Ottawa invests $193 million in Quebec aluminum to reduce reliance on U.S

LA BAIE · The federal government will invest more than $193 million in Quebec aluminum smelters in a bid to reduce the sector's reliance on American processing. Industry Minister Mélanie Joly announced the funding on Friday in La Baie, Que., for projects at four Rio Tinto facilities in the Saguenay-Lac-Saint-Jean region and at the Alouette smelter in Sept-Îles. Joly, who is also the minister for economic development in Quebec, called the move a first step toward strengthening Canada's aluminum supply chain. She said the industry is strategic for the country's sovereignty and that economic upheaval from tariffs requires more domestic production.

"The aluminum industry is much more than an economic driver. It is also a strategic industry for our country and for Canadian sovereignty," Joly said in her speech. She cited the unpredictability of the American government and stated, "In this new context, we must be able to produce more of what our economy needs right here in Canada." Joly explained that aluminum products face inflated costs from tariffs when they enter the United States for processing and again when they return to Canada. The current tariff regime sees a 50 per cent U.S. duty on Canadian aluminum and, since Sept. 8, a 50 per cent Canadian duty on processed U.S. aluminum, creating a total 100 per cent surcharge.

Before the increase this September, Canada's tariff on processed aluminum from the United States was 25 per cent, a rate set in March 2025. Joly stressed the government views aluminum as a strategic sector and sees a critical need to build rolling mills in Canada. "It's not normal that most of our aluminum is processed in the United States and then comes back at a higher cost to our companies," she said. She noted that sectors like agri-food, beverages and aerospace require more processed aluminum and have their own rolling mill projects underway.

"We want to be able to produce our aluminum cans here at home; we want to be able to produce our aircraft and aerospace parts here at home; and we also want to attract key investments in aluminum processing for our defence sector," Joly said. Beyond direct funding, she said the government wants to work with entrepreneurs on rolling mills and take equity stakes. Ottawa also aims to offer procurement contracts, particularly defence-related ones for aerospace components, to create a viable business model for such mills. Joly concluded, "Economic sovereignty isn't something you proclaim, it's something you build." Canada has nine primary aluminum smelters, eight in Quebec and one in British Columbia.

With files from The Canadian Press, BNN Bloomberg and Toronto Star