Canada’s involvement in the primary aluminium industry dates back to 1901, when the Northern Aluminum Company (now referred to as Alcan), established its first smelter in Shawinigan, Québec. Today, Canada is the world’s fourth-largest aluminium producer, with China holding the first position, then India and Russia.
Québec’s aluminium sector to receive federal aid
Québec’s aluminium sector, the backbone of Canada’s production capacity, is poised to receive substantial federal support as it grapples with the ongoing US tariffs. As per the latest news, industry minister Mélanie Joly announced that Québec’s aluminium industry could receive “hundreds of millions of dollars” from a USD 5 billion federal fund designed to support sectors hit by Trump tariffs. Since nearly all of Canada’s aluminium is produced in Québec, the province is expected to be a major beneficiary.
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“The Quebec aluminium sector will get its fair share. And we believe that with the projects that are being discussed right now with Alcoa, with Rio Tinto and with Alouette, it’s hundreds of millions of dollars. We produced 3.3 million tonnes of metal in 2024, which is our biggest year ever. We exported 90 per cent of that, and 90 per cent of that 90 per cent was going to the US,” added Joly.
Joly noted on Monday that the federal government has not yet finalised how the support fund will be allocated.
Also Read: Canada seeks US trade concessions for steel, aluminium and auto industries, Carney confirms
Canadian aluminium and steel exports are currently subject to 50 per cent tariffs in the US, putting significant pressure on producers. At the press conference, Jean Simard, president of the Aluminum Association of Canada, emphasised that tariff relief is essential to maintaining the sector’s global competitiveness. While Canada does export aluminium to Europe and Asia, Simard pointed out that the overwhelming share of Canadian production is destined for the US market.
Simard explained that aluminium producers redirected more shipments to Europe over the summer as exports to the US were no longer profitable. He added that while the Canadian industry is looking to expand its presence in European and Asian markets, it cannot fully sever ties with the US if Canadian producers were to withdraw; he warned that competitors would quickly fill the gap.
About the said projects with Alcoa, Rio Tinto and Alouette
Aluminerie Alouette, Canada’s largest aluminium smelter and a major supplier to the US market, has announced a CA$1.5 billion (US$1.1 billion) investment in its northern Québec operations. The project, backed by a consortium led by Rio Tinto, underscores the company’s commitment to expansion despite mounting US tariff pressures and global trade uncertainties. The decision follows the signing of a long-term power agreement with Hydro-Québec, securing electricity supply until 2045. With an annual production capacity of 630,000 metric tons, the Sept-Îles facility remains a cornerstone of North American aluminium supply chains.
Need for federal support
The aid package comes against the backdrop of a six-month-long tariff dispute showing little sign of resolution. Despite reports of “intense” negotiations, a comprehensive US-Canada trade deal remains elusive. On July 31, 2025, Ottawa’s chief negotiator warned that any agreement could still be weeks away.
Tensions escalated further when President Trump raised tariffs on Canadian imports from 25 per cent to 35 per cent after an early-August deadline for progress collapsed. Canadian Trade Minister Dominic LeBlanc acknowledged the limited headway, noting: “At the end of business yesterday, that agreement was not yet in sight. There remain sectors the Americans are targeting which are essential for the Canadian economy.”
Bank of Canada Governor Mark Carney has underscored that the tariffs are straining long-standing economic and security ties. Washington, meanwhile, has tied its hard-line stance to fentanyl smuggling concerns and Canada’s refusal to roll back retaliatory measures.
A brief throwback
Trade frictions between the United States and Canada escalated sharply in 2025. On March 4, Washington imposed a blanket 25 per cent tariff on Canadian goods, followed just days later, on March 13, by an additional 25 per cent duty specifically targeting aluminium and steel imports. Ottawa swiftly retaliated with its own 25 per cent tariffs on US exports, covering aluminium, steel, and a range of consumer products.
The dispute deepened on April 3, when the US expanded its measures with a fresh 25 per cent tariff on automotive imports. Soon after, tariffs on Canadian aluminium and steel were doubled from 25 per cent to 50 per cent, though the United Kingdom was notably exempted. The escalation marked a decisive turning point, heightening risks for supply chains and reshaping the outlook for cross-border trade policy.
Also Read: Tariff tensions in focus: US–Canada aluminium ties ahead of August
Image Source: Christopher Katsarov/The Canadian Press
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