Carney government providing an additional $1.5 billion to steel, aluminum and copper sectors in face of Trump tariffs

Joly said Canada does not know when the trade war might end, but that the government is doing everything it can in the meantime to protect jobs.

“We can’t control what’s going on south of the border, but we can control what we’re doing here at home,” she said at a manufacturing facility that creates steel parts for dump trucks in Vars, Ont. “And so, in a moment like this, we don’t just stand still, we act.” 

While the money is helpful, there are other urgent steps the government needs to take to stop the bleeding in the Canadian steel industry, said the CEO of the Canadian Steel Producers Association.

“We’re grateful for the funding, but we really need to take more steps on the market for derivative products,” said Catherine Cobden.

Derivative products include products made of steel and aluminum, not just the raw metal products. The U.S. expanded its tariff targets in November to include hundreds of products containing imported steel and aluminum and changed rules on how they apply last month to further increase the burden on manufacturers.

Since that expansion, the Canadian market has been getting hammered by imports which would have otherwise been sent to the U.S. That, said Cobden, hurts Canadian steel producers, and also their customers who make the targeted products, which include everything from sinks to strollers.

While the U.S. slapped tariffs on hundreds of products, Canada’s retaliatory list included just 61. Last month, Cobden noted, the U.S. changed how it calculated the tariff on so-called derivative products, meaning the effective rate is even higher.

“It’s time to take more steps at the border to deal with these derivative products coming in,” she said.

Canada has a 25 per cent tariff on some imported steel and aluminum products, as well as quotas on imported products to protect domestic producers.

The head of the association representing aluminum producers said it’s good to see money flowing to Canadian companies producing derivative products, but the government isn’t doing enough to stop cheap imports from flooding the Canadian market.

“We’re seeing imports from non-market-based economies. They’re taking market share away from Canadian producers because you just can’t compete on the prices that they’re charging,” said Jean Simard, CEO of the Aluminum Association of Canada. “It’s dumping.”

The head of Canada’s Automotive Parts Manufacturers Association said the cash infusion will be helpful for his hardest-hit members.

“It’s an important injection at the right time for companies with liquidity constraints that come with the acute tariff burden. It’s a useful step that many asked for and that the government heard,” said Flavio Volpe.

Conservative MP Raquel Dancho said the bigger issue is the lack of a trade deal with the U.S., which Prime Minister Mark Carney promised last year. Dancho said loans that companies will struggle to pay back are not a solution.

“Some of these loans represent a few weeks, if that, of relief, these are not long term solutions. They’re barely short term solutions so just to reiterate, today’s an admission that there is no trade deal on the horizon,” she said outside the House of Commons.

The new funding from BDC will offer companies loans of $2 million to $50 million with no interest in the first year and low interest rates in subsequent years, with no requirement to repay any principal for the first three years. Joly said the funding will help companies retool to make new products that can be sold in Canada and in non-U.S. markets. 

The new funds come on top of billions of dollars the federal government has already made available to the sectors that have been hit hardest by U.S. President Donald Trump’s tariffs. 

Last year, the government provided $500 million to Algoma Steel to help retool. The company has moved toward making steel for defence purposes, including a potential deal with one of two companies competing to build Canada’s new submarine fleet. The government funds didn’t prevent the firm from laying off nearly 1,000 employees. 

Joly said there are measures in place to ensure the money is used appropriately, but she said Canadian firms all understand the stakes of this moment. 

“Everybody is in the same fight. We’re in a trade war, we’re on the front lines and the goal is to protect workers and actually keep companies afloat,” she said.