Could major Canadian projects revitalize the steel and aluminium industries?

Industries that have long been focused on the U.S. market

The Canadian steel and aluminium industries have grown within a highly integrated North American market. Just over 50 percent of Canadian steel production is exported to the United States. This proportion rises to about 90 percent for aluminium. Canada also supplies more than half of the primary aluminium consumed in the United States, making it the leading foreign supplier of this metal.

Canadian aluminium exports by destination

For a long time, this integration was a major advantage: it meant short supply chains, geographic proximity, interconnected markets and stable U.S. demand. However, this proximity can become a vulnerability when trade conditions change abruptly.

This is what has happened since tariffs were imposed on steel and aluminium, first in 2018 and 2019, and again in 2025.

For Canadian companies, these tariffs go beyond passing on higher costs to customers. They result in delayed or canceled contracts, squeezed margins, increased uncertainty around orders and disruptions to North American supply chains. 

Fundamentally, they call into question an economic model historically based on privileged access to the U.S. market.

“Buy Canadian” to the rescue

In response to the challenges facing the industry, the federal government introduced a “Buy Canadian” policy to give priority to Canadian suppliers and certain materials in its procurement process. It applies to contracts over $5 million to prioritize Canadian goods and services, and to contracts over $25 million to use Canadian materials, including steel and aluminium. 

In addition, the government has committed to launching a procurement program for small and medium-sized enterprises (SMEs) to increase their access to federal markets.

At the same time, Ottawa announced $1.5 billion in support for sectors affected by U.S. tariffs in May 2026. This funding package notably includes a $1 billion BDC program for companies that manufacture or export products containing steel, aluminium, or copper, as well as $500 million for the Regional Tariff Response Initiative.

This additional support is a game changer for the steel and aluminium industries, which are now becoming central components of Canada’s industrial strategy, particularly in infrastructure, defense, energy, transportation and public buildings. 

However, support for businesses is not enough. For “Buy Canadian” to translate into actual demand, major projects must move forward. 

An additional $3.6 billion to the GDP between 2026 and 2030

We conducted a study with The Transition Accelerator to assess the economic impact of investments in major Canadian infrastructure, energy, defense and transportation projects. 

When applied to the steel and aluminium industries, our analysis shows that the combined GDP of these two industries could reach $13.1 billion by 2030 in a scenario that includes major projects: $7.9 billion for steel and $5.3 billion for aluminium. In comparison, their combined GDP would be $12.1 billion in 2030 under the baseline scenario.

We estimate that major Canadian projects could add approximately $3.6 billion in total GDP between 2026 and 2030, including $2.9 billion for steel and $631 million for aluminium. In 2030, for example, about $980 million of GDP is expected to come directly from these projects, showing their key role in the growth of both sectors.

Impact of major projects on GDP in the aluminium and steel industries in 2030 (in millions of dollars)

For SMEs, these data show that major projects could increase demand for steel- and aluminium-related products and services in the coming years. The construction sector could play a central role in helping deliver these benefits.

Turning opportunities into revenue

The launch of major projects does not automatically guarantee increased revenue for companies in the sector. The main challenge will be to turn this growth across sectors into profitable contracts and completed projects.

Canadian manufacturing and processing companies can strengthen their market position by continuing their efforts to meet the volume, timeline, and technical specification requirements of major projects. A “Buy Canadian” policy can support demand, but the ability to deliver efficiently and at scale remains a key factor for success.

SMEs can consolidate their competitive advantage by controlling costs, improving productivity and modernizing their operations more quickly. Investments in energy efficiency, innovation and decarbonization can support both their profitability and long-term growth.

For companies with significant exposure to the United States, the challenge will be to diversify their markets and make better use of opportunities linked to major Canadian projects. 

Those already established in the domestic market could benefit from stronger demand. But seizing these opportunities requires thorough preparation: production capacity, certification, competitiveness and the ability to respond to complex bids are essential. 

Ultimately, the challenge for Canadian companies is to position themselves effectively to capture the value these projects generate.

Repositioning Canadian steel and aluminium

U.S. tariffs have put Canada’s steel and aluminium industries to the test by making a business model that relies heavily on the U.S. market riskier. And they have also spurred industry-wide reflection in Canada: how can we leverage major projects, infrastructure, and “Buy Canadian” initiatives to stimulate domestic demand?

Our findings show that, beyond the pressures posed by tariffs, major projects could make a tangible contribution to supporting domestic economic activity. The issue, then, is not only to protect these two industries, but to determine how such a reorientation can strengthen them and provide a lasting advantage.

Next steps

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