Question Period Note: Regional Tariff Response Initiative and Sectors Most Affected by U.S. Tariffs

Regional Tariff Response Initiative and Steel

• Canada’s steel, aluminum, and copper industries are critical to building Canada strong.

• Our Government is acting decisively to support the long-term health of these critical sectors that underpin Canada’s economy but have been facing real challenges because of unfair and unjustified tariffs.

• In addition to targeted support being made available through the Business Development Bank of Canada, regional development agencies will deliver additional support to businesses through the Regional Tariff Response Initiative (or RTRI) that will protect and strengthen their operations.

• Southern Ontario is the region whose industries have borne the brunt of the negative impacts of tariffs. This support is critical for the region’s businesses, providing them with financing to enable investments in strategic pivots to become more resilient, more innovative, and more competitive for the long term.

Regional Implications

• Southern Ontario hosts a dense cluster of metalworking machinery manufacturers critical to automotive production, representing a significant portion of Canada’s industry and exports largely destined for the U.S. market.

• Further to changes announced on April 6, 2026, Section 232 tariffs now apply to the full customs value of many steel, aluminum, and copper articles, not just the metal content, affecting industrial machinery including moulds and dies. This change raises costs substantially for many regional firms.

• For example, this change is disproportionately increasing costs for high-value moulds with relatively low metal value content. Mould-making is vital to Ontario’s machinery manufacturing, supporting automotive, aerospace, electronics, and other advanced manufacturing sectors, with the Canadian industry employing 40,000 to 50,000 skilled workers.

Government Response through RTRI

• The Government of Canada is helping Canadian businesses respond to global trade pressures. The Regional Tariff Response Initiative (RTRI), delivered by Canada’s regional development agencies (RDAs), is part of the broader Government of Canada tariff response plan.

• RTRI is designed to ensure that SMEs have access to the financing they need to enable strategic pivots through investments in market diversification and enhanced productivity that strengthen their competitiveness, productivity, resilience and innovative capacity.

• Effective May 4, 2026, the government is providing an additional $500 million in RTRI support across Canada. This brings the amount that the government is investing through the RTRI to $1.5 billion, which already included dedicated set asides of $150 million for Canada’s steel sector and $100 million for SMEs in Canada’s auto sector.

• As of April 30, FedDev Ontario has invested over $204 million in 156 RTRI projects. This includes over $67 million invested in 65 steel projects, and over $68 million invested in 44 automotive projects.

• Through the funding deployed through the Regional Tariff Response Initiative we are helping firms to enter new markets. Our support is assisting businesses to stabilize in the near term and build for the future.

• This brings the amount we are investing in this initiative to $1.5 billion nationally.