Canada’s steel and aluminum industries are key contributors to the Canadian economy, providing well-paying jobs and key inputs for other major industries, including energy, advanced manufacturing, construction, and automaking.
On June 29, 2018, the Government of Canada announced that in a direct, measured and proportional response to the U.S. tariffs on Canadian steel and aluminum, reciprocal surtaxes will be imposed on imports of steel, aluminum and other products from the United States and will come into effect on July 1, 2018.
Supporting Businesses and Workers in Canadian Steel, Aluminum and Related Industries
On June 29, the Government of Canada also announced that it would 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 detailed below:
Help for Business: Financial and Risk Management
(valued at up to $1.7 billion)
Companies will have access to financial products and services provided by the Business Development Bank of Canada (BDC) and Export Development Canada (EDC).
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.
EDC will make available up to $900 million over the next two years in commercial financing and insurance to companies in the steel and aluminum sectors and related industries including SMEs. EDC solutions are available to viable companies with a good business plan and supported by an experienced management team that are looking for support to enable execution on established business plans, to free up working capital, or to insure payment. EDC can provide companies with access to liquidity, capital and risk mitigation solutions, which are provided on market terms and priced accordingly.
Help for Business: Innovation and Growth
The Strategic Innovation Fund provides support to firms of all sizes across all of Canada’s industrial and technology sectors. The Fund’s objective is to spur innovation for a better Canada. The Fund plays an important role in facilitating the growth and expansion of firms, and in attracting large-scale job-creating investments in Canada.
In order to support continued investment and expansion of Canadian steel and aluminum producers so that they provide good, well-paying jobs to Canadians, the Government of Canada will make available up to $250 million in new funding for targeted assistance as part of the Strategic Innovation Fund.
These funds would support companies that will choose to make investments in innovation, and capital expenditures including:
- new equipment, production and process technologies, and
- workforce training and upskilling related to these new technologies and processes.
These investments help bolster the competitiveness of Canadian manufacturers and better integrate the Canadian supply chain of steel and aluminum.
Help for Business: Opening New Markets and Supporting Exports
Global Affairs Canada stands ready to assist entrepreneurs in exploring new and longer-term market diversification opportunities. In addition, $50 million over five years in new support will be provided 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.
Help for Workers: Supporting Canadian Jobs
The Government of Canada stands ready to support workers and their families who may be affected by the United States’ decision to impose tariffs on Canadian steel and aluminum shipments. This support includes employment insurance, career counselling, skills and training supports, Service Canada offerings, and investments in retraining and skills development programs that are delivered at the provincial level, as well as temporary job-retention measures through Work-Sharing.
Extended Work-Sharing Agreements
($25 million over four years)
The Government of Canada, in close collaboration with provinces, territories and industry stakeholders, is prepared to support workers and employers through existing support mechanisms such as the Employment Insurance program.
In order to help employers avoid layoffs and retain skilled workers, as a temporary measure, Employment and Social Development Canada will extend the maximum duration of Work-Sharing agreements from 38 to 76 weeks. The mandatory cooling off period has also been waived so that employers with a recently expired agreement may immediately apply for a new agreement, without waiting between applications. This will allow employers to reduce layoffs and retain skilled workers.
Labour Market Development Agreements
($50 million over two years)
The Government invests nearly $3 billion each year in labour market transfer agreements with provinces and territories so they can support Canadians with skills training and employment assistance. An additional $2.7 billion was provided over six years in Budget 2017 to bolster these investments and help more Canadians access skills training and employment supports. To help workers impacted by the steel and aluminum tariffs, the Government will invest an additional $50 million through the Labour Market Development Agreements over the next two years to provide displaced workers with training and employment supports they need to successfully transition to new jobs. We will continue to monitor should additional assistance be required at a later point as market conditions evolve.
Help for Communities: Facilitating New Opportunities
Regional Development Agencies
The Government of Canada is closely monitoring the needs of the steel, aluminum and related industries in all regions across Canada, should they experience negative impacts in the current trade situation, while further ensuring that our actions are also meeting the needs of businesses, communities and workers that may also be affected. The Regional Development Agencies stand ready to assist by providing regionally tailored programs, services and knowledge to help businesses identify growth opportunities and communities navigate any economic disruptions.
Taken from the Government of Canada website.
For further reading please visit the Department of Finance Canada website.