OTTAWA — The Canadian federal government is set to implement new measures aimed at limiting foreign steel imports and reducing interprovincial rail freight rates. This initiative seeks to bolster Canada's steel industry, which is currently facing significant challenges due to severe tariffs imposed by the United States.
Prime Minister Mark Carney is expected to announce these new measures during a press conference scheduled for 3:15 p.m. ET on Wednesday. According to an unnamed government official, who spoke to The Canadian Press without authorization to disclose details beforehand, the initiative is part of a broader strategy to “protect and transform Canadian strategic industries.”
One of the key components of the new measures includes a significant reduction in the quota for steel imports from countries with which Canada does not have a free trade agreement. The quota is set to decrease from 50 percent to 20 percent of 2024's levels, allowing Canadian steel producers to capture a larger share of the domestic market. This adjustment is projected to create approximately $854 million in additional domestic demand.
In a previous announcement made in July, Carney had already reduced the import quota from non-free trade agreement countries to 50 percent of 2024 levels while imposing a hefty 50 percent tariff on any steel imports exceeding that quota. Additionally, imports from countries with free trade agreements are also likely to face cuts; however, specifics regarding the extent of these reductions remain unclear. Historically, the government has applied a 50 percent tariff on excess steel imports from those nations, with the exception of the U.S.
Another significant aspect of the upcoming measures is a collaborative effort with CN Rail to reduce interprovincial freight rates for steel shipments by 50 percent. If CN Rail cannot accommodate this reduced rate, the federal government has pledged to subsidize the difference, fostering a more favorable economic environment for Canadian steel manufacturers.
While these measures primarily focus on interprovincial shipping, it remains uncertain whether similar provisions will be extended to steel transportation to Northern regions. In these areas, construction materials are typically delivered via sealift boats during open-water seasons, and subsequently transported by truck into the Northwest Territories and Yukon.
The backdrop to these developments includes ongoing turmoil within the Canadian steel industry, exacerbated by the 50 percent tariffs imposed on Canadian steel by U.S. President Donald Trump in June. The situation has further escalated following the breakdown of trade discussions between the U.S. and Canada, particularly after the Ontario government aired television ads in U.S. markets. These advertisements utilized statements from former U.S. President Ronald Reagan from 1987, emphasizing the potential drawbacks of impending tariffs.
In session with the House of Commons, Prime Minister Carney expressed his commitment to providing support for struggling sectors, including steel, auto, and lumber industries. This promise came amid criticisms from Conservative party members regarding his engagement level with President Trump, following Carney's dismissive response to a question concerning his last conversation with the U.S. president.
In addition to the steel measures, the official indicated that Prime Minister Carney is also expected to unveil support mechanisms for the softwood lumber industry in the same announcement on Wednesday. The government’s comprehensive approach highlights a strategic effort to protect vital Canadian industries in the face of external economic pressures.
