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 during 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.”
Cobden said that while she doesn’t want to sound “tone deaf” about the challenges facing other sectors in the economy, prioritizing Canadian steel is a matter of principle and critical to the long-term functioning of the country’s supply chains.
Canada remains exempt from the vast majority of other U.S. tariffs thanks to exemptions under the Canada-U.S. Mexico agreement, or CUSMA. That trilateral pact is up for renewal as of July 1 and if the deadline passes without renewal, CUSMA stays in place subject to an annual rolling review for up to 10 years.
Cobden said that the CSPA believes a status quo resolution that maintains the Section 232 tariffs is not sustainable for the domestic industry.
The federal government also announced plans last week to extend the tariff rate quotas for another year. That regime sees steel and steel derivative imports tariffed at a rate of 50 per cent above certain quotas for non-U.S. and Mexico trading partners.
Cobden said this program should be the “new normal” for the steel industry to guard against countries accused of dumping steel — flooding foreign markets with heavily subsidized products and undercutting domestic producers.
The United Steelworkers union said in a media statement last week that it was grateful to see the tariff rate quota program extended for another year. That regime has worked to stabilize the industry and help domestic producers regain market share, the statement read.
But the union also urged the federal government to tighten that regime to combat global oversupply of steel and encourage more public and private sector investment in domestic steel production to reduce dependence on foreign imports.
Both the steelworkers union and the CSPA also want to see Canada adapt its tariff posture to reflect changes to the United States’ tariff regime for derivative steel products — finished or semi-finished goods made substantially of steel.
The Trump administration tightened tariffs on steel, aluminum and copper derivatives in April and now imposes duties based on the full value of the product, not just its metal content.
Cobden said that has led to other foreign markets diverting products containing steel into Canada instead of the United States. That’s boxing out domestic manufacturers of the same products, she said.
Canada implemented a 25 per cent global surtax on some steel derivative products at the end of last year.
“We’re really hopeful that the federal government will consider expanding the derivative tariff regime that they’ve adopted. We’re grateful for what they’ve done but we actually have to do more to protect the Canadian customers,” Cobden said.
The steelworkers union said expanding the steel derivative tariff list to limit “unfair import competition” is critical to supporting domestic manufacturers and giving businesses the confidence to invest in new, potentially more profitable practices.
This report by The Canadian Press was first published June 12, 2026.
By Craig Lord | Copyright 2026, The Canadian Press. All rights reserved.
