Open this photo in gallery:
Sections of a dumpster are welded together on the assembly line of Les Ateliers Beau Roc in Vars, Ont., on Monday.Spencer Colby/The Canadian Press
The federal government is offering $1.5-billion in tariff relief for manufacturers after recent changes to protectionist U.S. levies on metal imports deepened the pain for many Canadian businesses.
Industry Minister Mélanie Joly and Digital Innovation Minister Evan Solomon on Monday announced a new $1-billion Business Development Bank of Canada (BDC) program to extend no-interest and low-interest loans to industries that manufacture and export products containing steel, aluminum or copper.
They said in a statement the financing assistance is intended to provide “rapid liquidity to viable businesses facing significant economic challenges.”
The ministers cited changes to existing U.S. tariffs on steel, aluminum and copper April 6 that increased the pain on Canadian manufacturers already struggling with rising costs and uncertain access to the American market.
“We’re in a trade war. We’re on the front lines, and the goal is to protect workers and actually keep companies afloat,” Ms. Joly said at a press conference at Les Ateliers Beau-Roc dump truck manufacturing facility in Vars, Ont.
Industry Minister Mélanie Joly unveiled new support for companies hit by U.S. President Donald Trump’s expanded tariffs on metals.
The Canadian Press
The opposition Conservatives, however, called the assistance a “Band-Aid” solution and an admission that no trade deal with the United States is coming soon.
“You’ll recall that one year ago, the Carney Liberals were elected on the sole promise that they were going to deliver a trade deal for Canadians to provide our workers the relief that they needed,” Conservative industry critic Raquel Dancho said.
B.C. Premier David Eby criticized Monday’s aid because it didn’t include forestry workers hurt by U.S. duties on softwood that have risen sharply in the last year.
“Everybody woke up this morning to the news that the federal government is allocating $1.5-billion for tariff affected industries,” Mr. Eby said. “So naturally, I flipped eagerly to find the page on softwood lumber, and unfortunately found that, yet again, softwood lumber has been left off the list as a tariff-affected industry,” he told reporters.
“I don’t know what it’s going to take, really, to get the bureaucrats and the ministers in Ottawa to recognize that softwood lumber employs more people in Canada than steel and auto parts combined.”
Ms. Joly said Ottawa is in conversation with the forestry industry about future aid.
Open this photo in gallery:
Industry Minister Mélanie Joly speaks at Les Ateliers Beau Roc in Vars, Ont., on Monday.Spencer Colby/The Canadian Press
Asked whether she believes the U.S. tariffs will ever be removed, the Industry Minister couldn’t say. “I don’t know,” she said. “These decisions will be taken south of our border.”
The BDC aid to business will be three-year loans worth between $2-million and $50-million, Ms. Joly said. For the first year, there will be no interest, followed by “very low rates” for years two and three, she said, with repayment due at the end of the third.
She said the federal government would ensure the repayable loans are spent on things that benefit workers.
In April, the U.S. ratcheted up the pressure on Canadian industry by beginning to levy a 25-per-cent tariff on the entire value of imported “derivative” goods made of steel, aluminum and copper – a category that includes hundreds of products, from industrial equipment to household appliances.
Previously, Washington had applied a 50-per-cent tariff to derivative goods, but only on the value of the metal inside the product, which often accounts for a small portion of the total value.
For smaller companies in the steel sector, particularly those in Western Canada, there is little expectation much of the support funding will get to them.
“All the government bailouts are a complete waste of money,” said David Koss, the president of Winnipeg-based Hunter Wire, a manufacturer of steel wire products including rink chairs that support refrigeration pipes under artificial ice throughout North America. “Most of that money is going to first tier, multinational steel producers located in southern Ontario and Quebec that are still laying people off, it isn’t making its way down to companies like mine that are heavily impacted by the tariffs.”
He said he’s working with his U.S.-based customers to understand the impact of the April tariff changes.
“It’s frustrating and stressful because as a business owner you have a lot of different battles you face on a daily basis,” he said, pointing to the overnight destruction of $5,000 worth of heating equipment by thieves who made off with $50 worth of copper.
As it announced this money, Ottawa called on banks to help.
“The government expects Canada’s financial institutions to continue to work with the businesses as we lean in collectively to support this sector,” the ministers said in a statement.
In addition, the government is providing an additional $500-million through its existing Regional Tariff Response Initiative to support tariff-affected businesses in all sectors of the Canadian economy.
With reports from Mark Rendell and Jason Kirby
