Canada Rolls Out Billion-Dollar Financing Package in Response to Trump's Metals Levies — Update

By Paul Vieira

OTTAWA--Canada is providing additional financing to the country's battered manufacturers to help cushion the blow from President Trump's overhaul last month of metals tariffs.

Canadian officials said Monday the financial help--in the form of interest-free loans in the first year--is needed to help keep companies afloat while they pivot on their corporate strategy to deal with the tweaked U.S. levies, which some economists warn will be painful for domestic manufacturers of value-added products.

Canadian Industry Minister Melanie Joly said the government was putting aside 1.5 billion Canadian dollars, or the equivalent of $1.1 billion, to help certain trade-exposed sectors. Two-thirds of the money will be managed by state-owned Business Development Bank of Canada. She said the state-owned lender will offer loans of up to C$50 million at favorable terms to companies that manufacture and export products containing steel, aluminum and copper.

Canada's regional-development agencies would distribute the remaining cash to eligible firms.

Under the terms, Joly said the loans will charge no interest in the first year, and then low rates in the second and third years--after which repayment will begin. She added the government expects the country's big chartered banks to work with manufacturers "as we lean in collectively to support this sector."

This new batch of financing is in response to Trump's decision last month to slap a 25% tariff on imported finished products that use foreign metals as inputs. That 25% tariff on value-added goods applies alongside hefty tariffs of up to 50% on foreign steel, aluminum and copper that enters the U.S. The sector-specific tariffs, which also apply to automobiles and forest products, have squeezed Canadian manufacturers. Employment in the sector is down 2.4% from a year ago, according to Statistics Canada data.

"We're in a trade war. We're on the front lines, and the goal is to protect workers and actually keep companies afloat," Joly said during a press conference at a manufacturer in suburban Ottawa. "The steel, aluminum and copper sectors are key--they're key, obviously, to our economy, key to our manufacturing sector, but also key to our sovereignty."

Canadian officials have said that relief from hefty tariffs on specific sectors, like steel and aluminum, is required for any deal between Ottawa and Washington related to the renewal of the U.S.-Mexico-Canada trade treaty, or USMCA. Talks between the U.S. and Canada are at a standstill, ahead of a summer review of USMCA and a decision from Washington on whether the pact should be renewed.

Prime Minister Mark Carney's chief policy priority since coming to office last year has been to reorient Canadian trade so it's less dependent on the U.S. He's advocated for the construction of cross-country trade corridors and the development of certain resource projects to help Canada sell an increasing share of goods to Asia and Europe.

Economists at Desjardins Group said Trump's overhaul of the metals-tariff regime could erode the economic fabric in some regions of the country, most notably the central Canadian provinces of Ontario and Quebec, and Manitoba in the west. The bulk of Canada's population lives in Ontario and Quebec, and both provinces have relied on manufacturing to drive growth.

Desjardins said the bigger concern is that Trump's tariff tweak "could prolong the slowdown in economic growth and leave the economy more sensitive to additional shocks, such as higher oil prices and greater financial-market volatility."

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

May 04, 2026 11:32 ET (15:32 GMT)