Canada Announces C$193.3M Aluminum Investment as Joly Pushes Domestic Rolling Mills

Canada is committing C$193.3 million to aluminum projects at Rio Tinto and Aluminerie Alouette as Industry Minister Mélanie Joly calls for more domestic processing capacity. The investments come amid reciprocal U.S.-Canada tariffs that have increased costs across the integrated North American aluminum supply chain.

Published: October 26, 2026
Announcement date: October 23, 2026
Original reporting: Pierre Saint-Arnaud, The Canadian Press
ScrapMonster listing: Paul Ploumis

SEATTLE (Scrap Monster): Canadian Industry Minister Mélanie Joly says new federal investments in Quebec's aluminum industry represent a first step toward reducing Canada's dependence on the United States for processing the metal.

Speaking in La Baie, Quebec, on Friday, October 23, Joly announced C$193.3 million in federal funding for projects involving Rio Tinto facilities in the Saguenay-Lac-Saint-Jean region and Aluminerie Alouette's smelter in Sept-Îles.

The investment forms part of Ottawa's broader efforts to strengthen domestic aluminum production and processing capabilities as trade tensions with the United States continue.

Joly emphasized that aluminum is essential not only to Canada's manufacturing economy but also to its industrial independence.

"The aluminum industry is much more than an economic driver. It is also a strategic industry for our country and for Canadian sovereignty," she said.

Referring to the disruption caused by U.S. tariffs and changing trade policies, Joly argued that Canada needs greater capacity to manufacture the aluminum products required by its own industries.

Rio Tinto and Alouette Receive C$193.3 Million in Federal Support

The federal assistance will be delivered through Canada's Strategic Response Fund, supporting industrial modernization, production efficiency and lower-emission aluminum manufacturing.

According to the Government of Canada's October 23 announcement, Rio Tinto will receive C$164.8 million toward projects valued at C$818.5 million in the Saguenay-Lac-Saint-Jean region.

The projects include a new billet casting centre at Rio Tinto's Alma smelter, designed to support production of value-added aluminum products.

Funding will also support modernization of anode baking furnaces at the Grande-Baie smelter, including infrastructure improvements intended to strengthen reliability and productivity.

Separately, Aluminerie Alouette will receive C$28.5 million toward a C$135 million project to modernize and optimize its electrolysis operations.

The Alouette investment is intended to improve energy performance, operating efficiency and greenhouse gas emissions.

The federal government estimates that the combined projects will help maintain approximately 6,000 full-time jobs across Quebec and Canada.

Canada Wants More Aluminum Rolling Mills

While the announced funding supports existing producers and their facilities, Joly said Canada must also expand its capacity to process primary aluminum into manufactured products.

She highlighted the importance of developing domestic rolling mills, which convert aluminum into sheet and other flat-rolled products used by manufacturers.

Joly argued that Canada currently depends too heavily on U.S. facilities to process aluminum produced by Canadian smelters.

In her view, the existing arrangement creates unnecessary costs when Canadian aluminum is exported for processing and subsequently returned to Canada as a finished or semi-finished product.

"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.

The minister identified several sectors that could benefit from additional Canadian processing capacity, including:

• Food and beverages: Aluminum sheet for cans and packaging.
• Aerospace: Processed aluminum for aircraft components and manufacturing.
• Defence: Domestic supply of specialized aluminum products and components.
• Industrial manufacturing: Greater access to Canadian-produced, value-added aluminum materials.

Joly said the federal government wants Canada to manufacture more aluminum cans, aerospace components and defence-related products using domestically processed metal.

She also indicated that several industries have identified potential rolling mill projects of their own.

Reciprocal Aluminum Tariffs Increase Cross-Border Costs

Joly linked the government's industrial strategy to rising trade costs between Canada and the United States.

The United States maintains tariffs of 50% on covered Canadian aluminum products. Since September 8, 2026, Canada has applied matching 50% counter-tariffs to specified aluminum products originating in the United States.

Canada's tariffs on certain U.S. aluminum goods had previously stood at 25%, following measures introduced in March 2025.

The minister argued that aluminum moving from Canada to the United States for processing and then returning to Canada can encounter tariffs at both border crossings.

She characterized the two 50% measures as creating a combined tariff burden of 100 percentage points across the processing chain.

However, these are separate import duties assessed on different transactions. The actual cost depends on the products involved, their customs values, rules of origin and any applicable exemptions or relief.

For Canadian manufacturers using aluminum that has been processed in the United States, the trade measures can complicate purchasing decisions and reinforce interest in developing domestic processing alternatives.

Ottawa Considers Equity Investments and Defence Procurement

Beyond direct financial assistance, Joly said Ottawa wants to work with private-sector entrepreneurs interested in developing new aluminum rolling facilities.

The federal government is prepared to consider taking equity stakes in qualifying projects, potentially providing additional support for investments that require substantial capital.

Joly also identified government procurement as a possible tool for supporting domestic processing capacity.

In particular, she said defence-related purchasing commitments could help establish a viable business model for new facilities supplying aluminum components to the aerospace and defence sectors.

The proposed approach would connect industrial investment with anticipated domestic demand, rather than relying exclusively on exports of primary aluminum.

No specific rolling mill equity investment, procurement contract or construction timetable was announced as part of Friday's funding package.

Canada's Aluminum Industry Remains Concentrated in Quebec

Canada currently has nine primary aluminum smelters, according to the federal government's October 23 statement.

Eight are located in Quebec, while the remaining facility operates in Kitimat, British Columbia.

Aluminerie Alouette in Sept-Îles is the largest primary aluminum smelter in North America, producing approximately 633,000 metric tons annually, according to the federal government.

Canada's aluminum industry remains closely integrated with U.S. manufacturing. Natural Resources Canada reported that the United States accounted for 91% of the value of Canadian aluminum exports in 2024.

Joly's proposal is intended to reduce dependence on U.S. processing capacity while retaining more manufacturing activity within Canada.

She described that objective in terms of building domestic industrial capabilities rather than simply announcing new policy commitments.

"Economic sovereignty isn't something you proclaim, it's something you build," she said.

Original reporting: Pierre Saint-Arnaud, The Canadian Press.
Courtesy: www.qpbriefing.com