Canada has launched a $1.5 billion relief package to support manufacturers reeling from new US tariffs on products containing steel, aluminum, and copper. Announced by Industry Minister Mélanie Joly, the initiative targets firms hit by a 25% surcharge imposed by the Trump administration in early April, a sharp shift from the previous 50% tariff applied only to the metal content.
The centerpiece of the package is a $1 billion program managed by the Business Development Bank of Canada, offering low-interest, three-year loans of up to $50 million to affected businesses. This financing aims to provide immediate liquidity to companies facing heightened export costs. Joly emphasized the urgency of bolstering the sector during a press event at a manufacturing facility southeast of Ottawa.
Additionally, the government is injecting $500 million into the Regional Tariff Response Initiative. This fund will provide grants to smaller manufacturing firms, helping them diversify product lines and adopt new technologies to mitigate the tariff impact. The combined measures reflect a dual strategy of short-term relief and medium-term adaptation for exporters seeking new markets.
The tariff changes have already delivered a severe blow to some Canadian companies. BRP Inc., a maker of recreational vehicles like Sea-Doo watercraft and Ski-Doo snowmobiles, withdrew its financial outlook for fiscal 2027 last month, citing an expected $500 million in additional costs due to the revised US policy.
Prime Minister Mark Carney remains hopeful about negotiating relief on sectoral tariffs with the Trump administration. While formal talks on revising the United States-Canada-Mexico Agreement have yet to begin, Carney signaled in April a willingness to find mutually agreeable adjustments on metal levies as part of broader trade discussions.
The $1.5 billion support package marks a critical lifeline for an industry under pressure, with the government expecting financial institutions to complement these efforts by continuing to support impacted businesses. As of now, the Business Development Bank of Canada is poised to begin disbursing loans under the new program within the coming weeks.
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