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City to break silence on steel mill's property tax deal

Special City Council meeting called for Monday
CivicCentreSunsetBridgeDHel
International Bridge is seen reflected in Civic Centre windows. David Helwig/SooToday

We're expecting to learn more next week about a pending deal between the City of Sault Ste. Marie and Essar Steel Algoma Inc. on the steelmaker's big-as-a-barn-door property tax bill.

City Council will hold a special meeting Monday on the subject.

Earlier this week, councillors met behind closed doors to be briefed on how the steel mill intends to address its municipal tax obligations.

Since last October, Algoma has been paying $500,000 a month to the city, but it remains almost $25 million in arrears, including $14 million in taxes originally payable at the time Algoma entered insolvency protection in November of 2015.

One year ago, Mayor Christian Provenzano and Al Horsman, the city's chief administrative office, announced that an agreement in principle on Essar Steel Algoma's past and future property tax obligations had been reached with Algoma's term lenders

"I can confirm that City Council is satisfied with the agreement in principle and is confident that that if the city receives the funds due to it in accord with the agreement, we will not have to decrease services or increase taxes as contemplated by the city's motion materials filed to date," the mayor said at that time.

Superior Court Justice Glenn Hainey will be asked next Wednesday to approve the sale of nearly all assets of Essar Steel Algoma Inc. to a British Columbia-registered numbered company associated with Essar's term lenders and consenting senior secured noteholders.

A target date of Sept. 30 has been set to close the transaction, which covers worker pensions, city taxes, the co-generation plant, port and lenders who've kept Algoma afloat since it applied for protection against its creditors on Nov. 9, 2015.

Yesterday, federal Finance Minister Bill Morneau announced that the government will hold consultations over the next 15 days to consider new trade measures aimed at limiting steel imports through tariffs or quotas.

Ken Neumann, national director of the United Steelworkers, welcomed the news.

Steel dumping by China, South Korea, Turkey, Vietnam and other countries has plagued the North American steel industry for years, the unions said.

"Once U.S. President Donald Trump imposed tariffs on steel and aluminum earlier this year, it was obvious the Canadian government would need to take strong action to avoid increased and specific dumping into Canada as a result. In addition to fighting the imposition of U.S. tariffs onto Canada, the Steelworkers have consistently insisted that measures need to be taken by our federal government to protect Canada from further dumping as an indirect avenue into the American market," the national union said in a written statement.

"Today, the federal government has taken a needed step towards aiding and safeguarding the Canadian steel industry. We welcome it and look forward to further measures to aid this essential Canadian industry," added Neumann.