Prime Minister Mark Carney has unveiled a series of new initiatives to support Canada’s steel and lumber industries, which have been severely impacted by U.S. tariffs. The measures include financial aid and stricter regulations on foreign products entering the Canadian market.
In a statement from Carney’s office, the government is cracking down on steel imports from countries with and without free trade agreements with Canada. For nations without such agreements, Canada is reducing the tariff rate quotas for steel products to 20% of 2024 levels from the previous 50%. This move aims to limit the amount of imported steel subject to lower tariff rates.
During a press conference, Carney mentioned that the new measures could create over $850 million in domestic demand for Canadian steel. For countries with free trade agreements, excluding the U.S. and Mexico, their quotas for steel products will be reduced to 75% of 2024 levels.
The government also announced the discontinuation of temporary tariff remissions on steel imports used in manufacturing, food and beverage packaging, and agricultural production starting from January 31, 2026.
Catherine Cobden, the President, and CEO of the Canadian Steel Producers Association, expressed optimism about the measures, stating that they provide the industry with a competitive edge in the ongoing trade dispute with the United States.
In addition to the support for the steel sector, the government will allocate $500 million to assist lumber firms facing financial strains. This funding will be channeled through the large enterprise tariff loan facility. Furthermore, $500 million will be allocated to the Business Development Bank of Canada’s softwood lumber guarantee program.
To facilitate the transportation of steel and lumber within Canada, the government is urging railway companies to slash freight rates by 50% starting in the spring. The government plans to provide funding to Canadian National Railway and Canadian Pacific Kansas City to achieve this objective, with an estimated cost of approximately $146 million for one year.
Derek Nighbor, the President, and CEO of the Forest Products Association of Canada, welcomed the government’s announcement, emphasizing the importance of efficient program implementation to address the urgent industry needs.
The steel and aluminum sectors in Canada have been embroiled in trade tensions with the U.S. Trump initially imposed 25% tariffs on Canadian steel and aluminum, which were later doubled to 50%. Despite recent developments, trade talks with the U.S. remain stalled, with Carney acknowledging challenges in the negotiations.