Ottawa is preparing a significant intervention to shield Canada’s steel industry from crippling tariffs imposed by the United States. Prime Minister Carney is set to unveil a series of measures designed to bolster domestic producers and navigate a turbulent trade landscape.
The core of the plan involves a substantial reduction in steel imports from nations without existing free trade agreements with Canada. These imports will be capped at 20 per cent of 2024 levels, a dramatic decrease intended to create space for Canadian steel to meet domestic demand – an estimated $854 million opportunity.
This isn’t the first step taken. Earlier this summer, import quotas were initially lowered to 50 per cent of 2024 levels, accompanied by a 50 per cent tariff on any excess. Now, the government is doubling down, signaling the severity of the threat to the industry.
Even countries with free trade agreements won’t be exempt from adjustments, though the extent of those cuts remains to be fully revealed. A 50 per cent tariff was already applied to imports exceeding 2024 levels from these nations, with the notable exception of the United States.
Recognizing that internal transportation costs are a major factor, the government is also targeting interprovincial rail freight rates. Negotiations are underway with CN Rail to reduce these rates by 50 per cent for steel shipments.
Should CN Rail prove unable to meet this target, the government has pledged to directly subsidize the difference, ensuring Canadian steel can move efficiently across provincial borders. The impact of these measures on shipments to Canada’s northern territories is still being determined.
These actions are a direct response to the 50 per cent tariffs levied on Canadian steel by the U.S. President in June, a move that sent shockwaves through the Canadian economy. The situation escalated after trade talks stalled, triggered by Ontario’s advertising campaign in U.S. markets.
Prime Minister Carney, facing pressure in Parliament, had previously offered a terse response when questioned about communication with the U.S. President, a remark he has since acknowledged was ill-considered. He has now committed to providing support for the steel, auto, and lumber sectors.
Beyond steel, the Prime Minister is also expected to announce measures aimed at supporting the softwood lumber industry, further demonstrating a commitment to protecting key Canadian industries during this period of trade uncertainty.
