Introduction

The aluminum industry in Quebec, comprising approximately 1,700 companies, is grappling with significant challenges as a result of Donald Trump's 25% tariffs on Canadian aluminum and steel, which were implemented on March 12, 2023.

These companies produce a wide variety of products, ranging from ambulance doors to window frames, with around half of them located in the greater Montreal area.

Impact of Tariffs on Manufacturers

Amid warnings from industry leaders about the detrimental effects of these tariffs, the reality has set in for manufacturers, many of whom operate with slim profit margins and small workforces.

As François Racine, president of industry lobby group AluQuébec, stated, "These are businesses that were operating well, that were in expansion mode," highlighting the abrupt shift in fortunes.

Scope of the Tariffs

The sweeping tariffs apply not only to primary aluminum but also to finished products, compounding the already fragile situation.

In contrast to the last instance of U.S. tariffs in 2018, this recent round also coincides with additional retaliatory tariffs from Canada, as well as threats of further 25% tariffs tied to unrelated issues such as illegal immigration and drug trafficking.

Case Study: Bousquet Technologies

Bousquet Technologies, a leading manufacturer based in Sainte-Julie, has seen its plans for U.S. expansion hit a significant snag as customers search for alternate suppliers in response to the tariffs.

CEO Michel-André Lamarche noted that even with a weakened Canadian dollar, the increased costs have priced them out of the market.

The production line at Bousquet has been visibly affected, with around half of their units finished but not shipped due to a lack of new contracts.

The company has adjusted its workforce from 180 to 165 employees, changing work schedules to adapt to the reduced demand.

Impact on Cyrell AMP

Nearby, Cyrell AMP, known for its architectural panels, is also feeling the impact.

Director Amélie Poirier-Borduas indicated that contracts were lost due to clients withdrawing from deals over fears of inflated prices from tariffs.

This loss has already cost the company between $1.5 million and $2 million in potential sales, forcing management to delay factory expansions and reduce hours, leaving workers to turn to side jobs just to make ends meet.

Exploring New Markets

As companies like Cyrell reconsider their markets, eyes are turning to Europe and other Canadian provinces, which were previously overlooked due to the ease of trading with U.S. clients.

The tariff situation has opened a window for businesses to explore new avenues, but the uncertainty remains a daunting challenge for many.

Rethinking Strategies at ALU MC3

ALU MC3, another metal manufacturer, has had to rethink its strategies entirely as it faces increased raw material costs and tariffs on finished products sent to the U.S.

President Bruno Montgrain is looking for ways to mitigate losses by seeking tariff exemptions and exploring supplier loopholes to maintain profitability without sacrificing staff.

Conclusion

As the ripple effects of the tariffs continue to unfold, it's clear the Quebec aluminum sector finds itself at a crossroads.

Companies are not only battling tariffs but are also compelled to adapt to an unstable market environment shaped by unpredictable political decisions.

The coming months will determine whether these manufacturers can withstand the pressure or if they will be forced into deeper cuts and strategic re-evaluations to survive in an increasingly competitive landscape.

This tumultuous phase calls attention to the broader implications of trade policies that affect manufacturers and workers alike, as the stakes grow higher for industry players looking to adapt and thrive amidst escalating tensions.