Canada’s new government has announced a sweeping series of trade, industrial and workforce measures designed to protect domestic producers, stabilize employment and strengthen competitiveness in the steel sector.
According to the statement released by the Office of the Prime Minister of Canada, international steel markets have become increasingly distorted by excess capacity and non-market practices that generate artificially low-priced imports. These pressures have been amplified by recent US trade actions, which have restricted Canada’s primary export avenue and heightened import competition at home.
As a result, Canadian steel exports, traditionally exceeding half of domestic production, with over 90 percent shipped to the US, have dropped by 24 percent year on year. Revenue losses have been accompanied by an estimated 1,000 job cuts since the imposition of tariffs.
Previously announced government support
In July and September 2025, Canada had introduced several measures to stabilize the industry. These included tariff rate quotas, country-of-melt-and-pour rules, worker supports, liquidity tools, a $150 million Regional Tariff Response Initiative, a $1 billion Strategic Response Fund, and a new Buy Canadian Policy framework. In this context, the government announced the implementation of a new series of trade measures.
Reduced tariff rate quotas to limit import surges
Canada will tighten existing tariff rate quotas, reducing the amount of steel that can enter the country tariff-free:
- Effective December 26, 2025, quotas for countries without a free trade agreement will be cut from 50 percent to 20 percent of 2024 levels, with over-quota imports subject to a 50 percent tariff.
- On the same date, quotas for countries with free trade agreements will be reduced from 100 percent to 75 percent of 2024 levels, with the 50 percent tariff maintained.
- The USMCA carve-out remains intact, exempting the US and Mexico from the requirements.
Canada will also impose a 25 percent tariff on listed steel derivative products from all countries. The initial list covers more than $10 billion in imports and includes categories such as non-alloy shapes, doors and windows, fasteners, wire and cables, structures, metal furniture, and others.
The government also stated that it will terminate the temporary exemption from Canadian tariffs on imported steel used in domestic manufacturing, food and beverage packaging, and agricultural production. According to the press release, this temporary exemption will officially expire on January 31, 2026.
Strengthened antidumping enforcement at border
To curb foreign steel dumping and mislabeling, the Canada Border Services Agency (CBSA) will enhance enforcement:
- Upgrades to the Border Watch online portal will make it easier to report non-compliance.
- Recurring technical workshops will be held with the Canadian Steel Producers Association to support accurate product classification and enforcement.
- A dedicated CBSA steel trade compliance team will be created to conduct targeted inspections and compliance reviews.
In addition, beginning in spring 2026, the government will fund the Canadian National and Canadian Pacific Kansas City railways to provide a 50 percent discount on freight rates for interprovincial shipments of steel and lumber. This aims to improve competitiveness for domestic producers and support national infrastructure development.
Enhanced protections for steel workers
In the meantime, to address employment instability caused by reduced production and restructuring, Canada will expand the Employment Insurance Work-Sharing Program in which participants will receive income top-ups to improve affordability for affected workers and grants will help employers increase the income replacement rate from 55 percent to 70 percent.