Algoma Steel receives half a billion in government loans amid U.S. tariffs
Ontario’s Algoma Steel Inc. will receive half a billion dollars in federal and provincial loans to alleviate the financial damage caused by U.S. tariffs on the Canadian steel manufacturer.
Ontario’s Algoma Steel Inc. will receive half a billion dollars in federal and provincial loans to alleviate the financial damage caused by U.S. tariffs on the Canadian steel manufacturer.
“Algoma has been at the forefront of some of the most aggressive tariff action that we face from the United States. Over the past number of months, we’ve seen the results of that tariff action and the way that it’s impacting Algoma’s capacity to produce for the American market,” said Jobs Minister Patty Hadju at the steel mill on Monday.
“You’ve produced the steel that has built this country, whether it’s in bridges, powering industries, supporting thousands of good-paying jobs. The federal government, as you know, has stepped up with the provincial government to make sure we can actually protect this industry. Listen, steel is the backbone of our country.”
The federal government will provide Algoma with a $400 million loan, while the Ontario government has agreed to put up $100 million under the same terms.
The company first applied for a $500 million loan from Ottawa back in July.
Founded in 1901, Algoma Steel is located in Sault Ste. Marie, Ont., and is the city’s largest employer, with a workforce of roughly 2,600 people.
Additionally, the company is now one of North America’s leading manufacturers of hot and cold-rolled steel sheet and plate products.
According to a press release from the Government of Canada, the binding term sheet will grant the company “financial assistance through the Large Enterprise Tariff Loan facility to help Algoma Steel Inc. continue operations, transition to a business model less reliant on the United States, and limit disruption to its workforce.”
The government announced the creation of the LETL in March, which is a $10 billion financing facility launched to support Canadian companies affected by tariffs and countermeasures.
“[The tariffs] have taken our largest historical market and effectively closed it to us,” said Algoma Steel CEO Michael Garcia on Monday. “We have to adjust our production down, take costs down and pivot to a future where primarily we are thriving on a Canadian domestic steel market.”
Further details regarding the loan, such as interest charges, have yet to be released to the public.
However, Garcia believes that the company will be able to thrive amid U.S. tariffs because of Prime Minister Mark Carney’s pledge to bolster defence spending, using Canadian steel.
“If you look at the future, Prime Minister Carney and the new government have been talking about, it’s a future that involves more defence spending, more marine spending and infrastructure spending. Combine the government’s stated preference that steel needs to be Canadian, that’s going to result in a thriving domestic steel industry,” he said.
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