Ottawa offers massive aid to Canadian forestry sector, under pressure from the Trump administration

Ottawa will offer $1.2 billion in aid to forestry companies to better manage the potential damage from the Trump administration's tariffs. Quebec welcomes the offer, but hopes the money arrives quickly.

This aid will be divided into two parts: $700 million in guaranteed loans initially to ensure access to liquidity, then $500 million to help diversify wood products.

"While we will continue to work with the United States on the many mutually beneficial trade and investment opportunities, it is clear that for our prosperity, we cannot rely on what has been the most valuable trading relationship," Mark Carney said at a press conference in Kelowna, British Columbia, on Tuesday.

Under pressure

Like steel, aluminum, and other raw materials, Donald Trump has lumber in his sights, considering it a "strategic sector" for his country.

In late July, the U.S. Department of Commerce announced it would increase anti-dumping duties on Canadian lumber by about 20 percent, bringing tariffs to 34 percent.

Canada is the second-largest producer of softwood lumber in the world, with Quebec accounting for nearly a third of the total volume. Approximately 70% of Canadian exports are destined for the U.S. market.

Quebec is delighted

The announcement welcomed the Quebec Minister of Natural Resources and Forests, Maïtée Blanchette Vézina.

"Now we need federal money to get on the ground quickly. And we need to resolve the softwood lumber tariff dispute once and for all," she said.

Financial aid for the forestry sector was one of the Bloc Québécois's main issues in the last election campaign.

Chef Yves-François Blanchet is "not swooning," but "happy" that Ottawa has responded to the call. However, he considers the suggested amounts in guaranteed loans to be clearly insufficient for such a ubiquitous industry in the country.

"It's not up to the needs of the industry, and he [Carney] can do more without it costing us more," Blanchet explained in an interview.

No more wood used here

Mark Carney added that there would be "initiatives" to expand the potential international market for wood, particularly in Asia. To this end, Canada intends to emphasize the "eco-responsible" nature of wood.

Mr. Carney indicated that he intends to promote the use of Canadian wood in a variety of contexts in order to boost the industry, whether in home construction or for the major infrastructure projects that he plans to undertake in the coming years.

The United States and Canada have been at loggerheads over the timber issue since the early 1980s.

Minister Blanchette Vézina hopes that Ottawa will take advantage of the current negotiations to end this conflict once and for all.