The federal government will provide $1.2 billion in financial supports to help Canadian softwood lumber producers counter increased U.S. tariffs, Prime Minister Mark Carney announced.

The move has large implications for Canada’s commercial real estate industry as well as the lumber sector.

The package includes $700 million in loan guarantees to help forestry companies secure financing and restructure operations to reduce reliance on U.S. exports. An additional $500 million in grants and contributions will support product development and market diversification, including materials such as reinforced timber and wood fibre-based insulation for prefabricated housing.

“The forest sector is a pillar of Canada’s economy,” said Carney. “As we shift from reliance to resilience, Canada’s new government will ensure the industry can transform to seize new opportunities in Canadian and international markets. In the face of a changing global landscape, we are focused on what we can control – building Canada strong with Canadian expertise, using Canadian lumber.”

The government also plans to prioritize Canadian lumber in its national housing-construction initiative, Build Canada Homes, which aims to double annual housing starts to 500,000 units by 2025. The shift is expected to double the use of Canadian softwood lumber in new housing to nearly two billion board feet per year.

“By bolstering this key industry and ensuring resilient supply chains, we stand with the industry, its workers, and communities to keep Canada a trusted global trade partner,” said Industry Minister Mélanie Joly.

Nearly 90% of Canadian lumber exports currently go to the U.S., where duties on most Canadian producers have climbed to 27.3%, according to The Globe and Mail. Countervailing duties may bring the total to approximately 35%, while a broader tariff of 35% has been applied to some Canadian goods not covered under the United States-Mexico-Canada Agreement.

The support package includes $50 million for worker retraining and programs to assist Indigenous-led business development. Ottawa also plans to expand efforts to diversify global markets and promote Canadian lumber in green building initiatives.

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