The American Primary Aluminium Association (APAA) has voiced concerns over Ottawa’s new USD 5 billion tariff relief fund. According to Canadian Industry Minister Mélanie Joly, this fund is nothing but a replica of the earlier subsidies that only provide hundreds of millions of dollars in support to the aluminium sector. The only difference is the previous funds issued USD 850 million in subsidies, while the recent one is providing USD 5 billion.
“With the Canadian Government now giving hundreds of millions more to boost Canadian aluminium production, this is just more of the same from Canada,” said APAA President Mark Duffy. He added that “rather than allowing their producers to compete on a free market basis, Canada has chosen to double down and distort the global market further at the expense of US aluminium workers.”
However, it has also been noted that Canadian subsidies provided some support, as the country still operates ten aluminium smelters, the same number as in 2000, whereas in the US, the count has dropped sharply from twenty-three in 2000 to just four today.
Also read: Quebec's aluminium sector to get its fair share, says Mélanie Joly
Québec at the centre of the dispute
The main concern of Mr Joly is that a lion’s share of funding will be absorbed by Québec as it is the primary hub of aluminium production. Joly stressed, “The Quebec aluminium sector will get its fair share… With the projects being discussed right now with Alcoa, with Rio Tinto and with Alouette, it’s hundreds of millions of dollars.”
Québec produced 3.3 million tonnes in 2024, exporting 90 per cent of it, with most heading to the US. This makes American tariffs particularly painful for Canadian producers.
Industry leaders defend aid
Tariff relief is indispensable if Canada wants to remain competitive on a worldwide scale, argues Jean Simard, president and CEO of the Aluminium Association of Canada. Producers have begun shifting cargoes to Europe or Asia, and Simard said if they then cut ties with the US, the competitors will take over the opportunity to service that market.
Canada’s largest aluminium smelter and a major supplier to the US market, Aluminerie Alouette's USD 1.1 billion planned expansion in northern Québec demonstrates continued confidence even in the face of tariff challenges. With backing from Rio Tinto, this project was able to establish a long-term supply of power and an increased resilience to the supply chain in North America.
The US-Canada aluminium dispute highlights broader tensions in cross-border trade. With Washington doubling tariffs to 50 per cent, pressure is mounting on both sides. Canada insists subsidies are survival tools; APAA insists they are distortions. The rift underscores how industrial policy and geopolitics are reshaping global aluminium flows.
Also read: Canada to announce aid for aluminium, steel and canola sectors amid tariff dispute
To get insights into Canada's aluminium market and the overall glimpse into Americas', read our e-Magazine: American Aluminium Industry: The Path Forward
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