During the recent aluminum tariff “trade war” between the US and Canada, the lowly beer can became a sign of the entire debacle. It began on August 6 when the US announced a ten per cent tariff on aluminum from Canada, to take effect August 16.
This was the second time in three years that such a tariff had been imposed by the US, with the Trump administration claiming that Canada had unfairly increased its exports and become a “threat to US national security.”
On August 28, the owner of a small Ottawa brewery told CBC Radio’s “As It Happens” that the tariff was costing his company an extra two cents for every can, because no beer cans are manufactured in Canada. Statistics Canada data from 2018 shows that Canada imports more than two billion beer cans annually.
So we brew our own beer, we smelt the aluminum, but we import the beer cans. It’s hard to see the logic in that.
Indeed, after the US tariff announcement, Jean Simard, the president and CEO of the Aluminium Association of Canada, told the New York Times (August 6) that he would be pushing the Canadian government to retaliate by applying tariffs on American-made aluminum products. “We can drink Canadian beer out of Canadian cans,” Simard said.
But on September 15, just hours before Canada was set to impose its own aluminum tariffs, the US government backed down and removed its tariffs. Mr. Simard then seemed to have lost his resolve about beer cans and instead was quoted as saying that “you can’t manage trade on a commodity like aluminum.” Simard did not respond to requests for an interview.
For her part, Deputy Prime Minister Chrystia Freeland declared, after tariffs were dropped, that “common sense has prevailed.”
But a closer look at the aluminum situation suggests that common sense has little to do with it. In fact, like most globalized businesses, the aluminum industry looks more like a Rube Goldberg-style absurdity machine than a model of “common sense.”
Rube Goldberg machine
A century ago, financiers from the US and UK selected Quebec as the site for aluminum production because of its hydropower potential, and set about erecting dams to power a smelter complex throughout the Saguenay River Valley. The Inuit and Cree communities had little say in the process that displaced them for the sake of a North American aluminum industry.
Canada now has nine primary aluminum smelters – eight in Quebec and one in Kitimat, BC – with three owned by US-based Aluminum Company of America (Alcoa), five owned by UK/Australia-based Rio Tinto (which bought Alcan in 2007), and one (Aluminiere Alouette) owned by a consortium that is six per cent owned by Quebec. It’s hard to consider this a “Canadian” industry, but that’s the euphemism that is always applied. These are the members of Jean Simard’s Aluminium Association of Canada. Oddly, the US administration considered a US company (Alcoa) – which owns one-third of the Canadian smelters – to be a part of this “national security threat.”
Aluminum is infinitely recyclable and melting aluminum for recycling uses 95% less energy than using virgin ore.
Bauxite, the ore that is the basis for aluminum, is not mined in Canada, so the smelting companies import the ore from Guyana, Jamaica, Guinea, and Australia. The ore travels thousands of miles to the smelters by fossil fuel-powered vessels, a factor not calculated into the industry’s claims to be a low-carbon venture in Canada (due to the use of hydro power for smelting rather than gas or coal).
Alcoa and Rio Tinto are also the world’s top two bauxite mining companies, owning many of the mines in those countries, where they have been accused of environmental and human rights violations. Rio Tinto is currently under fire for destroying Aboriginal heritage sites in Australia.
These smelters are called “primary” because they only accept “virgin” input (bauxite and/or alumina), not recycled aluminum. In this they are like the plastics industry, which insists on “virgin” input rather than adapting to utilize the mountains of plastic waste.
Aluminum, however, is infinitely recyclable, and according to www.recycleeverywhere.ca, melting aluminum for recycling “uses 95% less energy than using virgin ore” because the temperatures needed are significantly lower than primary smelters.
Light Metal Age magazine states that there are some 42 secondary aluminum producers in Canada (four in BC and most in Ontario and Quebec), which take recycled aluminum for melting – but currently their capacity is paltry compared to the big nine smelters, who send their aluminum ingots, rolls of sheeting, etc. to the US.
Huge companies such as Crown Holdings Inc. (global headquarters in Yardley, Penn.) and Ball Corporation (global headquarters in Broomfield, Co.) manufacture billions of beer cans to sell back to Canadian breweries. Ball Corporation buys some of its aluminum rolls from recycler Novelis.*
A spokesperson for labour union Unifor – which represents smelter workers – told me by phone that they would be in favour of Canada manufacturing its own beer cans on a large scale. “We are in favour of an increase in any sector of manufacturing in Canada,” he said, and added that Unifor is “not opposed” to using recycled aluminum.
Perhaps a lesson can be learned from Canada’s experience with personal protective equipment (PPE) for the pandemic. Initially, Canada was importing all its PPE from other countries. But in March, according to The Energy Mix (September 4), the federal government issued a “call to action” and more than 6,000 Canadian companies offered expertise and capacity to manufacture what was needed, and 1,000 companies retooled to manufacture PPE.
This is an indication that industry can “turn on a dime” when necessary.
Maybe it’s now time for recycling to turn on a dime. Year after year, Statistics Canada data has shown that our recycling of metal is on a downward trend, with less and less diverted from landfill. Perhaps if there were regional secondary aluminum producers in every province, along with local can manufacturers to supply the more than one thousand small breweries across the country, we would “drink Canadian beer out of Canadian cans.”
See Canadian Environmental Sustainability Indicators: Solid waste diversion and disposal, Environment and Climate Change Canada, 2018, www.canada.ca/content/dam/eccc/documents/pdf/cesindicators/solid-waste/2018/solid-waste-diversion-disposal-en.pdf
Award-winning author Joyce Nelson’s latest book, Bypassing Dystopia, is published by Watershed Sentinel Books.
*A Giant in Recycling Beer Cans
Before being bought up by Rio Tinto in 2007, Alcan created the means for turning billions of discarded aluminum cans into new ones. In 1989, it established “melting facilities” for UBCs (used beverage containers) at five locations, including at Berea, Kentucky. By 2001, the Berea plant had become the largest aluminum recycling facility in the world.
In 2005, this part of Alcan was spun off as a company called Novelis and in 2007 it was bought up by the Indian conglomerate Aditya Birla Group. By 2019, Novelis was recycling 60 billion beer cans per year, accounting for 61% of the company’s recycled content. Ironically, the cans are shipped from recycling centers around the world.
Novelis had long touted its “urban mines” rather than geophysical mines, which may be why Rio Tinto showed no interest in Novelis when it purchased Alcan.
This article appears in our December 2020 | January 2021 issue.