Prime Minister Mark Carney unveiled a set of fresh initiatives to support Canada’s steel and lumber sectors, which have been severely impacted by U.S. tariffs. The measures include financial aid and bolstering the Canadian market against foreign goods. The federal government, as per a statement from Carney’s office, will clamp down on steel imports from countries with or without free trade agreements with Canada.
For nations lacking a free trade agreement, Canada will reduce tariff rate quotas for steel products from 50% to 20% of 2024 levels. This move aims to limit the quantity of steel imported at lower duty rates. Carney, speaking at a news conference, highlighted the potential for over $850 million in additional domestic demand for Canadian steel.
In contrast, for countries with a free trade agreement with Canada, excluding the U.S. and Mexico, their quotas for steel products will be reduced from 100% to 75% of 2024 levels. The government’s approach of tightening quotas rather than imposing a flat tariff is intended to facilitate a smooth transition for Canadian companies away from foreign steel while ensuring some supply continuity.
Moreover, the federal government will terminate the temporary remission of Canadian tariffs on steel imports for manufacturing, food packaging, and agricultural use effective January 31, 2026. Catherine Cobden, President and CEO of the Canadian Steel Producers Association, expressed optimism about the new measures, emphasizing the potential for the domestic industry to regain lost ground.
In parallel, provinces like British Columbia and New Brunswick have been advocating for enhanced support for their softwood lumber industries amid challenges posed by the 45% tariffs imposed by U.S. President Donald Trump. Responding to these concerns, Canada will allocate $500 million in funding through the large enterprise tariff loan facility to assist lumber firms facing liquidity challenges. Additionally, $500 million will be provided to the Business Development Bank of Canada’s softwood lumber guarantee program.
The federal government is also urging railway companies to slash freight rates by 50% for transporting Canadian steel and lumber interprovincially starting in the spring. This initiative involves allocating funds to Canadian National Railway and Canadian Pacific Kansas City, with an estimated cost of about $146 million for a year. Derek Nighbor, President and CEO of the Forest Products Association of Canada, commended the government’s actions and stressed the importance of timely execution to address industry needs effectively.
Recent trade tensions between the U.S. and Canada have significantly impacted the steel and aluminum sectors. Following tariff escalations by President Trump, trade discussions have been halted, further complicating the situation. Despite attempts to resolve the disputes, talks with the U.S. remain stalled, as confirmed by Carney in recent statements.