The federal government is offering $500 million in loan guarantees to Canada’s softwood lumber industry and placing limits on imported foreign steel as the two sectors reel from U.S. President Donald Trump’s tariffs, Prime Minister Mark Carney said Wednesday.
Ottawa is cutting back on steel imports from countries that do not have a free trade agreement with Canada from 50 per cent to 20 per cent of last year’s levels.
“This will open up more than $850 million in new domestic demand for Canadian steel,” Carney said.
Carney said the loan guarantee for softwood lumber will “ensure that companies have the financing and the credit support that they need to maintain and restructure their operations during this period of transformation.”
Carney announced a new “Canadian Forest Sector Transformation Task Force” that will seek recommendations from provinces, territories and the lumber industry on “how to seize new opportunities in softwood lumber and create new growth in the sector,” he said.
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Canada will reduce tariff free steel imports from non-CUSMA free trade area partners from 100 per cent of 2024 levels to 75 per cent, he added.
Carney confirmed that he is travelling to the United States next week and will meet with Trump but did not say whether he intends to restart the stalled trade talks.
“We are ready to reengage on those talks when the United States wants to reengage,” he said.
Canada will also impose “a global 25 per cent tariff on targeted imported steel derivative products, such as wind towers, prefabricated buildings, fasteners and wires to grow demand for Canadian made steel.”
In July, Carney reduced the quota for imports from countries without free trade agreements to 50 per cent of 2024 levels and levied a 50 per cent tariff on any imports above the quota.
Ottawa is also cutting freight rates for transporting Canadian steel across provinces by 50 per cent.
“We’ll do that through funding directly Canadian National and Canadian Pacific Kansas City Railways,” Carney said.
When asked if Canada’s new duties could hamper the chances of a free trade agreement with the U.S., Carney said the U.S. and Mexico are “not included” in the list of trading partners that would be affected.
He added that Canda’s curbs on steel derivative imports are not as broad as those imposed by the U.S.
The moves come as the steel industry continues to be hammered after Trump levied 50 per cent tariffs on Canadian steel in June.
Softwood lumber, which has long been subjected to U.S. tariffs, is currently taxed at 45 per cent after the Trump administration’s hike last month.
Trump cut off trade talks with Canada last month after the Ontario government ran television ads in U.S. markets using 1987 remarks from former U.S. president Ronald Reagan to highlight the downside of tariffs.
–with files from Canadian Press