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$150 million in loans to help Algoma Steel Inc. restructure, modernize operations (3 photos)

Funding a step towards steelmaker's eight year, $600 million plan to modernize and expand in wake of U.S. imposed steel tariffs
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The federal government is providing Algoma Steel Inc. $90 million in ‘repayable contributions’ to help the Sault Ste. Marie steelmaker deal with U.S. tariffs on steel and aluminum.

Ontario has also loaned $60 million to the steelmaking operation to support its restructuring process.  

Economic Development Minister Navdeep Bains and Ontario Northern Development Minister Greg Rickford were joined by Sault Ste. Marie MP Terry Sheehan and Sault Ste. Marie MPP Ross Romano at the steel plant Thursday afternoon to make the announcement.

“That $90 million investment from the federal government really reflects the fact that we’re standing shoulder to shoulder with the steelworkers and the steel industry, and that investment is to modernize the plant, to make it more competitive,” Bains told reporters following the announcement. “It’s really about a long term investment to make sure that we secure and maintain over 3,000 jobs in Sault Ste. Marie.”

The support comes at a time where steel and aluminum producers are facing tariffs imposed by U.S. President Donald Trump last June.

Ottawa has been fighting for removal of those tariffs - even imposing tariffs of its own on a number of imported U.S. goods - but the levies against Canada are still in place.

Last summer Ottawa announced a tariff relief package that included up to $2 billion for steel, aluminum and manufacturing sectors, with an additional $1.7 billion worth of financing and services earmarked for steel and aluminum industries through the Business Development Bank of Canada and Export Development Canada.

“We’ll continue to engage the U.S. administration,” said Bains. “Prime Minister Trudeau did speak with President Trump about this issue.”

My colleagues Chrystia Freeland, Bill Morneau and myself have been working with our counterparts,” he continued. “This is a priority for our government - we want to see these unjust and unfair tariffs removed.”   

Bains says the investment in Algoma Steel Inc. - which is part of the steelmaker’s eight year, $600 million commitment to modernize its operations while expanding capacity and enhancing capabilities for advanced grades of steel - will help the company remain competitive down the road.

“This is about being more competitive,” Bains said. “This is about investing modernization of the plant, which will enable [Algoma Steel Inc.] to succeed in the long run.”

Meanwhile, the provincial government says the $60 million loan to Algoma Steel Inc. will provide pension regulatory relief and eligibility for Pension Benefits Guarantee Fund coverage.

Rickford told reporters that the loan will ensure pensioners access to a safe, reliable pension moving forward.

“We’re creating an opportunity, and a responsible use of taxpayers dollars,” Rickford said. “I think the more important narrative here is the three steps that have essentially facilitated restructuring and put Algoma on a solid fitting.”

The province has also negotiated an agreement that requires Algoma Steel Inc. to kick in $3.8 million per year over the next 21 years in order to identify and remediate past environmental contamination.

“To facilitate restructuring, we walk lock step with Algoma Steel through a process that we think is fair, reasonable and responsible in terms of protecting the environment and a plan for remediation of old sites,” Rickford said.   

Algoma Steel Inc. CEO Kalyan Ghosh told reporters that the modernization and expansion program will enable the steel plant to produce new grades of steel for the automobile industry and enhance the capacity and the capabilities of the steel facility’s plate and strip mill.

- with files from The Canadian Press




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