The federal government plans to inject $500 million in loan guarantees for Canada's softwood lumber industry and further limit foreign steel imports to support the sectors being hammered by U.S. tariffs.
A government official not authorized to speak about the plan before details are made public told The Canadian Press that Prime Minister Mark Carney will announce the new measures Wednesday afternoon.
The Toronto Star was the first to report on the details of the aid package.
The official said the government plans to cut steel imports from countries where Canada does not have a free-trade agreement from 50 per cent to 20 per cent of 2024 levels. That move aims to allow Canadian steel producers to fill the gap in the domestic market, opening up an estimated $854 million in domestic demand.
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.
Imports from countries with a free-trade agreement are also expected to be cut, though it’s not clear yet by exactly how much. In July, the government applied a 50 per cent tariff on those countries, except the U.S., for any steel brought in that was above what was imported in 2024.
The government also plans to work with CN Rail to cut freight rates by 50 per cent when shipping steel and lumber interprovincially. If CN can’t oblige a lower rate, Ottawa will subsidize the difference, the official said.
It’s unclear if the same measures and subsidy will be applied to steel bound for the North, where construction materials are either shipped on sealift boats to Nunavut communities during open-water season, and trucked into the N.W.T. and the Yukon.
The moves come as the steel industry continues to be hammered after U.S. President Donald 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.
Picture Courtesy: THE CANADIAN PRESS/Adrian Wyld
