Canada Responds to Softwood Lumber Duty Hikes

In the wake of the U.S. Commerce Department's announcement that it's nearly tripling anti-dumping duties on Canadian lumber imports from 7.66% to 20.56%, with the possibility of additional tariffs or levies still to come, Canada is responding.

Prime Minister Mark Carney shared a flurry of fresh initiatives in a press release, touting up to $700 million (Canadian dollars) in loan guarantees and $500 million to spark "product and market diversification," among other measures. The release says:

"The global trade landscape has fundamentally changed. To meet this moment, Canada’s new government is developing a comprehensive industrial strategy. It will invest in domestic production, develop Canadian expertise, support our companies to retool and reinvest, and help industries pivot to a growing Canadian market and those of new, reliable trading partners around the world."

Without directly referencing the U.S., the not-so-subtle subtext of the release is aimed squarely at its neighbor to the south, as souring relations and an escalating trade war force Canada to explore different markets. According to its own calculations, in 2024, 66% of Canada’s total softwood lumber production was exported, and of that, nearly 90% was exported to the U.S.

Here's how Canada says it plans to support its softwood lumber industry:

• Provide up to $700 million in loan guarantees to address the immediate pressures facing the softwood lumber sector to ensure companies have the financing and credit support they need to maintain and restructure their operations during this period of transformation.
• Invest $500 million to supercharge product and market diversification to make the industry more competitive for the long-term. As technology changes building and demand grows for softwood lumber, this will increase domestic processing and value-added production.
• Build Canadian by prioritizing Canadian materials in construction and changing federal procurement processes to require companies contracting with the federal government to source Canadian lumber. The government has pledged to deliver on its mandate to build major infrastructure projects faster and to increase the pace of homebuilding to nearly 500,000 new homes per year over the next decade.

• Diversify international markets for Canada’s sustainably sourced forest products. The nation will launch a new initiative to diversify exports of Canadian wood products, including the reinvigoration of federal programming to expand offshore markets for sustainable, innovative, high-quality products.
• Provide $50 million for upskilling, reskilling, and income supports for more than 6,000 affected softwood lumber workers through the Labour Market Development Agreements. This investment builds on temporary enhancements to the Employment Insurance (EI) program and the EI Work-Sharing program. Through this investment, we will equip workers with the tools and training they need to stay competitive – helping them adapt to new technologies, strengthen their expertise, and excel in changing industries.

The releases concludes: "Canada’s economy is shifting from reliance to resilience. During this time of transformation, these measures will ensure Canada’s softwood lumber industry and workers are able to adapt and emerge even stronger."