Measures to transform Canada’s softwood lumber industry

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On August 5, 2025, and November 26, 2025, the government announced supports aimed at protecting the softwood lumber industry in the face of United States duties and tariffs. These supports were to help the forest sector shift to more diversified products and new markets, including higher value-added products. Since these announcements, the following events have occurred:

  • The Canadian Forest Sector Transformation Task Force was appointed by the Honourable Tim Hodgson, Minister of Energy and Natural Resources. The eight-member group concluded their 90-day mandate (January 19–April 18, 2026) with delivery of a report and roadmap to the Minister identifying pathways to restructure, retool and transform Canada’s forest sector for long-term competitiveness and sustainability. For more information and the final report, please visit The Canadian Forest Sector Transformation Task Force.
  • In response to the Canadian Forest Sector Transformation Task Force final report, the Government of Canada is engaging with provinces, territories, and Indigenous organizations on a draft Action Plan. This will form the basis of a Forest Sector Strategy for Canada, to be announced later in 2026.
  • A new single window service, Support for forest sector employers and workers, was launched by Natural Resources Canada on December 15, 2025. The service makes it easier for forest sector businesses and employees to navigate and apply to federal programs, including providing liquidity support, assistance to workers affected by mill curtailments and closures, and programs to drive industry transformation.
  • Targeted support measures, including funding totalling $1.7 billion, have been made available in loans and loan guarantees to address immediate liquidity and operational needs of softwood lumber producers. An additional $500 million is committed to (1) renew and expand forest sector transformation programs, and (2) measures to increase demand for forest products, set out through Buy Canadian Policy and Build Canada Homes.

Federal support measures

  • $700 million in loan guarantees to help companies confront immediate pressures facing the softwood lumber sector, which will give the sector needed liquidity to maintain and restructure, if necessary, their operations. This will be delivered through the Business Development Bank of Canada (BDC) and will be accessible via firms’ existing financial institutions.
  • $500 million to supercharge product and market diversification and make the industry more competitive globally, delivered through Natural Resources Canada’s suite of forest industry transformation programs starting in the 2026–2027 fiscal year. These programs include the Forest Innovation Program, Investments in Forest Industry Transformation, Green Construction Through Wood, the Indigenous Forestry Initiative, the Global Forest Leadership Program and its precursor Expanding Market Opportunities program, and the Forest Systems Information and Technology Enhancement program.
  • Prioritizing the adoption of Canadian materials—including mass timber and softwood lumber—in construction and changing federal procurement processes to require companies contracting with the federal government to source Canadian lumber.
  • $50 million over three years, led by Employment and Social Development Canada, to help reskill and support more than 6,000 affected forest workers through Labour Market Development Agreements. The Supports will be provided by:
    • Encouraging employers to use Employment Insurance (EI) Work-Sharing to avoid layoffs and to access training for participating workers;
    • Proactively contracting EI recipients from the forest sector to offer tailored training opportunities; and
    • Supporting access to retrain employed workers or those at risk of unemployment, enabling retention within their current firm or transition to other in-demand jobs, such as those in the skilled trades
  • Other measures underway to reduce costs and protect jobs include:
    • Cutting interprovincial freight rates for lumber by 50% starting in spring 2026;
    • Allocating $50 million for upskilling and reskilling affected softwood lumber workers; and
    • Providing an additional $100 million for work sharing and training across various sectors affected by tariffs, including the forest sector.

The BDC website contains additional information on the Softwood Lumber Guarantee Program. Links to support for product and market diversification funding and worker support will be shared on this page as they become available.

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For more information on the various federal measures available to support the forestry sector and its workers, please submit a request form online.

 
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