Province hasn't given promised money to Essar Steel Algoma. Yet

So what happened? Just this past summer, politicians were positively crowing about Essar Steel Algoma's dazzling future. On a hot July day, they stood outside an even hotter Essar direct strip production complex.

So what happened?

Just this past summer, politicians were positively crowing about Essar Steel Algoma's dazzling future.

On a hot July day, they stood outside an even hotter Essar direct strip production complex.

Standing proudly with Kalyan Ghosh, Essar Steel Algoma president and chief executive officer, were:

Gary Goodyear, minister of state for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario).
Sault MP Bryan Hayes.
Michael Gravelle, Ontario minister of Northern Development and Mines.
Sault MPP David Orazietti

The politicians had come bearing gifts.

"This has been the largest investment since the Second World War, by any government, in this mill…we want to make sure we keep our economy strong here in Sault Ste. Marie," Orazietti said.

It was supposed to be the best news in decades for our steel mill - the the second-biggest integrated steel producer in Canada.

The province would provide $30 million to modernize Essar Steel Algoma.

The federal government would provide a $30-million interest-free loan.

Essar Steel would do the heavy lifting, paying for $180 million in infrastructure improvements.

In all, a $240-million investment.

That was on July 24.

Today, on November 9, just 109 days later, Essar Steel Algoma filed under the Companies’ Creditors Arrangement Act for protection from its creditors.

So what happened to all that cash from the provincial and federal governments?

At time of writing, we don't know whether Essar received the federal loan.

But Sault MPP David Orazetti, Ontario's minister of government and consumer services, told us tonight that so far only $1 million of the province's promised $30 million has flowed to the company..

"We’re commited to see that plan through, said Orazietti, referring to Essar's $240 million infrastructure modernization plan for its Sault assets.

The infrastructure cash is flowing "based on the work being done," he said.

"I’m cautiously optimistic. There are obviously concerns there are hurdles to overcome."

"They’re commited to do everything that they can to keep people working in our community. They are facing very serious global pressures in this sector."

"We’ll continue to be in close contact to provide whatever provincial support we are able to."

Orazietti spoke today to Essar's Kalyan Ghosh.

"Obviously from a provincial perspective, I’m concerned about any job losses," he said.

"We believe there is a future for steelmaking in Sault Ste. Marie and Nothern Ontario but we are facing global pressures."

"I’m optimistic that the company can be restructured in a way that enables them to move forward with gainful employment in our community."

Orazietti was also expressing concern today about one issue cited by the company as a factor in its CCAA restructuring: the dumping of cheap Chinese steel into North American markets.

The problem is that steel is finding its way into North American markets through other countries.

"We need stronger tariffs to prevent dumping no matter where it's coming from," Orazietti told SooToday.

"We should be looking at anti-dumping tariffs that protect steel industry jobs in Canada, most of which are in Ontario," he said.

(FILE PHOTO: Product at Essar Steel Algoma, July 24, 2015. Darren Taylor/SooToday)

Earlier SooToday coverage of this story

Sheehan talks to Essar CEO. He's not asked to help

'We expect to come out of this a much stronger company' - Kalyan Ghosh

Mayor already talking to Essar Steel Algoma

Essar Steel Algoma to continue operations during restructuring

Essar Steel Algoma enters creditor protection, says report