The new plan comes amid stalled trade talks between Ottawa and Washington.
Canada will offer more aid to the steel and lumber industries to help them deal with United States tariffs and build domestic markets, as well as increase protections for steel and lumber workers.
Prime Minister Mark Carney outlined the new plan at a press conference on Wednesday.
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Carney said Ottawa will reduce the quota on steel imports from countries that do not have a free trade agreement with Canada from 50 per cent to 20 per cent in 2024.
The quota for countries that have a free trade agreement (FTA) with Canada will be reduced from 100 percent to 75 percent of the 2024 level. It does not include the United States and Mexico, which are bound by the United States–Canada–Mexico Free Trade Agreement.
Canada will also impose a global 25 percent tariff on targeted imported steel-derived products, and add border measures to combat steel dumping.
In July, Ottawa set the quota on steel imports from non-FTA countries at 50 per cent of 2024 levels to prevent dumping of foreign steel into Canada.
Measures are being tightened to open the domestic market for steel produced in Canada, a government official said.
The steel industry contributes more than 4 billion Canadian dollars ($2.8 billion) to Canada’s gross domestic product (GDP) and directly employs more than 23,000 people. However, it is one of the two sectors hardest hit by US President Donald Trump’s 50 per cent tariff on steel imports from Canada.
Trump has imposed a 50 percent tariff on steel and softwood lumber, which have long been subject to U.S. tariffs, after the Trump administration hiked the tax currently at 45 percent last month.
Carney said that the process of closer economic relationship that has been going on for decades between Canada and America has now ended.
“As a result, many of our strengths have become weaknesses. Last year, more than 75 percent of our exports went to the United States. Ninety percent of our lumber exports, 90 percent of our aluminum exports, and 90 percent of our steel exports are all bound for the same market,” Carney said.
Ottawa will work with railway companies to cut freight rates for interprovincial transfers of Canadian steel and lumber by 50 per cent as early as 2026.
“We will make it more affordable to transport Canadian steel and lumber across the country by cutting freight rates,” Carney said.
The government said it would also support the use of locally produced steel and wood in home construction, and provide financial support for companies dealing with tariff-related impacts, such as their workforce, liquidity shortages and restructuring operations.
trump tension
Trump halted trade talks with Canada last month after the Ontario provincial government ran television ads in U.S. markets that cited a speech by former U.S. President Ronald Reagan criticizing Trump’s tariffs.
Carney said he would be in Washington on December 5 for the final draw of the FIFA World Cup 2026 tournament. He said he would then talk to Trump and said he spoke briefly to the president on Tuesday.
“When the United States wants to rejoin those negotiations, we are ready to rejoin those negotiations,” Carney said.
Carney’s announcement comes as pressure increases on American businesses struggling with Trump’s tariffs.
John Deere tractor maker Deere & Co. said Wednesday it expects to be hit hard by tariffs in 2026. The company expects a pre-tax tariff loss of about $1.2 billion in fiscal 2026, compared to about $600 million in 2025.
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