In a policy pivot that signals a sharper focus on domestic manufacturing, Mark Carney, the Liberal economic advisor and former Bank of Canada governor, has voiced strong support for safeguarding Canadian steel and lumber industries against foreign competition. Speaking at an event in Hamilton, Ontario—Canada’s steel heartland—Carney laid out a vision that challenges decades of free-trade orthodoxy.
“We’ve moved from a world of interdependence and efficiency to one where resilience matters,” Carney told industry leaders gathered at Stelco’s facilities. “Canada needs to rebuild its industrial backbone, starting with steel and lumber—the literal building blocks of our economy.”
The timing couldn’t be more politically charged. With the Liberals trailing in polls and manufacturing towns feeling the squeeze from cheaper imports, particularly from China and other Asian producers, Carney’s comments suggest a strategic recalibration. His remarks echo similar protectionist sentiments gaining traction globally, from Washington to Brussels.
Steel industry executives at the event welcomed Carney’s words. “For years, we’ve faced a tilted playing field,” said Catherine Cobden, president of the Canadian Steel Producers Association. “Foreign steel often doesn’t meet our environmental standards but undercuts our prices. Recognizing this isn’t just about jobs—it’s about national security.”
Carney’s approach represents what economists call “managed trade”—a controlled departure from pure free-market principles. Under this model, targeted tariffs, domestic procurement requirements, and carbon border adjustments would help shield Canadian producers from competitors operating under less stringent environmental regulations.
The forestry sector stands to gain significantly as well. British Columbia’s lumber producers have weathered repeated disputes with the U.S. while simultaneously facing dwindling access to timber due to conservation efforts and wildfire impacts. “We’ve been caught in a perfect storm,” noted Susan Yurkovich of the BC Lumber Trade Council. “Regulatory certainty at home combined with fair trade abroad would be transformative.”
What makes Carney’s stance particularly notable is his history as a champion of globalization during his tenure at the Bank of England and Bank of Canada. His apparent evolution mirrors broader policy shifts occurring worldwide as supply chain vulnerabilities exposed during the pandemic continue to reshape economic thinking.
The proposed approach isn’t without critics. Trade economists point to potential retaliatory measures from trading partners and higher costs for Canadian consumers. “Every time you protect one industry, you raise costs for others,” cautioned Trevor Tombe, economist at the University of Calgary. “Steel tariffs mean more expensive buildings, machinery, and vehicles.”
Others question whether the timing indicates political opportunism rather than sound economic strategy. Conservative MPs have already labeled the move as “election posturing” rather than substantial policy.
Yet manufacturing communities see reason for hope. Hamilton, once nicknamed “Steel City,” has experienced decades of industrial decline despite recent reinvestments. Local union representative Mickey Mercanti views the policy shift positively: “We’re not asking for handouts—just a level playing field. Our workers meet world-class standards while foreign competitors often skirt environmental and labor regulations.”
The question of climate policy looms large in this discussion. Carney, who has built much of his post-central banking career around climate finance, argues that Canadian steel and lumber industries are actually cleaner than many foreign competitors. “Our steel produces about half the carbon emissions per ton compared to Chinese steel,” he noted. “Choosing Canadian products often means choosing the climate-friendly option.”
This environmental angle gives the Liberals a potential path to square their industrial policy with climate commitments—a balancing act that has proven difficult across Western democracies.
Implementation details remain sparse, though sources suggest a comprehensive manufacturing strategy could emerge before year’s end. Any such plan would likely include carbon border adjustments, expanded government procurement requirements for Canadian materials, and targeted infrastructure investments in manufacturing communities.
The economic stakes extend beyond the industries directly involved. Steel and lumber represent cornerstone inputs for construction, automotive manufacturing, and infrastructure—sectors that collectively employ millions of Canadians. The ripple effects of stronger domestic production could strengthen supply chain resilience across multiple industries.
For communities like Nanaimo, British Columbia, or Sault Ste. Marie, Ontario, where mills and factories form the economic foundation, the policy direction signals potential revival. “When we lose these jobs, we don’t just lose paychecks—we lose entire communities,” observed Mayor Christian Provenzano of Sault Ste. Marie.
The timing aligns with similar moves internationally. President Biden’s Inflation Reduction Act has pumped billions into American manufacturing while the European Union advances its own industrial policy to counter Chinese state capitalism.
Whether Carney’s vision translates into effective policy—and whether it arrives in time to help the struggling Liberal government—remains uncertain. What’s clear is that Canada appears ready to join the global shift toward economic nationalism in strategic sectors, ending decades of unfettered faith in globalization’s promise.
For workers in communities that have watched manufacturing jobs disappear overseas, that shift can’t come soon enough.
