Feds prep $1.5B tariff aid for metal producers

Canada’s federal government rolled out $1.5 billion in loans this week for companies grappling with new U.S. tariffs on steel, aluminum and copper products, a move that could adjust how mining companies position themselves in North American supply chains.

The centrepiece involves a $1-billion Business Development Bank of Canada (BDC) program targeting manufacturers and exporters that rely heavily on the metals. An additional $500 million is to flow through the Regional Tariff Response Initiative to help smaller businesses pivot their market strategies.

“This is liquidity support, 0% interest loans for the first year and then second and third year, because these are three-year loans, it will be very low interest,” federal Industry Minister Mélanie Joly told CBC News Network TV on Monday. “That will help them keep their workers, keep their suppliers and ultimately will protect them and meanwhile we’ll see where we’re at in three years, but maybe there will be in a new reality in the U.S.”

The funding responds to Washington’s April 6 tariff adjustments that expanded the number of products within their scope. That’s created cash flow pressures for some Canadian companies across the metals supply chain. Iron ore, bauxite and copper mining companies in turn face uncertainty about demand from downstream manufacturers, like steel and aluminum producers, who must absorb higher costs or find alternative markets. 

BDC plan

The April 6 U.S. tariff changes shifted duties on Canadian steel, aluminum and copper to apply to the full value of imports—with a tiered structure of about 50% on core metals and 25% on most derivatives, replacing the old system based only on metal content. 

The BDC program offers favourable financing terms for companies demonstrating tariff impacts, though specific eligibility criteria remain unclear. Regional development agencies will distribute the additional $500 million to help small and medium enterprises diversify markets and upgrade productivity.

“When markets turn unfair, Canada needs institutions that can step up and deliver fast,” BDC President Isabelle Hudon said in a release. “BDC is ready to get this money into the operations of steel and aluminum companies quickly, keeping their doors open and them producing.”

The announcement builds on Ottawa’s broader response to U.S. trade actions, including retaliatory tariffs on $15.6 billion worth of American steel and aluminum imports and new quotas limiting third-country metal imports. Mining companies must now navigate this complex web of trade restrictions while assessing how domestic policies might affect their customer base.

Responding to criticism from British Columbia Premier David Eby, Joly said the government is working on tariff relief for softwood lumber producers that’s expected to released soon. 

“He’s right,” Joly said in her CBC interview. “We need to offer the same type of conditions to the steel, aluminium and copper sectors, then to the forestry and softwood lumber. And that’s exactly why we’re working on that and we will make sure that there’s a level playing field.”