Liberals aware of Algoma Steel layoffs before granting $400M loan
Algoma Steel had informed the Carney government that it planned to lay off 1,000 employees before it was given half a billion in taxpayer money, according to the company’s CEO, Michael Garcia.
Algoma Steel had informed the Carney government that it planned to lay off 1,000 employees before it was given half a billion in taxpayer money, according to the company’s CEO, Michael Garcia.
Canada’s last remaining independent steel producer, which employs about 2,500 workers, announced the layoffs on Monday because its blast furnace and coke-making facilities are shutting down to transition to electric-arc furnace steelmaking by early next year. The layoffs take effect on March 23.
“We expected that transition to happen in early 2027 or late 2027, but with the dynamics and the significant change to our available markets, with the U.S. tariffs, the future has arrived early at Algoma Steel,” Garcia told CTV News on Wednesday.
In September, the Carney government provided Algoma with a $400 million loan, while the Ontario government agreed to put up $100 million under the same terms. The company first applied for a $500 million loan from the Liberals back in July.
When asked whether Ottawa and Ontario knew layoffs were coming before agreeing to the $500 million loan, Garcia said the “government certainly knows our business strategy.”
“It knows the pivot that we had to make. It knew very well the extreme pressure the company was under. I don’t think anybody would loan the company half a billion dollars without asking very detailed questions about what our business plan was,” he said.
In response to the layoffs, Industry Minister Mélanie Joly said that the goal of giving Algoma the money was to “make sure the company would get through these months, while they were working on pivoting and adapting their entire operations.”
She went on to say that Ottawa believes that such “investments” would mean “more jobs can come back to Algoma.”
Joly cited the possibility of a “new beam steel plant and also a new plate steel plant” that would support the housing sector and defence.
However, while Garcia agreed that Algoma Steel may invest in that production, he noted that it would only create 400-500 jobs in the years to come, adding that it wouldn’t replace the 1,000 jobs that were lost as a result of these layoffs.
“Once we shut down the blast furnace and the coke ovens, those jobs are not coming back. Those operations are not coming back,” he said.
Meanwhile, when Prime Minister Mark Carney announced the Ksi Lisims natural gas liquefaction facility as part of the second wave of nation-building, it came to light that it would be owned by an American company and built with Chinese steel.
Texas-based Western LNG owns the Ksi Lisims project and plans to have it built in Korea, using Chinese steel.
Carney was asked during the press conference how much taxpayer money Canadians should be prepared to invest in an American-owned and foreign-built project.
The prime minister responded that “there are structures that come with the project that ensure” there will be “returns to taxpayers through the tax system,” adding that the Prince Rupert Gas Transmission pipeline would be “First Nations owned.”
“The structure of the financing is a decision that we take with the full information, the full information of the project. The project design is with that,” he said. “So that’s part of…we answer that question with full information by doing the work, and that’s what the referral to the Major Projects Office facilitates.”