Aluminum processors seek financial aid
Quebec's aluminum manufacturers are grappling with the financial repercussions of U.S. tariffs, according to discussions led by AluQuebec's CEO, Charlotte Laramee. However, there are several financial assistance options available to help mitigate these effects.
The Canadian federal government is preparing to roll out financial support programs for sectors facing steep U.S. tariffs, including aluminum, primarily based in Quebec. These programs, still under development, are aimed at firms facing 50% U.S. tariffs on aluminum products. The specifics of these support efforts are yet to be announced, but they are expected soon, depending on the outcome of trade talks with the U.S. [3][4]
One such assistance option is the CQRDA — PSIAL grant, offering up to $100,000 CAD specifically to Quebec-based small and medium-sized enterprises (SMEs) that develop or improve aluminum products or processing methods. This grant aims to encourage innovation and efficiency improvements in aluminum manufacturing processes and products in Quebec. [2]
Another option is the Quebec Investment and Innovation Tax Credit (IITC), which provides a tax credit of up to 25% of eligible project costs for businesses acquiring new manufacturing or processing equipment used in Quebec. This credit supports investments related to processing aluminum or related technologies. [5]
AluQuebec, the provincial aluminum association, is also requesting financial assistance from the government, such as subsidies or forgivable loans. [4] The association's survey in June revealed that many members are worried about the impact of U.S. tariffs. [6]
Despite these efforts, large firms like Alcoa have paused growth projects in Quebec due to tariff-related uncertainty and are reassessing the viability of their assets under these conditions. They are evaluating government support mechanisms as part of this strategic review. [1]
The aluminum sector is facing a talent shortage in the region, making it harder to attract workers. Losing temporary foreign workers would exacerbate this issue. Therefore, Charlotte Laramee, CEO of AluQueebec, wants temporary foreign workers already employed in Quebec's factories to benefit from an acquired right. [4]
Many companies in the aluminum industry are concerned about the long-term impact of U.S. tariffs. The higher costs due to tariffs are making transformers less competitive. [6] Some companies in the industry are considering layoffs by the end of the year due to the financial strain. [6]
The U.S. increased tariffs on aluminum imports from 25% to 50% in June. [5] The Midwest premium, which should alleviate the impact of the tariffs on transformers, is instead worsening it. [6]
AluQuebec aims to make the industry more resilient by increasing productivity and finding new outlets in the long term. [4] The association's president and CEO, Charlotte Laramee, has warned that the situation could get worse if no action is taken. [6]
In a recent development, the European Union has not been able to obtain any concessions regarding aluminum tariffs from the U.S. [5] AluQuebec's CEO believes that Canada should scrap its tariffs on aluminum imports from the U.S. [6]
However, loan programs are available but underutilized due to businesses' reluctance to increase their debt. [6] Now is not the time to reduce the number of temporary foreign workers, according to Charlotte Laramee, as it would make it even harder to find the necessary workforce in the future. [7]
In conclusion, Quebec aluminum manufacturers face significant financial difficulties due to U.S. tariffs. However, they have several financial assistance options available, including federal financial supports, the CQRDA — PSIAL grant, and the Quebec Investment and Innovation Tax Credit. These options collectively offer avenues for innovation funding, investment credits, and upcoming federal financial supports to offset the heavy impact of U.S. tariffs on aluminum products.
The Canadian federal government is preparing to offer financial support programs for the aluminum industry, primarily based in Quebec, specifically addressing firms facing 50% U.S. tariffs on aluminum products. One such assistance option is the CQRDA — PSIAL grant, offering up to $100,000 CAD to Quebec-based small and medium-sized enterprises (SMEs) in the aluminum industry. The Quebec Investment and Innovation Tax Credit (IITC) is another option, providing a tax credit of up to 25% of eligible project costs for businesses investing in aluminum processing.
