The Business Development Bank of Canada (BDC) has announced it will provide up to C$1bn in favourably priced loans to steel, aluminium and copper producers whose businesses have become unviable due to escalating tariffs.
State-owned development bank BDC said the programme has been designed to address a “temporary liquidity shock” in the domestic metals market.
The Canadian government said support was deployed urgently after the US unveiled tariffs of up to 50% on finished steel, aluminium and copper imports on April 6. Canada has also introduced 25% levies on US steel and aluminium product imports worth a combined C$15.6bn.
“The focus of BDC’s new financing solution is alleviating the temporary liquidity shock of a changing tariff environment by addressing the immediate risk for companies: drained cash flows and working capital,” the development bank said.
Under the programme, BDC will provide three-year working capital loans ranging from C$2mn to C$50mn in value, with repayment set at preferential rates.
Businesses are eligible if they were financially viable before becoming exposed to higher tariffs, with a focus on those seeking to export to alternative markets.
“Previously profitable companies affected by tariff pressures have limited ability to pivot to new customers because their tooling is already configured and forward contracts are signed, which means they continue to ship products under increasingly compressed margins,” BDC said.
Isabelle Hudon, BDC’s president and chief executive, said: “A thriving steel and aluminium industry powers our manufacturing, construction and defence sectors, but these companies are facing unprecedented tariffs.
“When markets turn unfair, BDC steps up to give them the tools to stabilise their operations, keep their doors open and keep producing.”
At the same time, the government has announced it will provide an additional C$500mn to support businesses affected by tariffs across all sectors of the economy, with financing delivered by regional development agencies.
It said the injection of funding should help SMEs access financing for “strategic pivots” as they look to diversify destination markets.
Export Development Canada (EDC) has also sought to respond to rising tariffs and market uncertainty, announcing last month it has deployed C$2.1bn under its Trade Impact Programme since its launch in March last year.
The export credit agency said the programme will provide up to C$5bn within its first two years, covering lending, trade credit insurance and working capital solutions, making it “the largest trade-related support package available” to Canadian businesses.
EDC met with agencies from France, Germany, Italy, Japan, the UK and the US last week to discuss how to grow support for exporters, including by supporting trade in critical minerals and deploying blended finance.
Participants “expressed strong support for enhancing resilient supply chains, including through the prioritisation of strategic industries”, they said in a joint statement issued after the summit, which was held in Washington, DC.
