Families forced to rebuild their homes after wildfires devastated Fort McMurray, Alta. last spring will be compensated for having to pay duties on drywall coming into Canada from the United States

Federal Finance Minister Bill Morneau made the announcement Monday in front of a home that's being rebuilt in Fort McMurray.

"This is part of our ongoing effort to be of assistance at a time of real challenge in Alberta," Morneau said. "We know that Alberta families have been hard hit."

The Liberals will reduce anti-dumping duties on imported drywall from the U.S. into Western Canada by 32 per cent.

The government will also direct $12 million in anti-dumping duties collected between September 2016 and January 2017 towards a grant for Fort McMurray residents who are rebuilding after the May 2016 wildfire.

Morneau Fort McMurray

Federal Finance Minister Bill Morneau announced Monday in front of a home that's being rebuilt in Fort McMurray, the federal government will help make dry wall cheaper for Fort McMurray families rebuilding after May's wildfire. (David Thurton/ CBC)

The grant will also help builders and contractors in Western Canada who were adversely affected by higher drywall prices.

Morneau said the government's announcement is response to a trade panel ruling that called on Ottawa to cut duties imposed on drywall products being imported into Western Canada from the U.S.

The Canadian International Trade Tribunal (CITT) ruled last month that while U.S. firms had dumped drywall at cut-rate prices in Canada over the past few years, maintaining duties at current levels would not be in the country's trade interests.

Canadian construction firms have complained the tariffs on U.S. drywall make it more expensive to build homes out of the material, also known as gypsum board, and were hampering efforts in Fort McMurray to recover from last year's wildfire.

Fort McMurray Mayor Melissa Blake had asked the federal government to offer grants to offset the impact of the drywall duties, noting that low oil prices have hurt the city's economy and resulted in numerous layoffs.

The community lost 1,800 single-family homes and dozens of other structures in the wildfire.

The duties, imposed last September, followed a dumping complaint by French-owned CertainTeed Gypsum Canada, the last drywall manufacturer in Western Canada with plants in Vancouver, Calgary and Winnipeg, and at two gypsum quarries, one in B.C. and one in Manitoba.

With files from David Thurton and the Canadian Press