Prime Minister Mark Carney announced $1.25 billion in new measures Monday to help Canada’s softwood lumber industry cope with doubled U.S. duties and transform for long-term competitiveness.
The package includes $700 million in loan guarantees, $500 million for product diversification, and $50 million for worker training programs affecting more than 6,000 employees.
Government responds to trade pressure
The announcement in West Kelowna, B.C., comes 11 days after the U.S. Department of Commerce doubled duties on Canadian softwood lumber products July 25, with further increases expected this month.
“The forest sector is a pillar of Canada’s economy. As we shift from reliance to resilience, Canada’s new government will ensure the industry can transform to seize new opportunities in Canadian and international markets,” said Carney.
The measures form part of what the government calls a comprehensive industrial strategy to invest in domestic production and help industries find new trading partners.
Loan guarantees address immediate needs
The $700 million in loan guarantees will help companies maintain and restructure operations during the transition period. Finance Minister François-Philippe Champagne said the sector supports nearly 200,000 jobs and contributes billions to Canada’s GDP and exports annually.
The $500 million diversification investment will increase domestic processing and value-added production. It includes initiatives supporting Indigenous-led forestry business development.
Build Canadian priority
The government will change federal procurement rules to require contractors to source Canadian lumber for government projects. The policy extends to major infrastructure projects and the government’s plan to build nearly 500,000 new homes annually over the next decade.
A planned program called Build Canada Homes will provide financing to private home builders using Canadian technologies and resources like mass timber and softwood lumber.
Industry Minister Mélanie Joly said the measures show “steadfast commitment to supporting the Canadian economy and the workers who keep it strong.”
Worker support programs
The $50 million worker support program will provide upskilling, reskilling and income supports through Labour Market Development Agreements. The funding builds on temporary Employment Insurance program enhancements.
“By strengthening what we have here at home and standing up for Canada, we’re making sure our country stays strong, competitive, and ready to lead,” said Jobs Minister Patty Hajdu.
Industry background
Canada’s softwood lumber industry was valued at $10 billion in 2020, with nearly 70 per cent of production exported. The U.S. imported over 50 per cent of Canada’s softwood lumber production that year.
In 2024, 66 per cent of Canada’s total softwood lumber production was exported, with nearly 90 per cent going to the U.S.
The industry directly employed about 28,000 Canadians in 2020, representing about 15 per cent of Canada’s forest sector employment.
Trade dispute continues
The current duties continue a long-running trade dispute. Canadian softwood lumber exports to the U.S. have faced countervailing and anti-dumping duties since May 2017, after a 2006 agreement expired in October 2015.
Canada continues to challenge U.S. actions under dispute resolution provisions of the Canada-United States-Mexico Agreement and other international forums.
The government expects doubled homebuilding pace alone will double Canadian softwood lumber use in residential construction, increasing demand by almost 2 billion board feet.
