$1.5 billion smelter deal and federal talks signal shifting ground in Canada's industrial strategy
As Rio Tinto faces liquidity challenges due to US tariffs on steel and aluminum, the federal government has begun discussions with the company on potential financial support, according to Industry Minister Mélanie Joly.
Joly, speaking during a visit to Saguenay, Quebec—a key hub for the country's aluminum industry—said Ottawa began conversations with the firm earlier in the week “to know how we are able to help Rio Tinto in its liquidity.”
She described the tariff conflict as “completely unjustified,” as reported by BNN Bloomberg.
She had visited the company’s Arvida smelter the previous day and met with Rio Tinto leadership, employees, and union representatives.
A spokesperson for the minister confirmed the talks remain ongoing but offered no further details, according to CBC.
The company did not respond to requests for comment from The Canadian Press.
Rio Tinto operates several facilities across Canada and employs about 4,000 people in the Saguenay–Lac-Saint-Jean region, according to its website.
In 2023, the company announced a $1.4bn expansion of its aluminum smelting operations in the region.
Meanwhile, a separate long-term deal with major implications for Quebec’s energy supply and aluminum sector was unveiled on Friday.
Premier François Legault announced an electricity pricing agreement between Hydro-Québec and Aluminerie Alouette, a smelting consortium in Sept-Îles in which Rio Tinto holds a 40 percent stake.
As reported by CBC, the new deal will take effect in 2030 after the current agreement expires.
As part of the deal, the consortium committed to investing $1.5bn in its Côte-Nord facilities by 2045, with $750m allocated in the next five years.
According to a media release cited by BNN Bloomberg, the agreement is expected to help maintain 1,000 jobs in the region.
The new pricing structure will allow Hydro-Québec to benefit when aluminum prices are high while supporting Aluminerie Alouette’s competitiveness when prices fall.
The smelter currently employs about 950 workers and produces 20 percent of Quebec’s aluminum output, as per the Globe and Mail.
Joly stated that Ottawa remains open to discussions with other businesses in the aluminum sector facing similar liquidity pressures.
Her comments follow the US administration’s decision last month to double tariffs on imported steel and aluminum to 50 percent, a move that has intensified trade tensions and disrupted supply chains.
Prime Minister Mark Carney said Canada’s response will depend on the outcome of ongoing trade and security negotiations with US President Donald Trump.
CBC said counter-tariff adjustments will be announced by July 21.
The government has also introduced a 50 percent tariff on imports above 2024 levels from countries without a free trade agreement with Canada.
