Carney announces new supports for Canada’s lumber, steel sectors

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PM Carney announces new measures to protect steel, lumber industries

Will new supports from Ottawa for lumber and steel be enough amid U.S. tariffs?

OTTAWA — Amid the ongoing trade war with the United States, Prime Minister Mark Carney has announced a slate of new measures to help and protect the steel and lumber industries.

Among the new measures is further limiting foreign steel imports from countries without a free trade agreement with Canada — from 50 to 20 per cent of 2024 levels — a measure largely aimed at reducing Chinese steel imports.

The government will also reduce quotas for countries with which Canada has a free trade agreement – excluding the U.S. and Mexico – going from 100 per cent to 75 per cent of 2024 levels, and impose a global 25 per cent tariff on targeted imported products made from steel.

Carney made the announcement in Ottawa on Wednesday, as trade talks with the U.S. remain stalled after the fallout over Ontario’s anti-tariff ad last month.

“We know that this decades long process of our ever-closer economic relationship between Canada and the United States has ended, and as a consequence of that, many of our strengths have become our vulnerabilities, particularly in those industries that are most tightly integrated with the United States,” Carney said while speaking to reporters from Parliament Hill.

The federal government will also cut freight rates to ship steel and lumber across Canada by 50 per cent, starting next spring.

Speaking to reporters earlier on Wednesday, government of Canada officials said the estimated fiscal cost of the measure is $146 million, based on previous costs.

Other measures announced included implementing the Buy Canadian Policy later this year, which requires defence and construction contracts to prioritize Canadian materials, including steel and aluminum, along with a $500-million increase to the previously announced Softwood Lumber Development Program, which gives companies access to government-backed loans, totalling $1.2 billion.

The federal government did not announce any new measures for the aluminum industry.

In June, the U.S. increased its tariffs on steel and aluminum imports to 50 per cent, and in October, slapped an additional 10 per cent tariff on softwood lumber, increasing those levies from 35 to 45 per cent. There are also 25 per cent tariffs on some furniture and kitchen cabinet products.

Canada, meanwhile, has 25 per cent counter-tariffs in place on steel and aluminum products originating from the United States.

Is a sectoral deal still in the works?

Canada had already reduced quotas on foreign steel imports from non-free trade countries in July, from 100 per cent to 50 per cent, and has imposed a 25 per cent surtax on steel and aluminum goods that originate from China, with the latter being Canada’s second-largest source of steel imports.

When asked if he is concerned about potential retaliation from China – particularly at a moment when Canada and China are working to recalibrate the relationship – Carney said ongoing conversations with China “will continue.”

“We’ve reengaged with China, and in a very positive way, and starting of a broader discussion of, amongst other things, our broader trading relationship,” he said.

Wednesday’s announcement also comes one month after Carney told reporters that Canada “had been making progress” on affected sectors like steel and aluminum until U.S. President Donald Trump suddenly ended negotiations with Canada over Ontario’s ad.

Government sources have also previously told CTV News that Canadian officials were hopeful there could be movement on a steel and aluminum deal by the Asia-Pacific Economic Cooperation summit in South Korea at the end of October.

Asked whether Wednesday’s new measures should be interpreted as a concession that there is no deal in the near future, Carney did not answer directly.

“You should interpret the announcement of this government will do whatever it takes to protect our sectors,” he said. “And not just protect them, but to help them reposition for the new global economy.”

Carney, who campaigned during the federal election of standing up to Trump, previously missed a self-imposed deadline to reach a deal with the U.S. by July 21.

Conservative Leader Pierre Poilievre criticized the prime minister for his “broken promises.”

“Conservatives believe in our workers. We want to protect steel, aluminum, lumber and other sectors. We want to negotiate a hard bargain to protect them and get them re-entry into the American market tariff-free,” Poilievre said Wednesday.

Carney heading to Washington next week

While speaking to reporters, Carney confirmed that he spoke to Trump on Tuesday and that he is going to Washington on Dec. 5 to attend the FIFA World Cup draw, where he could cross paths with the U.S. president.

When pressed on whether he will talk to Trump about reengaging in negotiations, Carney said, “I’ll bring up with him what I bring up with him when I see him.”

“These are points I do make to him. My exchange with the President yesterday was not newsworthy,” he added.

Carney dodged questions on Sunday about the last time he spoke with Trump, saying “who cares?” when pressed at his closing press conference at the G20 summit in South Africa.

On Tuesday, though, Carney admitted that comment was a “mistake” and called it a “poor choice of words.”

Measures ‘absolutely essential’ survival

According to data released by Statistics Canada in October, exports dropped by 7.5 per cent in the second quarter of this year as tariffs on sectors like steel continue to hit the economy.

In his press conference, Carney said further limiting foreign steel imports from countries without a free trade agreement with Canada will open up more than $850 million “in new domestic demand for Canadian steel,” while reducing steel quotes from non-Canada-U.S.-Mexico Trade Agreement (CUSMA) countries will bring in $540 million “in additional market access.”

The federal government also announced it will end the temporary remission – or refunds – of Canadian tariffs on steel imports used in Canada for manufacturing, food and beverage packaging and agricultural production by the end of January 2026.

The temporary remissions were put in place to help Canadian businesses deal with the early impacts of tariffs, but Carney says they would “only hurt Canada’s steel sector” in the long term and prolong reliance on imports.

Catherine Cobden, president and CEO at the Canadian Steel Producers Association, says the new measures are “essential to help (the steel industry) survive.”

“We’re so relieved with the announcements made today that were pertaining to the steel sector, because they really will help us pivot in the moment,” Cobden said in an interview with CTV Power Play on Wednesday. “They will make an impactful change to the domestic market situation, taking a direct run at unfair trade.”

Cobden also added that she believes “further steps” will be needed.

“This is a very evolving situation. There is literally no certainty things change regularly, particularly in our relationship with the United States,” Cobden added.

B.C. Lumber Trade Council president Kurt Niquidet, meanwhile, said while he appreciates the new support measures, a negotiated settlement with the U.S. “still needs to be the priority.”

“We are looking to get a softwood lumber agreement with the U.S., and that is something we’ll continue to work with the federal government on,” Niquidet told CTV Power Play on Wednesday.