Canada is implementing various trade defences, which include a CAD 1 billion investment in the industry, CAD 70 million in worker retraining, enhanced financing, tightened procurement, and the launch of a CAD 500 million fund to support the transition and growth of steel SMEs.

Canada’s Department of Finance announced new trade measures to protect its steel sector on 16 July 2025 which include expanded and stricter steel import quotas and actions to address circumvention risks, in response to rising US tariffs and global overcapacity challenges.

Tariff rate quotas

  • Effective 1 August 2025, the TRQs will be extended to countries that have a free trade agreement in force with Canada, with the exception of the US and Mexico. This will result in a 50% surtax being applied on steel imports above 100% 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% of 2024 levels. A 50% surtax will be applied on steel imports exceeding this threshold.
  • The government will consult with industry to finalise adjustments to other design elements of the 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, which were implemented on 27 June 2025.

This move comes in response to both US tariffs on steel and global steel overproduction, which are prompting foreign exporters to seek new markets for their steel, including Canada. Strengthening these import limits will help prevent the Canadian market from being overwhelmed with cheap steel, while ensuring that Canadian businesses that rely on steel can continue to receive the supply they need.

Melt and Pour Tariffs

A 25% surtax will also be applied on imports from all countries other than the US 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 CAD 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, modernise 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 the 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.

Pivot to Grow

Launched in winter 2025, Pivot to Grow is a CAD 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.

Canada is implementing these trade defences alongside CAD 1 billion in industrial investment, CAD 70 million for worker retraining, enhanced financing tools, stricter procurement rules, and a CAD 500 million fund to support the transition and growth of steel SMEs.