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OTTAWA — The federal government is committing up to $1.5 billion to Canadian businesses struggling under the weight of U.S. tariffs, especially in the steel, aluminum and copper industries where the Trump administration recently increased the burden.
New calculations: On April 2, U.S. President Donald Trump overhauled how the Section 232 tariffs apply to steel, aluminum, copper and derivatives of those metals. One of the changes that took effect April 6 means the 50 per cent tariffs are now calculated on the full customs value of those goods, rather than just the portions made of steel, aluminum or copper.
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Low-interest loans: To help them respond to the bigger tariff burden, the Business Development Bank of Canada (BDC) launched a $1-billion loan program Monday for firms that make and export goods to the U.S. that contain steel, aluminum or copper. “Should Canada one day be in conflict, we need to be having these capabilities,” Industry Minister Mélanie Joly said.
The BDC will lend between $2 million and $50 million to firms with at least $5 million in annual revenue with “material exposure” to U.S. tariffs. Spokesperson Phil Taylor said “material” in this case means at least 20 per cent of a company’s revenue is subject to tariffs, or that tariff payments are eating up at least 10 per cent of the money coming in. The three-year loans are interest-free in the first year, with no payment on the principal required until the term is up. BDC will charge the prime rate in the second year and prime plus two in the third.
Not just metals: The federal government announced another $500 million through Canada’s regional development agencies to help small- and medium-sized businesses from all sectors hit by U.S. tariffs. Joly said Ottawa is working on offering similar access to cash through the BDC for businesses in the softwood lumber and forestry industries, which are also hit with tariffs—including countervailing and anti-dumping duties stemming from a decades-long bilateral dispute. In the meantime, she said the regional development funding would be available to them too.
The response: The Mining Association of Canada noted the support was mainly for downstream parts of the metals sector. Vice-president Photinie Koutsavlis acknowledged in a statement that it will help stabilize demand for the mining industry’s output, but called for “complementary measures to support domestic copper production and processing, particularly given intensifying global competition for investment.”
Catherine Cobden, president of the Canadian Steel Producers Association, said in a statement the funding is “essential to help pivot and realign our businesses to ensure our long-term competitiveness as we navigate this ongoing trade war,” but urged Ottawa to do more to protect the domestic industry from foreign imports.
Conservative industry critic Raquel Dancho said Canadian businesses need the Liberal government to secure a deal with the Trump administration more than they need short-term liquidity and more debt. “These are not long-term solutions,” she told reporters outside the House of Commons. “They’re barely short-term solutions.”
This story has been updated with additional reaction to the announcement.
