Algoma Steel Group Inc. is set to receive half a billion dollars in government loans to help it reorient its business away from the United States as the federal government argues supporting the domestic steel industry is a matter of Canadian sovereignty.
Ottawa’s $400 million in financial assistance will come from the Large Enterprise Tariff Loan program, a $10-billion tariff relief fund set up in March. The Ontario government will also provide $100 million to the Sault Ste. Marie, Ont.-based company.
The loans are to help Algoma Steel continue operations, limit disruption to its workforce and move to a business model that isn’t as reliant on the United States.
Patty Hajdu, minister for jobs and the federal government’s northern Ontario development agency, said in an interview Monday that steel forms the “backbone of sovereignty” in Canada amid shifting global trade currents.
Algoma CEO Michael Garcia said in a release that U.S. President Donald Trump’s ongoing 50 per cent steel tariffs have effectively closed the American market to Canadian steel.
That has made some of Algoma’s existing operations unsustainable and pushed up timelines for the company to transition to electric arc furnace steelmaking — typically a more energy efficient process than traditional blast furnaces. Algoma expects this transition to cost $987 million by completion.
That turnaround is also expected to help Algoma produce more of the kind of steel Canadian industry needs.
Hajdu said Canada can’t necessarily rely on foreign steel for the kinds of nation-building projects it’s putting on the table as part of a fundamental restructuring of the economy.
The U.S. tariff dispute and other global trade realignments have companies rethinking their footprints in some countries, she said, which makes supporting firms that are committed to Canada all the more crucial.
“Anchoring our…
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