Ottawa is offering cheap loans to a sector in freefall, but even the minister in charge won't say the bleeding will stop
Canada’s steel export value has collapsed to a third of pre-Trump levels — and Ottawa is now deploying $1.5bn to keep the sector from falling further.
The federal government on Monday announced a new $1bn loan program through the Business Development Bank of Canada (BDC), alongside $500m in additional funding through the existing Regional Tariff Response Initiative, targeting steel, aluminum, and copper businesses hit by US tariffs.
The trigger, according to industry minister Mélanie Joly, was the Trump administration’s April 6 expansion of Section 232 tariffs.
The expansion imposed 50 percent duties on goods made entirely or almost entirely of steel, aluminum, and copper, and 25 percent levies on previously exempt derivative products such as steel coils and aluminum sheets.
BDC loans will range from $2m to $50m over three years, with zero interest in the first year, “very low” rates in years two and three, and no repayment required until the term ends.
The $500m regional stream is aimed at helping small and medium enterprises diversify markets and improve productivity, according to Evan Solomon, the minister responsible for the Federal Economic Development Agency for Southern Ontario.
What Ottawa cannot offer is certainty.
Whether US tariffs are permanent, Joly told reporters, is “not up to us to answer — these decisions will be taken south of the border.”
US Trade Representative Jamieson Greer reinforced that position late last month, warning that the administration is committed to tariffs and has no intention of reverting to the pre-tariff status quo, CBC News reported.
The announcement drew immediate criticism from Conservative industry critic Raquel Dancho, who called it a “band-aid solution” and “an admission that there is no trade deal on the horizon,” despite what she described as a central Liberal campaign promise.
Oversight questions also surfaced.
According to BNN Bloomberg, the federal auditor general previously found $3.5bn in pandemic-era Canada Emergency Business Account loans went to roughly 77,000 ineligible applicants.
Joly declined to detail controls for the program, saying only the government will “make sure, ultimately, that this money goes into the right hands.”
The Canadian Steel Producers Association welcomed the package but called for additional tariff action on foreign steel-derivative imports.
“The situation is evolving and more must be done,” said president and CEO Catherine Cobden.
