Workers sort lumber at the Gorman Brothers Lumber sawmill, in West Kelowna, B.C., in August.DARRYL DYCK/The Canadian Press
The federal government is rolling out its $700-million loan package for the struggling softwood industry, inviting Canadian lumber companies to apply for assistance as the U.S. trade war intensifies.
In August, Prime Minister Mark Carney announced the plans for supporting the softwood sector. The Business Development Bank of Canada is now welcoming applications from companies seeking help to weather the economic storm triggered by U.S. import taxes on lumber.
Each ownership group will qualify for up to $20-million in loan-guarantee assistance, notably through accessing financing and letters of credit, said Miguel Barrieras, BDC’s chief community banking and impact officer.
The federal Crown corporation’s goal is to assist small and medium-sized forestry operations by backstopping financial terms with existing lenders.
“It’s structured very favourably, both from a rate perspective and repayment structure perspective to allow liquidity being injected and allow them to operate,” Mr. Barrieras said in an interview on Thursday.
Canadian softwood producers brace for impact from new U.S. tariffs
Ottawa’s $1.2-billion financial package includes the $700-million in loan guarantees to help Canadian lumber producers with operations and $500-million in grants and contributions in a bid to diversify markets and reduce dependence on the United States.
U.S. President Donald Trump announced new 10-per-cent tariffs on softwood in late September, citing Section 232 of the U.S. Trade Expansion Act, which allows him to invoke national-security concerns to impose such levies.
The new tariffs on imports of lumber from Canada and other countries took effect on Tuesday, stacked on top of the existing duties in the case of Canada.
The U.S. Department of Commerce levies anti-dumping and countervailing duties totalling 35.16 per cent against most Canadian producers. The Commerce Department raised the duty rates in the summer, up sharply from the previous 14.4 per cent.
Canada has repeatedly rejected the Commerce Department’s arguments that Canadian producers benefit from subsidies while allegedly dumping the product below market value.
With U.S. import taxes now totalling 45.16 per cent on most Canadian producers, the economic pain will be severe, said Kurt Niquidet, president of the BC Lumber Trade Council.
“Companies are really feeling it,” Mr. Niquidet said in an interview. “There will be implications for families and communities.”
Carney rules out countertariffs against the U.S. as talks proceed in Washington
B.C. Forests Minister Ravi Parmar is urging Ottawa to be more aggressive in trying to resolve the softwood trade dispute, which dates back to the early 1980s.
“The next 12 months will have devastating impacts for mill workers, loggers, truckers, contractors and all the jobs dependent on an active forestry industry,” Mr. Parmar said in a recent letter to federal Energy and Natural Resources Minister Tim Hodgson.
Carolyn Svonkin, a spokesperson for Mr. Hodgson, said the federal government recognizes the vital role of the softwood sector.
“We remain committed to defending our softwood industry, seeking fair trade rules, and negotiating a stable, predictable trading relationship that protects Canada’s industry and workers,” she said in a statement on Thursday.
The impact of sluggish lumber markets and reduced timber supplies already has been felt at smaller companies, including those based in British Columbia. Teal-Jones Group and San Industries Ltd. filed for bankruptcy protection in 2024 under the Companies’ Creditors Arrangement Act.
Imports into the U.S. of upholstered furniture, kitchen cabinets and vanities are facing new tariffs of 25 per cent, which also took effect on Tuesday.
On Jan. 1, 2026, tariffs on upholstered furniture would rise to 30 per cent, while those on kitchen cabinets and vanities would climb to 50 per cent, unless countries negotiate a different arrangement.