The Canadian government has pledged to rely extensively on domestically produced construction materials and products for its envisioned infrastructure building boom. A newly unveiled three-pronged strategy to support the beleaguered steel industry also promises new restrictions on steel imports and financial assistance for manufacturers and workers.
“Our steel industry will be central to Canada’s competitiveness, our security and our prosperity,” Prime Minister Mark Carney maintains.
It’s proposed the government will wield its influence to “ensure” Canadian steel and other construction materials are “prioritized” for major infrastructure projects and home building. New rules for government procurement will also require contractors to source steel from Canadian companies wherever practically possible. Exceptions would only be granted if contractors can show that no Canadian suppliers are capable or willing to meet project specifications or that the use of Canadian steel would escalate costs prohibitively or delay the delivery of equipment or projects related to defence, national security or other national imperatives.
“By prioritizing Canadian steel and other materials in our projects, we are taking important steps to prioritize Canadian suppliers, protect well-paying jobs, strengthen our supply chain and support our industry in the face of unjustified U.S. tariffs,” says Joël Lightbound, Canada’s Minister of Government Transformation, Public Works and Procurement.
The directives related to steel follow just days after a new interim policy on reciprocal procurement came into effect for Lightbound’s department, Public Services and Procurement Canada (PSPC). As of July 14, prospective bidders may be blocked from access to federal tenders if they are based in a country where Canadian companies face restrictions or are prevented from bidding on government contracts. This replaces the heretofore open-by-default procurement system, in which foreign bidders were only barred if they were subject to international sanctions or other specified policies or conditions.
“The policy on reciprocal procurement will help leverage our purchasing power to support Canadian businesses and workers impacted by unjustified American tariffs,” Lightbound says.
The newly announced restrictions on steel imports lower the threshold for the application of tariffs and introduce a new measure. A 50 per cent tariff will apply on incoming steel and steel products from countries with which Canada has no free trade agreement once imports surpass 50 per cent of 2024 levels. The same 50 per cent tariff will apply on steel imports from countries with which Canada has a free trade agreement once they surpass 100 per cent of 2024 levels, with the exception of Mexico and the United States.
“Existing arrangements with our CUSMA partners will remain the same, including no changes to our current trade measures with the U.S.,” a release from Prime Minister Carney’s office states. “Canada will reassess its existing trade arrangements with respect to steel, consistent with progress made in the bilateral discussions with the U.S. and taking into account broader steel negotiations.”
As well, an additional 25 per cent tariff will be applied on steel imports from all countries, except the U.S., that contain steel that has been melted or poured in China before Aug. 1, 2025.
