Carney to announce more support for steel and other sectors as trade war grinds on

Prime Minister Mark Carney plans to announce two new measures to help Canada’s struggling steel sector, which continues to face 50 per cent tariffs on its exports to the United States.

The federal government plans to lower the volume of steel that countries lacking a free trade agreement with Canada can import on a duty-free basis and also introduce policies to reduce the cost of steel shipments via rail within Canada.

The announcements will be made Wednesday afternoon, according to a source who was not authorized to speak publicly and was first reported by the Toronto Star.

Domestic steel producers are struggling to find new customers for their products as the U.S. market increasingly closes off to them. Carney also plans to announce policies to aid other sectors struggling in the trade war, including softwood lumber producers.

This summer, the federal government announced a $400-million loan to Algoma Steel Inc. and Ontario provided it $100 million. The company said it derived more than half its revenue last year from U.S. sales, but it expects those sales to drop to zero by the year-end if U.S. tariffs remain in place.

Earlier this year, the Canadian Steel Producers Association lobbied the federal government to impose even more stringent limits on steel imports to Canada. It asked the government to limit steel imports to 25 per cent of the volumes sent in 2024 and apply it to all countries, whether they have a free-trade agreement with Canada or not.

In June, Carney said countries lacking a free-trade agreement with Canada would be limited to exporting the same amount of steel they shipped here in 2024. In July, he lowered the rate to 50 per cent of 2024 volumes and applied a 50 per cent tariff to any steel in excess of that volume.

Today, he plans to lower the limit once again to 20 per cent, but it only affects countries that lack a free-trade agreement, according to the source.

British Columbia and other Western provinces have also said that shipping steel from Central and Eastern Canada — particularly Ontario and Quebec, where much of the industry is based — is prohibitively expensive because of rail costs. Trade groups and B.C. ministers have repeatedly asked the federal government to consider that when imposing restrictions on steel imports.

• Email: gfriedman@postmedia.com