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Prime ministers

Canada Announces $1.2-Billion Financial Support for Softwood Lumber Producers Amid US Trade Duties

Strategic Insights

— 2 min read

Prime Minister Mark Carney has unveiled a $1.2-billion package to assist Canada's softwood lumber producers in the face of crippling US trade duties. The government has committed to providing $700-million in loan guarantees to help forestry companies restructure their operations and reduce their reliance on exports to the US. Ottawa will also allocate $500-million in grants and contributions to diversify markets and develop new product lines, such as reinforced timber and low-carbon insulation. As part of the program, the government will prioritize the use of Canadian lumber in its plans to accelerate housing construction across the country.

Key Takeaways:

  • The Canadian government will provide $1.2-billion in financial support to help softwood lumber producers deal with US trade duties, including $700-million in loan guarantees and $500-million in grants and contributions.
  • The loan guarantees will allow forestry companies to restructure their operations and reduce their reliance on exports to the US, while the grants and contributions will support diversification of markets and development of new product lines.
  • The government will prioritize the use of Canadian lumber in its plans to increase housing construction across the country, with the goal of doubling new home construction to 500,000 units per year by 2025.
  • The program includes funding for Indigenous-led business development and support for retraining industry employees whose jobs will change or be jeopardized as a result of the transformation in the industry.
  • The government aims to promote Canadian lumber in global markets, with a focus on green building and wood-based construction, and has referenced a previous program called Canada Wood, which was previously ramped down due to a lack of gains in international markets.

Statistics:

  • 90% of Canadian lumber exports currently go to the US, where duties have been raised to 20.56% on some producers.
  • The total tariff on Canadian softwood imports to the US will be approximately 35% if countervailing duties are raised further to levels announced on a preliminary basis in April.
  • The Canadian government's support package includes $50-million to retrain industry employees and new programs to diversify markets for Canadian lumber.
  • The global market for green building and wood-based construction is estimated to be between $150-billion and $240-billion.

Sources:

  • Government of Canada (No date) - "A positive, supportive and inclusive Canadian economy requires rising productivity and rising incomes for all Canadians: one of the ways to achieve these goals is through a modern, diversified economy which is as strong as the many sectors and industries within it"
  • Prime Minister Mark Carney (2023) - Remarks at a lumber mill in West Kelowna, B.C.
  • BC Lumber Trade Council (No date) - "The BC Lumber Trade Council believes that the unfair duties imposed on Canadian softwood lumber by the US Commerce Department are unjustified and harmful to the US and Canadian economies."

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