Tariff Surge Spurs Ottawa’s $1.2B Lumber Rescue

Prime Minister Mark Carney unveiled a $1.2 billion support package for Canada’s softwood lumber industry on Tuesday, framing it as the first plank of a broader industrial strategy built on “Canadian expertise, using Canadian lumber.”

The plan combines $700 million in federal loan guarantees with $500 million for product and market diversification, aiming to blunt the impact of surging US tariffs while positioning mills for long-term growth.

Loan guarantees will give producers the working capital to keep mills running and restructure balance sheets just as the US Commerce Department nearly tripled combined anti-dumping and countervailing duties to more than 20% on July 25.

A parallel $500 million fund will “supercharge” value-added production—mass timber, engineered panels, and other higher-margin products—with dedicated streams for Indigenous-led businesses. Ottawa argues that deeper domestic processing will hedge against export risk and capture a larger share of the projected two-billion-board-foot jump in lumber demand tied to its pledge of 500,000 new Canadian-built homes annually.

‘Build Canadian’

Future federal construction contracts must now source Canadian lumber, while the forthcoming Build Canada Homes financing program will steer private-sector builders toward domestic wood technologies. Officials say the policy should double structural-panel demand—about one billion square feet a year—while tightening supply chains at home.

With roughly 90% of 2024 lumber exports still headed south, Ottawa will reinstate and expand offshore-marketing programs to court “fast-growing regions with rising housing demand.”

Some 6,000 employees will gain access to $50 million in upskilling grants and enhanced Employment Insurance benefits. Labour Minister Patty Hajdu said the money “equips workers with the tools and training they need to stay competitive.”

Forestry sustains nearly 200,000 Canadian jobs—including 11,000 Indigenous positions—and contributes more than $20 billion to GDP.Carney’s team insists that protecting those jobs now will preserve capacity for future climate-aligned products such as biofuels and biodegradable packaging.

“We are focused on what we can control—building Canada strong with Canadian lumber,” Carney said in West Kelowna. 


Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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