ottawa Announces $745M+ Package to Shield Canadian Steel and Lumber Industries from U.S. tariffs
OTTAWA – The Canadian federal government unveiled a extensive support package Wednesday exceeding $745 million aimed at bolstering its steel and lumber industries in response to escalating American customs tariffs. The measures include significant transportation subsidies, a “Buy Canadian” procurement policy, and increased financial aid for affected workers and businesses.
The proclamation comes after Washington imposed a 10% tariff on lumber imports in September, alongside existing 25% tariffs on kitchen cabinets, vanities, and othre upholstered wood products. A government official stated, “we need to do even more” to strengthen the local market.
Central to the plan is a new transportation subsidy set to begin in spring 2026, which will cover 50% of the cost of transporting steel and lumber between canadian provinces, as well as a 50% reduction in rail transport rates. Officials estimate this initiative alone will cost Ottawa more than $146 million.
Further bolstering domestic demand, the government will implement a “Buy Canadian” policy later this year, mandating that all defense and construction contracts exceeding $25 million prioritize Canadian materials, including steel and lumber. This requirement will also extend to all federal grants and contributions.
Financial support for impacted businesses will also be expanded through a $500 million increase to the Business Progress Bank of Canada’s (BDC) Softwood Lumber Guarantee program, bringing the total contribution to $1.2 billion in the form of term loans and letters of credit.
The package represents a significant investment in Canada’s forestry and steel sectors, key contributors to the national economy, as the country navigates ongoing trade tensions with the United States.
