Transport Canada launches rebate for domestic steel

Transport Canada has launched a CAD $100 million rebate programme for interprovincial shipments of eligible steel products by rail and marine. The scheme will cover 50 per cent of eligible transport costs for shipments within Canada.

The Commodities Sectoral Support Program is open to shippers that pay freight rates to move eligible Canadian steel or steel products between provinces and territories. Rail support applies to interprovincial carload movements, while marine support applies to non-containerised cargo.

Applications are now open through a federal rebate portal. The programme will run for up to one year or until funding is exhausted. Only products with both a Canadian origin and a Canadian destination qualify.

The measure adds a transport component to Ottawa's broader effort to push more Canadian steel into the domestic market. The federal government is also advancing support for the forest sector following discussions with industry.

Domestic focus

The rebate is intended to lower the cost of moving steel across Canada as the government works to strengthen interprovincial trade and reinforce domestic supply chains. Ministers have presented the policy as part of a broader push to build a more self-reliant economy and reduce exposure to external trade disruption.

That direction has been in place since a package of measures announced in late 2025 for industries affected by United States tariffs and broader shifts in global trade. Those measures targeted both demand for Canadian materials and protections for domestic producers.

Under that package, Ottawa said it would tighten tariff rate quotas for steel imports from non-free trade agreement partners to 20 per cent of 2024 levels. For non-CUSMA countries that do have a free trade agreement with Canada, quota levels for steel products were to fall to 75 per cent of 2024 levels.

The government also said it would impose a global 25 per cent tariff on selected imported steel-derivative products, including wind towers, prefabricated buildings, fasteners and wires. It also promised tougher border enforcement through a dedicated steel compliance team within the Canada Border Services Agency, along with stronger detection of false declarations and an expanded reporting tool.

Another part of the plan was to end the temporary remission of Canadian tariffs on some steel imports used in manufacturing, food and beverage packaging, and agricultural production. At the time, Ottawa said the combined measures would unlock more than USD $1 billion in new domestic demand for Canadian steel.

Freight costs

The latest step follows through on a commitment in that earlier package to cut freight costs for moving Canadian steel and lumber between provinces. Instead of a direct rate reduction by railway companies, the support takes the form of a rebate covering half of eligible rail or marine transport costs.

Any entity that pays the freight rate for eligible goods can apply under the scheme. A full list of qualifying products is available through the programme portal.

By limiting the rebate to domestic movements with Canadian origin and destination points, Ottawa is directing support towards internal trade flows rather than exports. The design also limits support to specific transport modes and shipment types, excluding containerised marine traffic.

The announcement comes as governments across Canada continue to focus on long-standing barriers to trade between provinces. Freight charges can be a major factor for steel producers serving customers far from mills, particularly for heavy products that move more efficiently by rail or ship than by road.

For steelmakers, lower transport costs could improve access to construction, manufacturing and infrastructure projects in other parts of the country. For buyers, the rebate may help narrow delivered cost differences between domestic steel and imported alternatives.

The measure sits alongside other federal efforts to direct procurement and investment towards Canadian materials. Ottawa has previously said contracts worth more than CAD $25 million under its Buy Canadian Policy would prioritise domestic materials, including steel and lumber, and that the approach would also apply across federal grants and contributions programmes.

Steven MacKinnon, Minister of Transport and Leader of the Government in the House of Commons, linked the new support to shifting trade patterns and domestic demand. "Global trade is changing quickly, and Canada must adapt. Canadians are looking for more opportunities to buy Canadian products, including Canadian steel. Through this rebate, we're helping businesses strengthen their presence in the domestic market," MacKinnon said.