Canada Announces Economic Shifts to Protect Lumber, Steel Industries

OTTAWA, Canada — On November 26, Canada's Prime Minister Mark Carney announced new initiatives to protect the thousands (roughly 217,000) workers across the lumber and steel industries. Carney called for a transformation of the economy from one that is reliant on a single trade partner to one that is stronger, more self-sufficient, and resilient to global shocks.

In a press release, Carney addressed these two industries as the backbone of Canada's workforce. Canada is aiming to protect jobs, stabilize key industries, boost domestic demand for Canadian-made materials, and support workers through retraining so the economy is more resilient and less vulnerable to trade disruptions. Here is what was stated for the softwood lumber portion of the release: 

Canada’s forest sector is the backbone of nearly 300 communities, providing over 194,000 direct jobs – including 11,000 for Indigenous workers – and contributing more than $21 billion to GDP in 2024. The sector supports another 148,000 indirect jobs across the value chain, making it a critical piece of Canada’s economic engine.

The softwood lumber industry anchors this broader ecosystem. By-products from logging and milling sustain industries such as construction (e.g., mass timber, structural panels), energy (e.g., biofuels), and manufacturing (e.g., furniture, bioplastics, and biochemicals). The pulp and paper industry, which uses sawmill by-products, accounts for a quarter of forest sector employment.

Canada’s softwood lumber industry is also highly trade-exposed, particularly to the United States, where demand for lumber exceeds what domestic mills can supply. In 2024, $7.3 billion in softwood lumber was exported to the U.S., representing nearly 90% of Canadian softwood exports. As of October 2025, most exports face a combined 45.6% duty and tariff rate.

With the cost of production continuing to rise, many sawmills are forced to make difficult decisions. Since 2022, 22 mills have closed, and more than 50 have reduced operations – directly affecting over 5,600 workers.

Amid a quickly changing global trade landscape, the Government of Canada has taken the following steps to protect Canadian jobs and ensure the softwood lumber industry remains competitive:

Liquidity support:

• Providing $700 million in loan guarantees, through the BDC Softwood Lumber Guarantee Program, to address the immediate pressures facing the softwood lumber sector.
• Making available more flexible financing through the Large Enterprise Tariff Loan Facility (LETL).
• Providing $500 million to supercharge product and market diversification to make the industry more competitive for the long-term.
• Supporting trade-affected firms pivoting their operations, including Strategic Response Fund and the Regional Tariff Response Initiative.

• Introducing the Buy Canadian Policy.

  Implementing Workforce measures, including:

• A reskilling package to retrain workers.
• Workforce Alliances and Workforce Innovation Fund.

• Extra weeks of Employment Insurance for long-tenured workers and extension of some EI measures such as treatment of separation payments and waiver of the waiting period.

New measures to support Canada’s softwood lumber industry

In addition to the $700 million in loan guarantees announced for the Business Development Bank of Canada (BDC) Softwood Lumber Guarantee Program in August 2025, a top-up of $500 million will be delivered to sustain the program into 2026, ensuring companies have the financing and credit support they need to maintain and restructure their operations.

To ease near-term liquidity pressures, the Government will deploy a $500 million envelope from the Large Enterprise Tariff Loan Facility to provide targeted support for softwood lumber producers. Access will be simplified, and the program made more responsive, informed by industry feedback – including the removal of unnecessary disclosure requirements, a review of debt seniority, and more flexible eligibility criteria.

Build Canada Homes

Build Canada Homes will prioritize “shovel-ready” and large-scale multi-year projects that incorporate Canadian wood products and can begin within 12 months. This will create a near-term demand pull for companies to produce value-added wood building products and bring capital into the softwood lumber sector.

Buy Canadian Policy

Canada’s new government will implement a Buy Canadian Policy to prioritize Canadian materials in all contracts over $25 million. It will also apply to all Government of Canada Grants and Contributions programs, including federal infrastructure funding programs. The policy is focused on supply chains: while it does not require the contracted supplier to be Canadian, it does require Canadian steel, aluminum, and softwood lumber when the value exceeds $250,000.

Canadian Forest Sector Transformation Task Force

Canada’s expertise to develop a concierge-style pathfinding service that helps the industry navigate federal programs, while also providing technical support to other departments to accelerate the processing of applications for softwood operators. In addition, the Government of Canada is creating the Canadian Forest Sector Transformation Task Force, which will work with provinces, territories, and industry stakeholders to identify long-term restructuring measures that will help ensure the softwood lumber industry remains competitive in the years ahead.

Following receipt of the Task Force’s recommendations, the government will take actions to help restructure the sector and better position it for the medium and longer term.

To read the full press release, and the information on the government's action regarding the steel industry, visit pm.gc.ca