The primary employer in Sault Ste. Marie, Northern Ontario, is receiving $500 million in government loans to safeguard its workforce amidst U.S. tariffs. Federal Jobs Minister Patty Hadju disclosed this during a visit to the steel mill. The government is extending a $400 million loan through its “large enterprise tariff loan” to Algoma Steel, complemented by an additional $100 million from the Ontario government under similar terms.
This financial injection aims to support the plant in maintaining operations, transitioning to a less U.S.-dependent business model, and minimizing workforce disruptions. Minister Hadju emphasized the vulnerability of Canadian corporations to external challenges and technological advancements.
The loan is part of a $10 billion financing facility introduced in March to aid large companies in combatting tariffs and related issues, aligning with various tariff-focused initiatives for the Canadian steel sector by the federal government.
Algoma Steel’s CEO, Michael Garcia, highlighted the significance of the loans in navigating tariff-related hurdles while transitioning away from coke oven steel production. The company is compelled to recalibrate production, decrease costs, and pivot towards thriving in the domestic Canadian steel market as a result of the closed U.S. market.
Further details regarding the loans, including interest rates, will be disclosed in due course. Garcia stressed the importance of transparency and public oversight, given that the funding directly originates from Ontario and Canadian taxpayers. He expressed optimism about the steel industry’s future prosperity, citing governmental preferences for Canadian steel in national projects.
Garcia mentioned that while Algoma Steel’s plate-making sector remains robust, adjustments are needed in the coil business due to insufficient demand. The company is exploring diversification opportunities into products like beams, rail, and other steel forms.
Minister Hadju emphasized the loan’s significant investment in the Sault Ste. Marie workforce’s future, assuring support for potential retraining needs in case of temporary layoffs. Established in 1901, Algoma Steel is now a prominent manufacturer of hot- and cold-rolled steel products in North America, employing around 2,600 individuals in the city with a population of approximately 72,000.
In response to steep U.S. tariffs on Canadian steel exports, Algoma Steel had previously applied for a $500 million loan from Ottawa. The company expressed concerns about the tariffs’ detrimental impact on its operations and prospects in a prior news release.