Canada to Deliver $700M for Struggling Softwood Lumber Sector

MONTREAL — As announced by Minister of Industry Mélanie Joly, the Business Development Bank of Canada (BDC) will make it easier for the country’s softwood lumber businesses to access to $700 million in new term loans or letters of credit through their primary financial institution.

The $700 million program is part of a broader Government of Canada initiative to help the sector, and was designed after discussions with companies, industry associations, and financial institutions to determine how financing options could help address the needs of softwood lumber businesses.

As a result of these discussions, BDC will provide guarantees to the financial institutions of eligible softwood sawmills, lumbermills and remanufacturers. These guarantees can be used to access financing and letters of credit, which can help offset the financial strain of collateral or bonds related to duty payments. BDC emphasized the program is not intended as a cure-all for the sector’s considerable challenges but rather act as a complementary tool with other financial options and government support programs to help these businesses continue to operate and better manage through an ever-evolving situation.

The new program follows more than $500 million in tariff-specific solutions delivered by BDC through its $500 million Pivot to Grow to provide eligible SMEs of any sector with advisory and financing options, including loans up to $5 million. Eligible softwood lumber businesses and the forestry industry as a whole can access the Pivot to Grow program.

The above-noted stakeholders had two key requests: get the financing to market as quickly as possible with the least impact on businesses. That’s why BDC’s solution will be delivered through their existing lenders, reducing funding time and administrative requirements. The support will focus on softwood sawmills, lumbermills and remanufacturing mills whose principal business is the exportation of softwood lumber products to the United States to continue to operate their businesses during the current economic challenges.

BDC, Canada’s only development bank dedicated solely to small- and medium-sized business, continues to work in concert with governments, the private sector and stakeholders within the ecosystem that supports SMEs as part of the broader Canadian response to trade tensions. BDC’s role is focused on providing business advice and financial tools to help them with financial management, operational efficiency, strategic business acquisitions, and market/sector diversification as they seek new growth opportunities.