Canada Unveils $100 Million Shipping Rebate to Shield Steel From US Tariffs
The federal government is launching a $100-million rebate program that will partially subsidize the interprovincial shipping costs of Canadian steelmakers.
The program is aimed at encouraging greater domestic use of Canadian steel as the sector struggles with steep U.S. tariffs on its exports south of the border.
Effective immediately, the program will rebate 50 per cent of eligible rail or marine transportation costs for Canadian steel moving between provinces and territories for up to one year, or until the $100-million fund runs out.
“Canadian businesses want to use more Canadian materials and our government wants to support that,” Transport Minister Steven MacKinnon said at a news conference in Hamilton.
He spoke alongside Ron Bedard, president and chief executive of ArcelorMittal Dofasco, who also chairs the Canadian Steel Producers Association.
“Having access to competitive rail rates will help us serve provinces from the East Coast to the West Coast. So we applaud the decision and the implementation of this,” Mr. Bedard said.
The federal minister announced the program while his cabinet colleague Dominic LeBlanc is scheduled to be in Washington this week for talks aimed at negotiating changes to U.S. tariffs on Canadian steel and other products.
Mr. LeBlanc, the Canada-U.S. Trade Minister, and Janice Charette, Canada’s chief negotiator, have been engaged in several days of intensive discussions with American officials ahead of a key Aug. 19 deadline.
U.S. President Donald Trump announced the date last month, saying his government intends to impose new 50-per-cent tariffs on US$20-billion worth of Canadian goods. The announcement was widely viewed as an effort by the U.S. to pressure Canada to reach an agreement on trade matters.
The Globe and Mail reported last week that the two sides are discussing a potential swap in which Canada would agree to a range of U.S. demands. Those include removing retaliatory tariffs on U.S. products and returning American alcohol to store shelves in exchange for a lowering of U.S. tariffs on steel and aluminum. The Canadian side is also hoping to avoid the new Aug. 19 tariffs and to secure trade relief for Canada’s auto and forestry sectors.
Canadian steel and aluminum exports to the U.S. currently face a 50-per-cent tariff. Mr. Bedard noted during the Monday news conference that in spite of these levies, the industry has announced very few layoffs to date.
He was then asked if more layoffs are expected.
“A lot of it’s going to depend on what happens with this round of tariff negotiations in the U.S.,” he replied. “Certainly a 50-per-cent tariff is billions of dollars across our association. So all of our members here are working very, very diligently with our government representatives, our customers and our employees to make sure that we’re competitive in the face of these tariffs.”
Mr. MacKinnon laughed when asked by a reporter whether Monday’s announcement of support for Canadian steelmakers is a sign that Ottawa does not expect to reach a comprehensive trade deal in the coming days.
“Look, obviously this is a response to these extremely unfair, unjustified tariffs that are obviously the object and the subject of intense negotiations that are going on right now in Washington. I’ll leave my colleague Dominic LeBlanc and the Prime Minister to comment on those talks,” he said.
Prime Minister Mark Carney first announced plans to develop a transportation subsidy program for steelmakers during a November news conference in Ottawa. That announcement included a range of measures aimed at helping the sector.
The Canadian government has sought to encourage more interprovincial trade as a response to U.S. tariffs, including with respect to steel. This included last year’s implementation of a tariff-rate-quota, or TRQ, applied to steel coming from countries other than the U.S.
However, steel users in Western Canada have criticized Ottawa’s approach. They say it is cheaper to import steel by ship from world markets than it is to buy from Eastern Canadian steel mills.
Conservative Leader Pierre Poilievre faulted Mr. Carney and his government on Monday for making “yet more promises on steel,” while also agreeing to a series of unilateral trade concessions.
“Mr. Carney has caved again and again and again to Mr. Trump’s demands without getting anything in return,” he said at a news conference in Quebec.
This article was first reported by The Globe and Mail
