Photo: Woodworking
The Business Development Bank of Canada (BDC) will deliver $700 million in loan guarantees to help companies.
Prime Minister Mark Carney announced a $1.25 billion aid package to support the softwood lumber sector this summer as it faces increasingly challenging operational constraints. As part of that support the Business Development Bank of Canada (BDC) will deliver $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.
These loans will be accessible via firms’ existing financial institutions.
BDC will provide guarantees to the financial institutions of eligible softwood sawmills, lumber mills and remanufacturers. These guarantees can be used to access financing and letters of credit, which can help offset the financial strain of collateral or bonds related to duty payments. BDC emphasized the program is not intended as a cure-all for the sector’s considerable challenges, but rather act as a complementary tool with other financial options and government support programs to help these businesses continue to operate and better manage through an ever-evolving situation.
Multi-pronged approach
The government package to transform the softwood lumber industry also includes $500 million to supercharge product and market diversification and make the industry more globally competitive. 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.
In addition, there will be prioritization in 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 as well as a $50 million fund over three years, led by Employment and Social Development Canada, to help re-skill and support more than 6,000 affected forest workers through Labour Market Development.
