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 steel import quotas for countries that do not have a free trade agreement with Canada from 50 per cent to 20 per cent of last year’s levels.
Meanwhile, countries outside the United States and Mexico that do have trade pacts with Canada will also see their quotas dropped from 100 per cent to 75 per cent of last year’s levels.
“This will open up more than $850 million in new domestic demand for Canadian steel,” Carney said.
Any steel imported above those thresholds will be hit with a surtax of 50 per cent.
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.”
Get daily National news
In July, Carney reduced the quota for imports from countries without free trade agreements to 50 per cent of 2024 levels.
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.
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 said.
The prime minister also 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.”
When asked if Canada’s new duties could hamper the chances of a free trade agreement with the United States, Carney said the U.S. and Mexico are “not included” in the list of trading partners that would be affected.
He added that Canada’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.
Conservative Leader Pierre Poilievre said Wednesday that Carney was spending “billions more” to bail himself out of broken promises to negotiate a deal with Trump.
Poilievre said Conservatives “want to negotiate a hard bargain to protect them and get them re-entry into the American market, tariff-free.” He also repeated calls to remove the industrial carbon price to offer relief to affected sectors.
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.
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 re-engage on those talks when the United States wants to re-engage,” he said.
Canadian Steel Producers Association president and CEO Catherine Cobden broadly welcomed the measures announced Wednesday, particularly the efforts to crack down on dumping.
“By further tightening and broadening border measures, providing support for workers and lowering freight rail rates, Canada is serious about protecting its domestic industry from the ongoing overcapacity crisis and that the country is prepared to take action to protect our market,” she said in a media statement.
Industry Minister Melanie Joly told reporters in a callback from Tokyo earlier Wednesday that Canada will continue to engage with trading partners, including China, while “defending our national interest.”
She said she’s hearing from allies in the European Union and South Korea that they’re also moving to protect their domestic steel sectors.
“The internal market can actually be a market that is profitable for our steel sector, as long as they’re able to have access to the market without any form of dumping from any other countries that are creating, manufacturing, producing steel,” she said.
–with files from Mackenzie Gray and The Canadian Press
Comments