The Canadian government has unveiled comprehensive new measures designed to strengthen the nation's steel and softwood lumber industries amid ongoing trade tensions with the United States. Prime Minister Mark Carney announced the strategic initiative on Wednesday, emphasizing the need to reduce dependency on American markets and protect key economic sectors.
Addressing Economic Vulnerabilities
Speaking to reporters in the House of Commons foyer, Carney outlined the urgent need for economic transformation. The Prime Minister revealed that U.S. tariffs and related uncertainties are projected to cost Canada approximately 1.8% of GDP, representing a staggering $50 billion economic loss equivalent to $1,300 for every Canadian citizen.
"We know the world's changing, we know that this decades-long process of our ever-closer economic relationship between Canada and the United States has ended, and a consequence of that many of our strengths have become vulnerabilities," Carney stated during the announcement.
New Import Restrictions and Tariffs
The government will implement several key measures to protect domestic industries. For steel imports, Canada will tighten tariff rate quota levels significantly. Imports from non-agreement nations will see quota levels reduced from 50% to just 20% of 2024 levels, while nations with existing trade agreements will face reduced quotas from 100% to 75% of previous levels.
Additionally, Canada will impose a 25% global tariff on various imported steel products and structures, including wire, fasteners, pre-fabricated buildings, and wind turbines. The Canada Border Services Agency will establish a dedicated compliance team specifically tasked with investigating and addressing steel import dumping practices.
Transportation and Industry Support
To enhance domestic competitiveness, the government will collaborate with railway companies to reduce interprovincial shipping costs by half, making Canadian steel and lumber more affordable for domestic markets. Federal agencies will also prioritize "buy Canadian" procurement strategies, particularly for large-scale Build Canada Homes projects that utilize Canadian wood products.
The initiative includes establishing a Canadian Forest Sector Transformation Task Force, which will collect crucial data and research to ensure the long-term competitiveness of Canada's softwood lumber industry. These measures, outlined in Budget 2025, are expected to increase Canada's GDP by 3.5%—more than double the economic impact of current U.S. trade policies.
The announcement comes as Canada faces unprecedented trade challenges, with 90% of Canadian lumber, steel, and aluminum exports currently going to the United States. The government's comprehensive approach aims to diversify markets and strengthen domestic production capabilities while navigating the changing global trade landscape.
