Canadian government funding for ArcelorMittal is the first of a series of steps the nation is to take to support the steel industry amid a tariff fight with the US, Canadian Minister of Innovation, Science and Economic Development Navdeep Bains said on Friday.
The ministry announced funding of up to C$49.9 million (US$38 million), a mix of grants and loans, as part of a C$205 million modernization project at the Hamilton, Ontario, plant of the Luxembourg-based steelmaker’s Canadian unit, ArcelorMittal Dofasco.
It was the first announcement from a C$250 million fund unveiled earlier this year to support steel, aluminum and manufacturing companies affected by the tariff standoff and more are coming, Bains said.
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He left the door open to Canada accepting quotas on metal exports, but said US tariffs must be eliminated.
“It’s a priority for us to eliminate the tariffs on aluminum and steel, so we’re very engaged with our American counterparts,” Bains said in a telephone interview. “Today’s announcement really demonstrates a commitment to the steel industry and steel workers.”
The US imposed import tariffs of 25 percent on Canadian steel and 10 percent on aluminum as of June 1, and Canada responded in kind a month later with its own tariffs. Despite a Sept. 30 deal to update the North American Free Trade Agreement (NAFTA), the metals tariffs remain in place.
Canada accepted a quota on tariff-free auto shipments as part of the trade deal and a similar solution is seen by some as the likely answer to the metals tariffs.
Bains would not rule out a quota when asked repeatedly whether Canada would accept that as an alternative to tariffs — even one like the auto sector, which is largely symbolic and well above current production.
He said that Canada’s focus remained on eliminating the tariffs.
After the NAFTA deal, “let’s use the goodwill and momentum going forward to ultimately eliminate the tariff,” Bains said.
“We’re making the business case and the economics of it are very compelling,” he said.
Canada has regularly said its preference is for both countries to simply eliminate their tariffs.
When the Canadian government finalized its retaliatory tariffs in June, it announced C$250 million for the steel, aluminum and manufacturing sectors affected by the tariff fight.
Friday’s announcement came from that fund and more announcements are to follow and potentially top C$250 million.
“Absolutely, we will be making additional announcements in the coming weeks and months. This fund is oversubscribed,” Bains said.
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