Algoma Steel Group Inc. will receive $500 million in loan assistance from the federal and Ontario governments to help stabilize operations and accelerate its transition to more sustainable steelmaking amid the ongoing impact of U.S. tariffs.
The financing includes $400 million from Ottawa under the Large Enterprise Tariff Loan Program and $100 million from the Government of Ontario. Ottawa launched the $10-billion program earlier this year to support Canadian industries hit hardest by trade restrictions.
Impact of U.S. Tariffs
Algoma CEO Michael Garcia said U.S. President Donald Trump’s 50 per cent tariffs have “effectively closed the American market to Canadian steel,” rendering some operations unsustainable and forcing the company to accelerate its move to electric arc furnace (EAF) steelmaking.
The transition to EAF—considered more energy efficient than traditional blast furnaces—carries a projected cost of $987 million. Garcia said the shift will not only reduce reliance on U.S. markets but also allow Algoma to produce the type of steel increasingly demanded by Canadian industries.
Supporting Canadian Workers
The federal government emphasized that the assistance will ensure Algoma can maintain operations, protect jobs, and reduce disruptions to its 2,500 full-time employees. Ottawa has also been pressing for more Canadian-made steel to be included in domestic infrastructure and defence projects, further shoring up demand for the sector.
Building Resilience
Industry Minister Mélanie Joly framed the loan package as a long-term investment in Canada’s industrial strength:
“This is about building resilience in Canada’s steel industry for decades to come. Supporting Algoma’s transition not only secures good-paying jobs in Sault Ste. Marie but strengthens our supply chain and competitiveness globally.”
With the loans in place, Algoma is set to move forward with its transformation into one of the country’s leading producers of low-emission, high-quality steel for domestic and international markets.