The federal government will cut interprovincial freight rates for Canadian steel and lumber by 50 per cent and require major contracts to prioritize domestic materials under measures announced this week to support industries affected by U.S. tariffs.
Treasury Board President Shafqat Ali visited Brannon Steel in Brampton on Dec. 5 to outline the new policies. The measures aim to protect workers and help businesses adapt as trade relationships shift, according to the government.
Procurement changes
Federal contracts worth more than $25 million must prioritize Canadian materials including steel and lumber under a Buy Canadian Policy set to take effect later this year. The requirement will also apply to federal grants and contribution programs.
Build Canada Homes, a new federal homebuilding agency with roughly $700 million in funding for next year, will prioritize projects that can begin within 12 months and use Canadian wood products. The agency expects to create $70 million to $140 million in new demand for Canadian wood products.
Import restrictions
The government will tighten tariff rate quotas on steel imports from countries without free trade agreements with Canada, reducing them from 50 per cent to 20 per cent of 2024 levels. For non-CUSMA partners with free trade agreements, quotas will drop from 100 per cent to 75 per cent of 2024 levels.
A 25 per cent tariff will apply to imported steel-derivative products including wind towers, prefabricated buildings, fasteners and wires. Temporary remissions of Canadian tariffs on imported steel used in manufacturing, food and beverage packaging, and agricultural production will end Jan. 31, 2026.
The government said the measures will unlock more than $1 billion in new domestic demand for Canadian steel.
Worker support
More than $100 million over two years will support employers with active Work-Sharing agreements who commit to training employees working reduced hours. The measure could help up to 26,000 workers in sectors including steel and lumber through increased income replacement, according to the government.
The Business Development Bank of Canada Softwood Lumber Guarantee Program will receive an additional $500 million. Another $500 million has been earmarked for the Large Enterprise Tariff Loan facility to support softwood lumber firms facing liquidity pressures.
A single-window application system will help forestry sector companies navigate federal support programs. The government will also launch a Canadian Forest Sector Transformation Task Force to examine long-term competitiveness and gather input from provinces, territories and industry.
Previous support
The government received nearly 1,500 applications through the Regional Tariff Response Initiative from companies in steel, aluminum, lumber, manufacturing, automotive and seafood sectors. More than 230 steel sector firms applied for support.
The investments have provided relief to nearly 37,000 Canadians and prevented more than 14,000 job losses, according to the government. Employment has rebounded with 120,000 jobs created since March following early impacts of trade disruptions.
“I know far too well how much our steel industry is important for this region, for Ontario and for Canada, and these new measures will help protect and transform Canada’s steel, as well as lumber industries,” said Ali.
