Prime Minister Mark Carney has unveiled a series of new initiatives to assist Canada’s steel and lumber sectors, which have been adversely affected by U.S. tariffs. The measures include financial aid and stricter regulations on foreign products entering the Canadian market.
As per a statement from Carney’s office, the government is targeting foreign steel imports from nations with and without free trade agreements with Canada. For countries lacking such agreements, Canada is reducing tariff rate quotas for steel products from 50% to 20% of 2024 levels.
A tariff-rate quota sets a maximum limit on the quantity of a product that can be imported at a lower duty. Essentially, countries without a free trade agreement will now face restrictions on the amount of steel they can import at reduced tariff rates.
Carney mentioned during a news briefing that these actions could potentially generate over $850 million in domestic demand for Canadian steel. Additionally, for countries with free trade agreements, excluding the U.S. and Mexico, their quotas for steel products will be decreased from 100% to 75% of 2024 levels.
During a technical briefing preceding the announcement, a government official emphasized that tightening quotas instead of imposing a flat tariff aids Canadian companies in transitioning away from foreign steel while ensuring some supply continues.
Moreover, the government will discontinue the temporary remission of Canadian tariffs on steel imported for manufacturing, food and beverage packaging, and agricultural use by January 31, 2026. Catherine Cobden, the President and CEO of the Canadian Steel Producers Association, expressed that these measures provide the industry with a fighting chance in the trade conflict with the U.S., emphasizing the potential for Canadian workers and businesses to adapt to the evolving global scenario.
In response to the ongoing challenges faced by the softwood lumber industry, the federal government is allocating $500 million through the large enterprise tariff loan facility to support lumber companies encountering financial strains. An additional $500 million will be directed to the Business Development Bank of Canada’s softwood lumber guarantee program, with a streamlined application process for support programs.
The government is also urging railway companies to slash freight rates for transporting Canadian steel and lumber between provinces by 50%, starting in the spring. Carney detailed that this objective will be achieved by providing funding to Canadian National Railway and Canadian Pacific Kansas City, with an estimated cost of approximately $146 million for one year.
Derek Nighbor, President and CEO of the Forest Products Association of Canada, commended the announcement and stressed the importance of timely implementation to address the pressing issues faced by the industry.
The steel and aluminum sectors in Canada have been significantly impacted by trade tensions between Washington and Ottawa. President Trump initially imposed 25% tariffs on Canadian steel and aluminum in March, subsequently doubling them to 50% in June. Recently, Trump terminated all trade discussions with Canada following a dispute over an anti-tariff advertisement from the Ontario government that referenced Ronald Reagan’s statements.
Despite attempts at reconciliation, talks with the U.S. have yet to be resumed, as confirmed by Carney in a recent statement to reporters.
