Steel producers association unhappy with tariff remission program extensions

Ottawa’s decision to extend a tariff offset program for some U.S. steel imports fails to encourage domestic manufacturers to diversify away from the United States, the head of the Canadian Steel Producers Association said.

The horizontal tariff remissions program for steel, aluminum and some steel derivative products was to end on June 30. The federal government said last week it is extending it for another year, until June 30, 2027.

The program grants automatic relief from Canadian tariffs on U.S. steel and aluminum to firms importing products integral to key Canadian sectors, or firms that support public health and national security.

U.S. steel and aluminum products used in the automotive and aerospace sectors are eligible for the remissions, as is aluminum used in manufacturing, processing, food and beverage packaging, and agricultural production.

The horizontal remissions program offers blanket relief on specific items and is separate from individual requests made by firms seeking exemptions from Ottawa’s counter tariffs.

Canada maintains counter tariffs of 25 per cent on U.S. steel and aluminum in response to duties of 50 per cent levied by the Trump administration under Section 232 of the U.S. Trade Expansion Act.

“Frankly, with the tariffs that we’ve been facing, it’s over a year now at 50 per cent. That’s an unsustainable situation and having very devastating consequences on the industry,” said Catherine Cobden, president and CEO of the CSPA.

Cobden praised initiatives like Ottawa’s Buy Canadian policy and the tariff rate quota on steel products imported from outside North America. But she said the remissions program is “problematic” for the domestic steel producers she represents.

She said she understands why the federal government would compensate companies for products they can’t source elsewhere, but domestic firms are often producing the kinds of steel that Canada’s manufacturers need.

“What this horizontal remission does is it gives a sort of a free pass for U.S. steel to come into automaking in Canada,” Cobden said.

“How happy are we that cars made in Canada will be using U.S. steel over Canadian steel?”

The remissions program launched in April 2025 and was to last just six months. It has been extended several times.

John Fragos, press secretary for Finance Minister François-Philippe Champagne, said in a statement to The Canadian Press that the extension is meant to give certainty to Canadian manufacturers through a period of global instability.

It’s also meant to protect domestic firms from tariff-driven price hikes “while maintaining Canada’s long-standing counter-tariff position,” he said.

“This extension supports Canadian producers whose supply chains depend on steel and aluminum, provides long-term certainty and predictability to businesses, encourages domestic production and is in keeping with the government’s broader support measures,” Fragos said.

Jean Simard, president and CEO of the Aluminum Association of Canada, was not available for an interview. He said in a brief email that “anything that can help Canadian processors of aluminum is welcome.”

By Craig Lord