Prime Minister Carney Unveils Comprehensive Plan to Safeguard and Transform Canada’s Steel and Lumber Sectors

OTTAWA (Rajeev Sharma): Prime Minister Mark Carney announced far-reaching measures to protect and strengthen Canada’s steel and softwood lumber industries amidst intensifying global trade instability, particularly in light of significant shifts in U.S. trade policy. The government positioned these initiatives as crucial steps toward reducing Canada’s reliance on a single trade partner and building a more resilient, self-sufficient economy.

The new strategy imposes stricter restrictions on foreign steel imports, substantially lowering tariff rate quota levels for countries without free trade agreements with Canada and for non-CUSMA free trade partners. A new global tariff of 25 per cent will be levied on several steel-derivative products, including wind towers, prefabricated buildings, fasteners, and wires. The Canada Border Services Agency will receive expanded resources, including a dedicated compliance team, enhanced tools to detect false declarations, and an upgraded online reporting platform. Temporary tariff remissions on imported steel used in manufacturing, packaging, and agricultural production will expire on January 31, 2026. The government estimates these measures will generate over $1 billion in new domestic demand for Canadian steel.

To encourage the use of Canadian steel and lumber in construction, the federal government will partner with rail companies to reduce interprovincial freight rates for these materials by half starting in spring 2026. Build Canada Homes, the new federal housing agency, will prioritize large, shovel-ready housing projects that rely on Canadian wood products. With a projected budget of approximately $700 million next year, the agency expects to create up to $140 million in additional demand for Canadian lumber while attracting private and provincial investment to scale up production. Later this year, the government will introduce a Buy Canadian Policy requiring all federal contracts over $25 million and federal grants and contributions programs to favour Canadian-made materials.

Support for workers and businesses will also expand significantly. More than $100 million over two years will be allocated to enhance income replacement for workers participating in Work-Sharing agreements, benefiting up to 26,000 employees, including many in steel and lumber. The Business Development Bank of Canada’s Softwood Lumber Guarantee Program will receive an additional $500 million to offer financing and credit support to companies restructuring their operations. Another $500 million will be available through the Large Enterprise Tariff Loan facility to assist lumber firms facing liquidity challenges. To facilitate access to federal assistance, the government will establish a single-window application system for forestry sector programs and launch a Canadian Forest Sector Transformation Task Force to develop long-term strategies for competitiveness.

Prime Minister Carney emphasized that these measures mark a decisive shift from ‘reliance to resilience,’ positioning Canadian producers and workers to thrive in a rapidly changing global economy.