Ottawa Strengthens Steel Protection, Invests in Lumber Mills
Ottawa is enhancing its support for both the steel and lumber industries in light of increasing U.S. protectionism. Prime Minister Mark Carney recently announced measures aimed at increasing domestic demand and safeguarding Canadian jobs.
Strengthening Steel Protection
The federal government is tightening import regulations for steel. Starting next month, Canada will implement new tariff-rate quotas (TRQs). For countries without a free-trade agreement with Canada, the quota will be reduced to 20% of 2024 levels. Meanwhile, countries with such agreements will face a quota set at 75% of 2024 levels. Notably, these TRQs do not apply to the U.S. or Mexico, where Canada maintains a separate 25% tariff on imports.
- New TRQs set to reduce steel imports
- Quotas lessened for non-trade agreement countries
- U.S. steel imports still subject to 25% tariff
The Canadian steel industry has been under pressure, as exports to the U.S. have decreased significantly due to tariffs imposed by former President Trump. In response to the industry’s requests, the government aims to foster local demand by limiting foreign competition.
Investment in Lumber Mills
In addition to steel, the Canadian government is investing in the lumber sector. Prime Minister Carney announced a new initiative providing $500 million in loan guarantees to support Canadian softwood lumber producers. This follows an earlier commitment of $700 million made in August for similar purposes.
- Investment totals $1.2 billion including previous funding
- Loans aim to assist mills struggling under U.S. tariffs
U.S. import taxes on most Canadian softwood lumber producers have surpassed 45%, impacting their ability to access the U.S. market. The new funds are intended to help mills remain operational and consider alternatives for new markets.
Logistical Support for Transportation
Part of the plan includes subsidies covering up to 50% of the cost to transport steel and lumber across Canada by rail. This decision aims to reduce transportation costs for domestic buyers, especially as criticisms have been raised about the higher expenses of shipping steel from Ontario compared to imports arriving by ship.
Support for Affected Workers
Additionally, to address job losses in affected industries, the government is allocating an extra $100 million over the next two years for a work-sharing program. This initiative allows companies to reduce employee hours while utilizing unemployment insurance to compensate for lost wages.
Conclusion
These combined efforts from Ottawa reflect a commitment to bolster Canada’s steel and lumber industries amid challenging international trade dynamics. With the introduction of tighter quotas and financial support, the government aims to protect domestic producers and workers from the increasing pressures of global trade tariffs.
