $ 17,802,645   $ 17,189,841   $ 24,126,934
         South Pacific                    248,575        683,246        831,405
       Industrial tools                   824,621        960,050      1,220,175
                                     ------------   ------------   ------------
                                     $ 18,875,841   $ 18,833,137   $ 26,178,514
                                     ==========================================

     Income from operations:
       Building Materials:
         United States               $  1,052,861   $    711,535   $    696,556
         South Pacific                    (84,853)         5,735        (44,870)
       Industrial tools                    80,825        142,072        180,803
       General corporate                  (96,350)       (70,004)      (104,351)
                                     ------------   ------------   ------------
                                     $    952,483   $    789,338   $    728,138
                                     ==========================================

     Identifiable Assets:
       Building Materials:
         United States               $  9,517,339   $ 10,545,897   $  6,200,166
         South Pacific                    615,543        920,679        770,225
       Industrial tools                   123,376        149,883        125,132
       General corporate                   11,181        136,998        124,710
                                     ------------   ------------   ------------
                                     $ 10,267,439   $ 11,753,457   $  7,220,233
                                     ==========================================

     Depreciation and amortization:
       Building Materials:
         United States               $   100,217    $    112,967   $    148,183
         South Pacific                     6,033          15,109         14,634
       Industrial tools                    1,355           1,112          1,683
                                     ------------   ------------   ------------
                                     $   107,605    $    129,188   $    164,500
                                     ==========================================

     Capital expenditures:
     Building Materials:
         United States               $    57,358    $     22,176   $     24,948
         South Pacific                     2,273          28,949         36,710
                                     ------------   ------------   ------------
                                     $    59,631    $     51,125   $     61,658
===============================================================================