A Comprehensive Aid Package to Strengthen Canada’s Forestry Industry
On August 5, 2025, Prime Minister Mark Carney unveiled a sweeping $1.25 billion aid package designed to bolster Canada’s softwood lumber sector. This announcement comes amid ongoing challenges, particularly from U.S. tariffs, which have strained the industry for years.
Addressing Immediate and Long-Term Challenges
The package is divided into four key pillars, targeting immediate financial relief, long-term competitiveness, and support for workers and communities. The measures aim to stabilize the sector, modernize operations, and ensure its sustainability in the face of trade uncertainties.
$700 Million in Loan Guarantees
To address financial pressures, the government is offering $700 million in loan guarantees. This funding will help lumber mills and manufacturers maintain liquidity, enabling them to continue operations and adapt to changing market conditions. The initiative also seeks to prevent supply chain disruptions and ensure stability for the construction sector.
$500 Million for Product and Market Diversification
Another $500 million is allocated for diversifying products and markets. This funding will support the production of value-added wood products, such as engineered wood, mass timber, and low-carbon materials. Additionally, it will help expand both domestic and international markets, with a focus on Indigenous-led forestry businesses.
Procurement Policy Overhaul
The federal government is updating its procurement rules to prioritize Canadian softwood lumber in all federal construction projects. This “Build Canadian” approach aims to boost domestic demand, supporting the industry while advancing Canada’s housing and infrastructure goals. Provinces like British Columbia, Ontario, and Quebec are also updating building codes to promote the use of mass timber.
$50 Million for Worker Support
Recognizing the human impact of industry changes, $50 million is dedicated to reskilling and upskilling programs for over 6,000 workers. These initiatives, delivered through Labour Market Development Agreements, include enhanced Employment Insurance benefits to help workers adapt to evolving technologies and business models.
Strategic Objectives and Broader Implications
The measures are designed to help the Canadian softwood lumber sector navigate current and future trade challenges. By reinforcing financial stability and investing in innovation, the plan aims to prevent supply shocks and promote sustainable production practices. The updated procurement strategy not only supports local producers but also aligns with the federal government’s ambitious goals for affordable housing and climate action.
Industry Response
Major industry organizations, such as the BC Council of Forest Industries (COFI), have welcomed the announcement as timely relief. However, stakeholders emphasize that resolving the ongoing U.S. trade dispute remains a critical priority for the sector’s long-term success.
