The Stelco Hamilton Works steel mill, owned by Cleveland-Cliffs, operates in Hamilton, Ontario, Canada.
Canada’s steel industry, among the sectors hit first and hardest by US President Donald Trump’s tariffs, is starting to turn a corner thanks to an uptick in mining, energy and AI data center projects as well as government support, although the impact has not been even across the country.
While Canada is a small producer globally and steel contributes less than 1% to national GDP, it is one sector in which Prime Minister Mark Carney’s efforts to make Canada’s economy less reliant on the United States appear to be having some success, albeit with a heavy dose of government intervention.
Steel companies have been diversifying away from the US and focusing on domestic demand since Trump increased tariffs on imported steel from 25% to 50% in June 2025, steelmakers, analysts and union representatives said.
Canada used to send around 90% of its steel exports to the US, but shipments plummeted by 60% in 2025, according to the Canadian Steel Producers Association. Hundreds of steelworkers have been laid off.
But the share of steel used in Canada that was produced domestically rose to 51% in 2025, up from 41% in 2024, according to United Steelworkers, the sector’s main labour union.
The import share declined from 59% to 49%. USW calculated the data based on World Steel Data and Canada’s imported steel data, said Guio Jacinto, an economic researcher for the union.
The green shoots are mostly appearing in western Canada, where some large industrial projects including a 1.2 gigawatt data center in Saskatchewan are under construction. Carney said a new oil pipeline to the Pacific Coast would also boost demand for steel.
Canadian steel demand is estimated to have grown around 2.7% in 2025 and is projected to increase by about 0.9% in 2026, according to ?an OECD report published in July.
“What we are seeing right now is that more Canadian companies are competing for domestic market, which means there is less space for steelmakers from outside,” said David Fritz of Alberta-based Supreme Steel, which manufactures fabricated steel.
“I feel optimistic for the outlook of fabricated steel market in Canada, there are enough projects in pipeline to support this industry,” Fritz added.