Aluminum, steel firms want U.S. tariffs gone
Warren Peters is pleased the federal government is paying attention to embattled steel and aluminum companies, but says new subsidies should not overshadow the goal of removing U.S. tariffs that have been called “unjust” and “illegal.”
Peters co-owns Atlas Industries Ltd., a Saskatoon-based fabricator that employs 13 people and makes components for use in agriculture, mining and power generation — and has been feeling the effects of higher prices on U.S. steel.
“Subsidies, in the end, just create dependency. So the subsidy issue is not a total answer. I would just want to make sure that the money is spread out and there’s no way this could increase the likelihood of regional advantages,” Peters said.
Any aid package for the industry should be designed in such a way that it doesn’t create local imbalances, or perpetuate larger regional imbalances such as the competitive disadvantage facing western manufacturers, he added.
Unveiled Monday at a steel plant outside Hamilton, Ont., the federal government’s new program will allow companies with between 10 and 499 employees to apply for $150,000 to $1 million in non-repayable grants, up to a maximum of 45 per cent of a project’s cost.
Western firms are expected to get a quarter of the $100-million pot.
Citing national security concerns, the U.S. government imposed a 25 per cent tariff on non-american steel as well as a 10 per cent duty on aluminum a year ago. Canada’s exemption from those taxes expired June 1, sending waves of concern through the industry.
Ottawa responded by putting together a $250-million funding package for major steel manufacturers, $40 million of which is expected to flow to Evraz North America PLC facilities in Regina and Red Deer, as well as the new funding for smaller businesses.
Federal Innovation Minister Navdeep Bains said around 300 companies across the country are eligible to begin applying for the new funding right away. The money is expected to begin flowing “in the coming weeks and months,” he added.
Jim Nowakowski, who founded JNE Welding Limited Partnership in 1980 and will serve as CEO of the Saskatoon fabricator until May 1, said while he generally opposes government subsidies, the focus on manufacturing expansion and innovation is welcome.
“Like it or not, other countries support their manufacturing industries heavily with programs to help them compete on the world stage, as they understand how pivotal they are to a healthy, stable economy,” he said, referring to the industry’s overall economic impact.
Peters acknowledged that the government’s plan aims to increase innovation and expansion, but suggested a fair alternative would be to compensate each manufacturer based on how much tariff steel they purchased.
Bains said the Americans have been receptive to the Canadian government’s view that its steel and aluminum do not represent a national security threat, and that the goal remains the elimination of the tariffs.
“Whenever, wherever possible we’re raising this issue. They’re aware of this issue and recognize that we want a resolution sooner rather than later.”