Ontario Construction News staff writer
The federal government is moving to protect Canada’s steel industry from intensifying global trade pressures by introducing stricter import controls and offering new financial supports for producers and workers.
Canada is among the countries most affected by global steel tariffs and is one of the world’s largest per capita importers of steel. Canadian producers are highly trade exposed, exporting just over half of their annual production in 2024, more than 90 per cent of which went to the United States.
The government said the steel sector is critical to infrastructure, advanced manufacturing and the clean economy, and that action is needed to prevent market disruption and ensure long-term stability.
Effective Aug. 1, tariff rate quotas (TRQs) will be strengthened to prevent the Canadian market from being flooded with cheap foreign steel. TRQs allow a set volume of steel to be imported at a lower or zero tariff rate, with higher tariffs applied to imports exceeding that limit.
For countries with a free trade agreement in force with Canada, excluding the United States and Mexico, a 50 per cent surtax will apply to imports exceeding 100 per cent of 2024 volumes. For countries without a free trade agreement, the quota for tariff-free steel will be reduced to 50 per cent of 2024 levels, with the same surtax applied beyond that threshold.
A 25 per cent surtax will also be applied on steel imports from all countries except the U.S. if the steel was melted and poured in China. This measure, which aligns with Canada’s existing China Surtax Order, is expected to come into force before the end of July and aims to improve transparency and prevent circumvention of trade controls.
Up to $1 billion will be allocated through the Strategic Innovation Fund to help Canadian steel producers modernize operations, expand product lines, and strengthen domestic supply chains. The funding is intended to support the production of steel not currently manufactured in Canada, help meet the needs of strategic sectors such as defence, and ensure the long-term viability of the industry.
To support workers affected by U.S. tariffs and global market shifts, Ottawa is investing $70 million over three years through Labour Market Development Agreements with provinces and territories. The funding will help retrain and upskill up to 10,000 steelworkers, with targeted training and job retention supports.
Up to $150 million of the previously announced $450-million Regional Tariff Response Initiative will be targeted to small and medium-sized steel businesses. The program will be delivered by Canada’s regional development agencies, with more details expected soon.
The Large Enterprise Tariff Loan Facility, introduced in March with up to $10 billion in available financing, is being updated to better support large steel producers. Changes include lowering the minimum revenue threshold from $300 million to $150 million, reducing the minimum loan size to $30 million, extending repayment terms from five to seven years and decreasing interest rates. The facility will also allow the Canada Enterprise Emergency Funding Corporation to hold equity in supported companies, which must commit to worker retention.
The government is also making changes to federal procurement rules. Companies contracting with the federal government will be required to source steel from Canadian producers where possible. An exemption will be granted only if a company can show that no domestic producer is able or willing to supply the steel, or if using Canadian steel would lead to unsustainable cost increases or delays to projects related to defence, national security or other critical areas.
The Business Development Bank of Canada’s $500-million Pivot to Grow fund, launched in early 2025, will also offer more flexible financing to small and medium-sized steel companies facing liquidity concerns. Further details are expected to be released in the coming weeks.