Liberal Procurement Minister Joël Lightbound announced that the federal government's new “Buy Canadian” policy takes effect Tuesday.Announced in the fall, the policy mandates the use of domestically produced materials in major public projects to bolster Canadian industries hit hard by global trade disruptions.The policy — a commitment from Budget 2025 — prioritizes Canadian suppliers and content in contracts over $25 million, with expansions planned for smaller thresholds by spring 2026.It specifically targets the steel, aluminum, and wood sectors battered by the Trump administration’s 50% tariffs on Canadian exports, which have slashed overseas sales and forced mill closures.“Effective today, large federal construction and defence projects valued at $25 million or more will be required to use Canadian-produced steel, aluminum, and wood products where domestic supply is available,” Lightbound told the media on Tuesday.“This material must be manufactured or processed in Canada, not just sold by distributors, to ensure that federal projects genuinely drive demand for Canadian-made material. This new policy applies across federal departments and agencies and will apply to Crown corporations, grants, and contribution programs of the federal government.”Lightbound went on to say that the policy will be used as an economic development tool to help strengthen supply chains, create jobs, and help domestic businesses compete globally..These measures come after tighter import restrictions were announced last month by Prime Minister Mark Carney, including reducing tariff-rate quotas (TRQs) on foreign steel starting on Dec. 26, down to 20% of 2024 levels for non-FTA countries and 75% for FTA partners.Steel producers have hailed the protections, with the Canadian Steel Producers Association stating that the prime minister’s leadership in strengthening access to the domestic market” and “enabling Buy Canadian is deeply appreciated.”Yet it remains to be seen if this policy will have any lasting effects or if it will just paper over the economic cracks.In a social media post on Tuesday, Carney said the approach will help the federal government “build Canadian” by becoming its own “best customer.”Critics will be questioning that statement, asking how Canada will be its best customer if it can’t even supply itself with the desired products.Algoma Steel in Sault Ste. Marie recently announced 1,000 layoffs — 40% of its workforce — and the closure of its blast furnace, accelerating a shift to electric arc furnaces amid plummeting U.S. exports.That move follows $500 million in federal and provincial financing secured just weeks earlier..However, Algoma released a statement on X, saying it was “very encouraged to learn more details of the federal Buy Canadian policy and especially that it takes effect today.”Algoma went on to say that the policy, “coupled with [Carney’s] ambitious Build Canada Agenda, means that our country will continue to have a strong domestic steel industry long into the future.”D.T. Cochran, a senior economist with the Canadian Labour Congress, has previously stressed the need for a viable domestic industry but warned of “hyper-specialization” issues.“Canada needs a domestic steel industry; how do we have one that can operate in the best way for Canadians?” Cochran told CTV News earlier this month.“We need leadership from the federal government... It’s not as simple as just saying, ‘buy domestic’ because of the issue of hyper-specialization.“Now these producers are going to have to produce all the different kinds of steel needed in Canada, and that’s a major challenge.”.Carney pushes Buy Canadian policy to boost domestic industry.The lumber industry is also facing similar headwinds despite the promise of increased federal demand and protections.Just recently, Vancouver-based West Fraser Timber Co. Ltd. announced plans to indefinitely curtail operations at its High Level mill in northern Alberta come spring 2026, after winding down existing log supplies — a move that will affect 190 workers, though the company says it will attempt to redeploy them elsewhere.Last month, West Fraser also confirmed the permanent closure of its lumber mill in 100 Mile House, BC, by the end of 2025, citing insufficient access to economically viable timber, compounded by soft demand, higher duties, and tariffs.That shutdown will directly impact 165 jobs in a community of 2,000 that serves a broader region of 20,000, with local Mayor Maureen Pinkney warning of at least 500 additional indirect job losses.West Fraser isn’t the only company cutting back, Domtar announced the permanent closure of its Crofton pulp mill on Vancouver Island, eliminating around 350 positions amid poor pulp pricing and fibre supply challenges.While Ottawa rolls out its “Buy Canadian” policy with the hope of stimulating domestic sales and use of homegrown materials, the resource sector will be wondering if it can offset lost export revenues and sustain thousands of domestic jobs along the tough road ahead.
