Lumber sector strategy revealed by Carney amid steep unpredictability of trade conflict
Canada Unveils Comprehensive Plan to Mitigate Lumber Industry Uncertainty
The Canadian government has announced a wide-ranging plan to address the costly uncertainty in the lumber industry, which is heavily dependent on the U.S. market and faces rising U.S. duties.
Prime Minister Mark Carney revealed the strategy, which includes financial support, market diversification, domestic procurement policies, industry modernization, and workforce training.
Financial Support
The plan includes loan guarantees of up to C$700 million to help lumber mills restructure, maintain operations, and stabilize supply over the medium term. Additionally, C$500 million in grants and contributions will be provided to boost value-added processing and diversify markets beyond the U.S.
Market Diversification
The government aims to expand foreign market opportunities for Canadian lumber, including support for Indigenous-led forestry businesses. They also plan to seek more foreign markets for their lumber, such as in Asia.
Domestic Procurement Policies
Updated federal procurement policies will prioritize Canadian lumber in government projects, encouraging the use of domestic wood products and stimulating demand at home.
Industry Modernization
A target has been set to increase housing construction to around 500,000 homes per year over the next decade, supported by programs like "Build Canada Homes" that will finance private builders using Canadian wood innovations such as mass timber.
Workforce Training
The government will provide $50 million dedicated to workforce support, specifically for upskilling, reskilling, and income support programs for about 6,000 workers affected by trade tensions and industry modernization.
Prime Minister Carney emphasized that Canada will continue to contest the U.S. duties as unjustified and affirmed the country’s role as a critical lumber supplier that keeps housing costs down in the U.S., while the government undertakes efforts to reduce dependency on the U.S. market by diversifying export options and investing in product innovation.
Sector Impact
Sectors expected to face the brunt of U.S. President Donald Trump's trade war against Canada include autos, steel, aluminum, copper, pharmaceuticals, semiconductors, softwood lumber, and more.
Trade Tensions
By the end of this decade, Canada could capture a significant share of the global bioeconomy market, up to $150 billion to $240 billion. However, the Canadian government will provide up to $700 million in loan guarantees to companies dealing with immediate pressures of the trade war.
Foreign Affairs Minister Anita Anand and Finance Minister Francois-Philippe Champagne are currently visiting Mexico to meet with Mexican President Claudia Sheinbaum. Prime Minister Carney expressed disappointment over Trump's move but remains committed to CUSMA, the world's second-largest free trade agreement by trading volume.
Carney added that tariffs would be applied where they had the maximum impact in the United States and a minimum impact in Canada. On Friday, after the U.S.-imposed target date for a trade deal between Canada and the U.S. expired, Trump increased the tariffs on Canadian goods from 25% to 35%.
Some in Canada, such as Ontario Premier Doug Ford, have called for further retaliation, suggesting a 50% tariff on U.S. steel and aluminum. Nova Scotia Premier Tim Houston indicated that his province is considering retaliatory measures of its own.
Despite these challenges, the Canadian government remains committed to navigating the complexities of international trade and protecting the interests of its industries and workers.
- The financial approach in the Canadian government's plan to mitigate lumber industry uncertainty involves providing loan guarantees of up to C$700 million and C$500 million in grants and contributions for lumber mills, value-added processing, and market diversification.
- The government's strategy to lessen dependence on the U.S. market within the lumber industry includes increasing housing construction domestically through programs like "Build Canada Homes" and expanding foreign market opportunities, such as in Asia, for Indigenous-led forestry businesses.
- Beyond the lumber industry, the General News reports that sectors like autos, steel, aluminum, copper, pharmaceuticals, semiconductors, softwood lumber, and more are anticipated to be affected by trade tensions between Canada and the U.S., with foreign Affairs Minister Anita Anand and Finance Minister Francois-Philippe Champagne in Mexico discussing trade agreements with President Claudia Sheinbaum.
