Clean Energy Canada | Facing tariffs, Canada has a clever, cleaner trade-compliant tool to support its steel and aluminum industries
March 6, 2025

Our domestic steel and aluminum producers have been hit with the news that the United States is moving ahead with a 25 per cent tariff on all steel and aluminum coming into the country from March 12.

Industry associations have been quick to point out the potential havoc this could wreak with these sectors, with $20-billion in trade for the steel sector alone and 9,500 aluminum jobs potentially impacted by these actions.

Governments and industry will no doubt be at the table seeking to find a path forward with the U.S. to avoid or reduce these tariffs. But it is also important to remember that governments have multiple tools at their disposal beyond diplomacy—and one in particular that is both trade compliant and good for Canadian business.  

Across all levels of government, public spending on steel products for construction represents 29 per cent of the total domestic market, a value of $. Governments also purchase more than $100-million in construction aluminum, representing nine per cent of Canada’s market. If steel and aluminum exports take a 20-per-cent hit in 2025—as they did in 2018—this combined $2-billion of spending power would shore up about half of what our exports might lose in U.S. markets. This isn’t pocket change.  

Through public procurement, federal and provincial governments can step in and offer support to these industries at a crucial time, all without new spending—but rather smarter ways of spending.

Prioritizing domestic materials for large public works projects could hit some snags, however. This kind of spending is often subject to the World Trade Organization’s Global Procurement Agreement, of which Canada is a signatory. The good news is Canada has an approach it is already using that is fully compliant and could be rapidly scaled up. 

It’s called Buy Clean.

Buy Clean procurement policies allow for the prioritization of certain construction materials based on their carbon emissions intensity in manufacturing, rather than place of origin. With this country’s relatively green grid and ongoing efforts to reduce emissions, many of our heavy industries already produce lower-emissions products than international competitors.

Buy Clean policies are, therefore, well-positioned to support Canadian industry and jobs all while incentivizing even greater decarbonization efforts, in turn increasing our competitiveness through modernization and productivity gains.  

Over the past four years, state and (now cancelled) federal Buy Clean policies in America have moved $ into clean materials for construction projects, and a further $ for roads and transportation.  

A unified commitment from governments to prioritize Buy Clean would have a meaningful impact on the sector today, but, of course, it could be even greater depending on the scale of future government spending on infrastructure and housing. Canada needs to build 3.5 million homes by 2031, which would use a wide range of Canadian-produced materials beyond steel and aluminum, including cement and forest products—heavy industry outputs that are also often produced cleaner domestically.

The tariff-induced pressure to improve the interprovincial trade of energy and goods will also likely bring with it the need to upgrade and expand transportation and electrical transmission infrastructure, on top of ongoing efforts to rebuild after increasingly common natural disasters. In short, the public purchasing of steel, aluminum, and other construction materials is moving in a clear direction. 

Canada is undoubtedly facing turbulent times. Tariffs, falling productivity, and the rising cost of living are all putting pressure on businesses and families alike. Governments are facing scrutiny and are looking at new ways to address these challenges. But it’s key in these moments that we look to powers we already have—and advantages that we might not be fully leveraging. 

The time is ripe for the import of good ideas. While U.S. President Donald Trump pulls back from policies that are already supporting clean, domestic industries in his country, let’s help our own steel and aluminum companies by buying clean right here at home. 

This post first appeared in the Hill Times.