Canada’s federal government has announced more than $1.3 billion in new funding to strengthen the lumber and steel industries and protect them from trade disruptions caused by U.S. tariff measures, according to the Government of Canada.
The plan introduces $700 million in new funding next year for the Build Canada Homes program. This housing initiative will prioritise multi-year, shovel-ready projects using Canadian wood products and is expected to generate between $70 million and $140 million in new demand for Canadian lumber. The program forms a key part of Canada’s strategy to expand domestic wood use and reduce reliance on exports.
To help large softwood producers manage financial pressures, the government will establish a $500 million Large Enterprise Tariff Loan facility. A further $100 million over two years will fund Work-Sharing and training programs, supporting up to 26,000 workers in industries affected by tariffs and reduced export access.
These measures build on the $1.2 billion forest sector investments announced erarlier, which included $700 million in loan guarantees through the Business Development Bank of Canada to help forest firms maintain operations and $500 million for Natural Resources Canada programs to diversify markets and promote mass timber exports.
In the steel sector, Canada will reduce tariff rate quota levels for non-free trade partners from 50% to 20% of 2024 levels and for non-CUSMA free trade partners from 100% to 75%. A 25% global tariff will also apply to imported steel-derivative products such as wind towers, prefabricated buildings, fasteners, and wires. To support domestic distribution, Canada will partner with railway companies to cut interprovincial freight rates for domestic steel and lumber shipments by 50% beginning in spring 2026.
Prime Minister Mark Carney said the government is acting “with urgency and determination to transform these industries and empower workers and businesses with the tools they need to bridge to the future.” Industry Minister Mélanie Joly stated that the measures will “safeguard industries affected by international tariffs and ensure companies have the tools and financing they need to keep operating and growing.”
The U.S. Lumber Coalition condemned the new package, calling it a continuation of “massive subsidies” that “abuse U.S. trade laws” and seek to “neutralize U.S. tariff enforcement actions.” Coalition Chair Andrew Miller said Canadian firms “compete against the Canadian government itself,” and urged Washington to consider additional U.S. measures in response.
The Canadian government said the measures aim to reduce dependence on imported materials, boost domestic demand for Canadian steel and wood, and reinforce national supply chain resilience.