June 29, 2018—Ottawa, Ontario— Global Affairs Canada
Canada’s steel and aluminum industries have made North American steel and aluminum more competitive around the world. It is inconceivable and completely unacceptable to view any trade with Canada as a national security threat to the United states.
The U.S. has a US $2 billion annual trade surplus on iron and steel products with Canada. Canada buys more American steel than any other country in the world, accounting for 50 per cent of U.S. exports. Canadian steel is used in American tanks, and Canadian aluminum in American planes. Indeed, Canada is recognized in U.S. law as part of the U.S. National Technology and Industrial Base related to National Defence.
Today the Government of Canada announced that in direct, measured and proportional response to U.S. tariffs on Canadian steel and aluminum, reciprocal surtaxes on $16.6 billion of imports of steel, aluminum and other products from the United States will come into effect July 1, 2018.
Canada continues to work towards full and permanent removal of these unjustified and illegal U.S. tariffs.
In addition, the Government of Canada will make available up to $2 billion to defend and protect the interests of Canadian workers and businesses in the steel, aluminum and manufacturing industries. This includes a comprehensive set of measures:
- Extending the duration of work-sharing agreements by 38 additional weeks under the Employment Insurance program to help employers retain their skilled workforce and avoid layoffs during challenging times.
- Increasing funding to the provinces and territories to increase the capacity of the job and training programs available to workers affected by the U.S. measures.
- Providing liquidity support to affected businesses.
- Offering up to $250 million in new support through the Strategic Innovation Fund to help bolster the competitiveness of Canadian manufacturers and better integrate the Canadian supply chain of steel and aluminum.
- The Government of Canada will invest $50 million over five years to help Canadian companies diversify their exports to take advantage of new trade agreements, such as CETA and CPTPP. Working in partnership with business associations, this will include new "export readiness" grants.
We continue to monitor the trade situation closely. Canada has already taken steps to address diversion and dumping into the Canadian market and will work with all affected stakeholders on next steps to protect our workers and companies. We know there is a risk that imports will continue to increase, harming Canadian steel producers. This is unacceptable. In particular, in the case of energy tubular, steel plates and rebar products, we will work with stakeholders in the coming weeks on an appropriate response, including safeguards.
“Canada has always been a safe, secure and reliable source of steel and aluminum for the U.S. market. The tariffs introduced by the United States on Canadian steel and aluminum are protectionist and illegal under WTO and NAFTA rules—the very rules that the United States helped to write. It is with regret that we take these countermeasures, but the U.S. tariffs leave Canada no choice but to defend our industries, our workers and our communities, and we will remain firm in doing so. The real solution to this unfortunate and unprecedented dispute is for the United States to rescind its tariffs on our steel and aluminum.”
- Hon. Chrystia Freeland, P.C., M.P., Minister of Foreign Affairs
“The Government of Canada supports our country’s steel and aluminum workers and their families. We’re taking strong responsive measures to defend them. That includes new extended work-sharing, to help employers avoid layoffs, and increased capacity for job and skills training programs for any workers who need them.”
—Hon. Patty Hajdu, Minister of Employment, Workforce Development and Labour
“The measures announced today will help strengthen the competitiveness of Canada’s steel and aluminum companies and contribute to economic growth while increasing the capacity of the industries to innovate, grow value added, support product and market diversification, and create and sustain jobs for Canadians.”
- Hon. Navdeep Bains, P.C., M.P., Minister of Innovation, Science and Economic Development
“Canada’s aluminum and steel industries are vital to our economic prosperity and support well-paying middle class jobs. Our government stands shoulder-to-shoulder with our workers and the innovative, world-class products they produce. Working in partnership with industry and business associations, we will provide capacity support to assist Canadian companies tap into the new markets now uniquely open to them in Europe, Asia and around the world.”
- Hon. François-Philippe Champagne, Minister of International Trade
- In 2017, the Canadian steel industry employed more than 23,000 Canadians and contributed $4.2 billion to Canada’s gross domestic product (GDP).
- The Canadian aluminum industry employed 10,500 workers while contributing $4.7 billion to Canada’s GDP.
- Canada buys more American steel than any other country in the world, accounting for 50% of U.S. exports. In 2017, about US$14 billion of steel was traded between Canada and the United States.
- On aluminum, Canada and the U.S. share a highly integrated market with combined trade of more than US$11.4 billion annually.
- About 84% of Canada’s primary aluminum production is exported to the United States, where it is used as an important input for further processing into products for U.S. domestic and export markets.
- The Government of Canada has invested $50 million over five years to help Canadian companies diversify their exports to take advantage of new trade agreements, such as CETA and the CPTPP.
As part of the response, BDC will make available a commercial financing envelope of up to $800 million over two years for eligible steel and aluminium small and medium-sized enterprises (SMEs). This support is intended to help steel and aluminium SMEs with viable business strategies navigate through the market turbulence. This financing could help companies expand into new markets, increase operational and environmental efficiency, or purchase new technology and equipment.
Support for Canadian steel and aluminum workers and industry
Frequently Asked Questions
In response to turbulence in the steel and aluminium global markets, BDC is offering commercial financing and advisory solutions to help create new opportunities for Canadian steel and aluminum SMEs
1. What is BDC doing to support the sector?
BDC has made available a commercial financing envelope of up to $800 million over two years for eligible steel and aluminium small and medium-sized enterprises (SMEs). This support is intended to help steel and aluminium SMEs with viable business strategies navigate through the market turbulence. The Bank also offers advisory services to help businesses operate more efficiently and profitably.
2. What can the financing be used for?
Financing can be used to help your company expand into new markets, increase operational and environmental efficiency, or purchase new technology and equipment.
3. Who is eligible for financing? What is a viable company?
While a viable business can be subject to credit deterioration caused by the market turbulence, eligible companies need to have a plan to adjust to the new business environment and management capacity to execute the plan. The company also needs to have a relatively strong balance sheet. Other conditions may also apply.
4. What exactly are the services that BDC is providing? Are they tailored?
BDC’s services are always tailored to the needs of each client. Relevant BDC products can be summarized into two dynamics: Loans and advisory services.
5. I think my business is a fit for this initiative. Who should I reach out to?
If you are already a BDC client, please contact your BDC representative. If you are not yet a client and wish to discuss your financing or advisory needs, please contact BDC at 1-877-232-2269 or write to firstname.lastname@example.org.
6. Where can I find additional information about export financing and insurance solutions including?
IEDC can help you export with confidence through a range of financing and insurance solutions to increase your access to working capital and mitigate risks. To learn how EDC can help you, call 1-888-220-0047 or write to email@example.com.