Canada Announces New Measures to Protect Steel and Lumber Industries (Updated)

Trade Update • Dec. 4, 2025

Key Points

• Canada reduces steel import quotas and imposes a 25% tariff on certain steel-derivative products.
• Border enforcement is strengthened to prevent steel dumping and ensure surtax compliance.
• Temporary tariff remission on steel imports will end on January 31, 2026, to encourage the use of Canadian steel.
• Freight rates for transporting Canadian steel and lumber across provinces will be reduced by 50% starting Spring 2026.
• Build Canada Homes will prioritize projects using Canadian wood, generating $70–$140 million in demand.
• $100 million will support workers in Work-Sharing programs, benefiting up to 26,000 employees.
• Additional funding of $1 billion will support businesses through the BDC Softwood Lumber Guarantee Program and the Large Enterprise Tariff Loan facility.
• A Canadian Forest Sector Transformation Task Force will be launched to provide guidance on maintaining competitiveness and managing long-term industry transformation.
• Update: CBSA provides response to steel annoucement.

On November 26, 2025, the Government of Canada announced new measures to protect and grow its steel and lumber industries amid U.S. trade disruptions. The government is introducing new tariffs, limiting foreign imports, and supporting domestic producers. Measures include transport cost reductions, homebuilding initiatives, and financial support for workers and businesses. The goal is to strengthen Canadian industries, create domestic demand, and help companies and workers compete in global markets. These measures build on earlier initiatives by the government to support sectors most affected by tariffs.

In a separate announcement, Canada outlines in detail these new measures and provides backgrounds on production, trade exposure, workforce impacts, and the sectors’ roles in infrastructure, manufacturing, and regional economies.

Steel Industry Measures (Updated)

Import Limits and Tariffs

• A 25% global tariff will apply to targeted steel-derivative products, including wind towers, prefabricated buildings, fasteners, and wires. The tariff will cover over $10 billion in imports and apply to products where steel makes up a large portion of their value.
• Effective December 26, 2025, Canada will reduce tariff-free steel import quotas for countries without a free trade agreement from 50% to 20% of 2024 levels, with a 50% surtax on any over-quota imports.
• Also starting December 26, 2025, Canada will lower tariff‑free steel import quotas for countries with a free trade agreement (excluding the U.S. and Mexico) from 100% down to 75% of 2024 levels; any volumes beyond that threshold will incur a 50% surtax, while the existing CUSMA carve‑out remains unchanged.

Expiration of Temporary Counter-Tariff Remissions on U.S. Goods

The temporary remission of Canadian counter-tariffs on U.S. goods expires on December 15, 2025. Following this, the remission on U.S. steel used in manufacturing and related sectors ends January 31, 2026, but exemptions for autos, auto parts, and aerospace remain. Remission on aluminum products continues beyond this date.

Importers may still request relief under the remission framework issued earlier this year, which applies in specific cases, such as when inputs cannot be sourced domestically.

CBSA Update via The Honourable François-Philippe Champagne

“Thank you for reaching out and for flagging the implications for brokers and importers in general. I know how challenging it is to plan around an announcement of this scope without having the detailed rules in hand.

By way of context, the CBSA’s role is to administer surtax orders once they are made, rather than to design the underlying policy. The Prime Minister’s announcement came without advance technical parameters on our side as well, and we are now waiting for the Department of Finance to articulate the policy details in the surtax order.

At this point we do not yet have a firm timeline from Finance Canada for when the order and associated guidance will be finalized. Until we see the specific legal and policy parameters, it would be difficult for the CBSA to offer any implementation timeline with real certainty. What I can say is that I have already prepared my team to be available throughout the holiday period, including the statutory holidays, so that we can move quickly once the order is received and bring this measure to life as efficiently as possible.
I fully appreciate how difficult this uncertainty is for industry and for your clients.

If the timing and operational impacts are as challenging as I expect they may be, you may wish to make those concerns known directly to the Minister of Finance, so that his office has a clear line of sight to what you are experiencing on the ground.

In the meantime, we will move as quickly as we can once the policy parameters are confirmed.”

Border Enforcement

• The Canada Border Services Agency will have a dedicated steel compliance team.
• CBSA will conduct technical workshops with the Canadian Steel Producers Association to improve enforcement.
• A new Market Watch Unit will track steel market prices and update normal values for trade remedies.

Transport Support

• Freight rates for transporting Canadian steel across provinces will be cut by 50% starting Spring 2026, making domestic steel more affordable.

Lumber Industry Measures

Homebuilding and Demand Creation

• Build Canada Homes will prioritize shovel-ready, multi-year projects using Canadian wood products that can start within 12 months.
• The agency will receive roughly $700 million in funding next year, creating $70–$140 million in demand for Canadian lumber and attracting private and provincial investment.
  

Buy Canadian Policy

• Contracts over $25 million and federal grants will prioritize Canadian materials, including lumber and steel, across all programs.
  

Worker and Business Support

• $100 million over two years will support employees in Work-Sharing programs, helping up to 26,000 workers in steel and lumber sectors.
• $500 million will be added to the BDC Softwood Lumber Guarantee Program.
• $500 million will be provided through the Large Enterprise Tariff Loan facility for lumber companies facing liquidity challenges.
  

Simplified Access and Long-Term Planning

• A single-window system will help forestry companies access federal support programs.
• A Canadian Forest Sector Transformation Task Force will provide guidance to maintain competitiveness and manage long-term industry transformation.
  

Transport Support

• Similar to steel, freight rates for interprovincial transport of Canadian lumber will also be reduced by 50% starting in Spring 2026.

Prime Minister’s Statement

Additional Background Info

• Earlier this year, Canada introduced measures to support workers and businesses affected by U.S. tariffs and trade disruptions.
• Nearly 1,500 companies from steel, aluminum, lumber, manufacturing, automotive, and seafood sectors applied for assistance, including over 230 steel firms, with support being delivered rapidly.
• Funding is helping companies adopt new technologies, diversify products, secure domestic supply chain roles, and participate in global trade.
• Relief has reached nearly 37,000 Canadians, preventing more than 14,000 job losses.
• Overall employment is rebounding, with 120,000 new jobs created since March.

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