Province forges ahead with loans, guarantees for aluminum industry

An estimated $100 million in assistance set aside in face of duties imposed by U.S.

The Quebec government will offer aluminum producers loans and loan guarantees worth an estimated $100 million as it looks to support the industry in the face of import duties imposed by the United States.

The program, an expansion of a program for the softwood lumber industry, is intended to ensure that Quebec’s aluminum producers can keep producing and keep exporting to the U.S., Economy Minister Dominique Anglade said on Monday after meeting with representatives of the aluminum industry and its workers in Montreal.

The support, which will also be available to the steel industry, will target smaller aluminum producers and transformers, not the primary aluminum sector, the companies that make “raw ” aluminum from mined ore.

The large producers of the primary aluminum sector are better able to absorb the cost of the tariffs, said Jean Simard, president of the Aluminum Association of Canada.

Companies transforming aluminum are also being hit harder by the tariffs. Because of the way their supply chains are set up, aluminum can cross the border six, seven or eight times as it’s transformed into a finished product, said Alain Croteau, the Quebec director for the Métallos union.

Anglade said aluminum transformers told her they already have U.S. customers cancelling contracts and that some companies have had to slow down production.

“We can’t wait because we know that our businesses are already being affected,” she said.

The 10 per cent import tariff on Canadian aluminum, as well as a 25 per cent tariff on steel, came into effect June 1.

The federal government has announced reciprocal tariffs on imports of aluminum and steel from the U.S. as well as 10 per cent tariffs on a wide variety of U.S. consumer goods. Those are scheduled to come into effect on July 1.

About 30,000 Quebecers work in the aluminum industry and some 17,000 of them work for 1,400 companies that transform aluminum, said Simard.

“It’s just a matter of time before they have to look at decreasing production,” he said.

Primary aluminum producers are more resilient, he said, because they tend to be bigger. Quebec’s nine aluminum smelters export $7 billion worth of primary aluminum to the U.S. every year.

But for the Quebec producers of component parts made of aluminum, being replaced by a cheaper supplier from elsewhere is a possibility, he said.

The support program is good news, Simard said.

“It’s a sign that we have a government that is listening carefully and is able to move quickly,” he said.

While concerns remain, Croteau said the meeting with employers and government was positive.

“What reassures me is that the entire industry is here right now. We will work together, we will find strategies to bring to the federal government, so that it can adopt concrete measures very quickly,” Croteau said.

The provincial government has another meeting with the aluminum industry scheduled for next week to assess whether the program is starting to work or whether modifications will be necessary.