Canada’s softwood lumber sector, long burdened by U.S. tariffs, is set to receive federal support. Industry Minister Mélanie Joly announced that new funding, backstopped by the Business Development Bank of Canada (BDC), will soon be available to help businesses stay afloat and protect jobs.
Background: Tariffs on Softwood Lumber
Despite the Canada-U.S.-Mexico Agreement (CUSMA) exempting much trade from tariffs, U.S. President Donald Trump has targeted Canadian industries including steel, aluminum, autos, energy, and lumber. The softwood lumber sector has been particularly hard-hit with what Canadian officials call “unjustifiable” duties.
Joly’s Relief Plan Explained
Speaking in Fredericton, Joly said the government will soon provide financial assistance through banks, supported by the BDC. The funding will ensure businesses remain operational while the government works on a Buy-Canadian policy to prioritize domestic lumber in housing, infrastructure, and major projects.
$1.25 Billion Aid Package Announced in August
In August, Prime Minister Mark Carney unveiled a $1.25 billion relief package for the softwood lumber sector. The new funding will build on that support, focusing on immediate financial stability for affected businesses.
How the New Funding Will Work
The relief will be customized to company needs, cutting red tape and using banks as the primary channel for access. Funding will cover operational expenses, capital costs, and cash flow support.
Role of the Business Development Bank of Canada
According to the BDC, the program will make $700 million in new term loans or letters of credit available. These funds will be distributed through primary financial institutions and are designed to complement existing financial programs, not replace them.
Impact on Canadian Lumber Businesses
With tariffs squeezing margins, many lumber companies have struggled to stay profitable. The relief package aims to:
- Protect jobs in the forestry sector
- Help companies manage rising costs
- Maintain Canada’s competitiveness in the U.S. market
Focus on a Buy-Canadian Policy
Joly emphasized that federal policies will prioritize using Canadian wood in domestic construction. “We will make sure our homes, infrastructure, and major projects are built with Canadian lumber,” she said.
Government’s Long-Term Strategy for the Sector
Beyond immediate relief, the government is working to:
- Strengthen resilience of the forestry sector
- Support innovation in lumber production
- Promote domestic consumption to reduce dependency on U.S. markets
Industry and Government Reactions
Tim Hodgson, Minister of Energy and Natural Resources, reiterated that Canada will fight “unjustified duties” while helping the industry adapt. BDC also acknowledged the funding is not a cure-all, but a supportive tool during tough market conditions.
What This Means for Canada’s Economy
The forestry industry remains vital for Canada’s economy and national security. Joly noted that maintaining strong lumber, steel, and aluminum sectors is essential should the country ever face a non-peaceful future.