The Canadian government has opened applications for a $700 million loan guarantee program that helps lumber companies weather mounting US tariffs that have pushed some firms into bankruptcy.
The Business Development Bank of Canada announced the program’s launch Wednesday, allowing softwood lumber businesses to access up to $20 million per ownership group in financing and letters of credit through their primary financial institutions.
“Canada’s softwood lumber sector supports thousands of workers and plays a vital role in Indigenous communities and our economy,” Industry Minister Mélanie Joly said in announcing the program.
The initiative delivers on commitments Prime Minister Mark Carney made in August, when he unveiled a support package valued between $1.2 billion and $1.25 billion to help the sector combat what Canadian officials characterize as unjust trade penalties.
US tariffs on Canadian lumber have reached 45.16%. That figure combines anti-dumping and countervailing duties totaling 35.16% — more than doubled from 14.4% last summer — with new 10% levies President Donald Trump imposed in September under national security provisions.
The cascading trade penalties have forced several forestry operations into bankruptcy protection, including British Columbia’s Teal-Jones Group and San Industries Ltd. The US market absorbs roughly 90% of Canadian lumber exports, leaving the industry vulnerable to American trade actions.
Industry leaders have warned of severe economic consequences. The BC Lumber Trade Council says the tariff burden will inflict substantial damage on companies already struggling with timber shortages and weak construction demand.
BDC officials stressed the guarantees serve as “a complementary tool with other financial options and government support programs” rather than a comprehensive solution to the industry’s challenges. The program aims to provide immediate cash flow while Ottawa pursues longer-term strategies around market diversification and domestic procurement.
American lumber producers have pushed back against Canadian government assistance. US Lumber Coalition executive director Zoltan van Heyningen accused Ottawa of “heaping even more subsidies onto Canada’s lumber industry” beyond those the Commerce Department has already targeted with duties.
Washington has maintained for decades that Canadian provinces underprice timber harvesting rights on public lands, creating unfair advantages for Canadian producers. Canadian officials have consistently disputed these allegations.
The trade conflict over softwood lumber stretches back more than 40 years, making it one of the most enduring commercial disputes between the neighboring countries.
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