Canada is among the countries most affected by global steel tariffs. It is one of the world's largest per capita importers of steel. Canadian steel producers are highly trade exposed, exporting just over 50 per cent of their annual production in 2024, during which over 90 per cent went to the U.S. Our steel industry is a cornerstone of the national economy-critical to building infrastructure, supporting advanced manufacturing, and securing our future prosperity. Canada is proud of our highly skilled steelworkers and the strong, resilient industry they power. However, rising trade pressures and market disruptions demand a clear and proactive response. The government is taking decisive steps to protect, stabilize, and pivot our steel sector. Canada needs steel to build Canada strong - homes, bridges, transit, and the clean economy of tomorrow-and the government is committed to ensuring our industry is ready to meet that demand.
Tariff rate quotas
Tariff rate quotas (TRQs) allow a certain amount of steel to come in at a reduced tariff or tariff-free. After that limit is reached, higher tariffs apply. The government is strengthening the TRQs for steel products implemented on June 27, 2025.
This move comes in response to both U.S. tariffs on steel and global steel overproduction, which are pushing foreign exporters to find new places to sell their steel-including Canada. Strengthening these import limits will help prevent the Canadian market from being overwhelmed with cheap steel, while still making sure Canadian businesses that rely on steel can continue to get the supply they need.
- Effective August 1, 2025, the TRQs will be extended to countries that have a free trade agreement in force with Canada, with the exception of the United States and Mexico. This will result in a 50 per cent surtax being applied on steel imports above 100 per cent of 2024 levels.
- For those countries that do not have a free trade agreement with Canada, the quota for tariff-free imports will be reduced to 50 per cent of 2024 levels. A 50 per cent surtax will be applied on steel imports exceeding this threshold.
- The government will consult with industry to finalize adjustments to other design elements of the tariff rate quotas.
Melt and Pour Tariffs
A 25 per cent surtax will also be applied on imports from all countries other than the U.S. that contain steel melted and poured in China. This will increase transparency in the domestic supply chains and help prevent circumvention of Canada's trade measures. The product scope of the surtax would align with the existing China Surtax Order on steel. This measure will be implemented before the end of July.
Strategic Innovation Fund
The government will provide up to $1 billion to the Strategic Innovation Fund to support the steel industry's transition toward new lines of business and to strengthen domestic supply chains. This investment will help the sector pivot to emerging opportunities, modernize production capabilities, and better serve the Canadian market. By fostering innovation and adaptability, this funding will build a more resilient, competitive, and sustainable steel industry for the future. Funding will be provided to support the competitiveness of Canada's steel companies by:
- Enhancing competitiveness of domestic steel companies to serve the domestic market;
- Supporting the production of steel products not currently produced in Canada;
- Supporting the production of steel products needed by strategic sectors such as defence; and,
- Anchoring the presence of steel companies that are, or would become, commercially viable in a sustained tariff environment.
Labour Market Development Agreements
The government is investing $70 million over three years for steel workers via Labour Market Development Agreements with provinces and territories.
- Supports will be developed in partnership with workers, employers and provinces and territories to retrain and upskill up to 10,000 steel workers.
- Funding will support access to targeted training, reskilling financial-related supports, and job retention programs to ensure workers can continue contributing to a resilient and competitive steel sector and in-demand jobs.
- These measures will benefit mid-career, long-tenured steel workers affected by U.S. tariffs and global market shifts.
Regional Tariff Response Initiative
In March 2025, the Government of Canada announced funding to Canada's regional development agencies so they could better support businesses impacted by U.S. tariffs. Up to $150 million of the $450 million Regional Tariff Response Initiative (RTRI) will be targeted to SME projects in the steel sector. The RTRI will be launched very shortly and more details will be available for potential applicants at that time.
Large Enterprise Tariff Loan Facility
In March 2025, the government announced the creation of Large Enterprise Tariff Loan (LETL), a new $10 billion financing facility to support Canadian companies affected by actual or potential tariffs and countermeasures.
The Large Enterprise Tariff Loan facility terms will be revised to enable the Canada Enterprise Emergency Funding Corporation to provide targeted support the steel industry. These changes include:
- Reducing the proposed initial interest rate from CORRA + 400 basis points to CORRA + 200 basis points
- Reducing the minimum annual revenue criterion from $300 million to $150 million,
- Reducing the minimum loan size criterion from $60 million to $30 million,
- Extending the loan maturity from 5 years to 7 years,
- Enabling the Canada Enterprise Emergency Funding Corporation to hold equity in companies,
- Requiring companies prioritize worker retention.
Procurement
Through changes to federal procurement processes, companies contracting with the government will be required, where possible, to source steel from Canadian companies. Companies will only be granted a Ministerial exemption if they attest in writing that no Canadian steel producer could or wants to produce the steel required. Alternatively, companies will be required to provide proof that the requirement would raise the cost to unstainable levels or delay critical equipment required by the Government for defence, national security or other key sectors.
Pivot to Grow
Launched in winter 2025, Pivot to Grow is a $500 million fund administered by the Business Development Bank of Canada (BDC) and seeks to help small and medium-sized enterprises transition to new markets and increase productivity.
