Title: Algoma Steel Secures $500M in Loans Amid U.S. Tariffs

Algoma Steel Group Inc., based in Sault Ste. Marie, Ontario, will receive $500 million in loans from federal and provincial governments to adapt its operations in response to U.S. tariffs. Federal Jobs Minister Patty Hadju announced the funding on Monday at the steel mill. The federal government will provide $400 million through its Large Enterprise Tariff Loan program, while the Ontario government will contribute an additional $100 million.

The loans aim to help Algoma Steel maintain its workforce and continue operations while transitioning to a business model that is less dependent on the U.S. market. The federal government has described the impact of U.S. tariffs on the Canadian steel sector as "profound." In March, Ottawa introduced a $10 billion financing program to assist companies affected by these tariffs.

Algoma Steel has been facing significant challenges due to a 50 percent tariff on Canadian steel exports to the United States. CEO Michael Garcia expressed concerns about the tariffs' effects on the company's operations. He stated, "We are taking a measured and disciplined approach to evaluating the implications of sustained trade barriers."

The company plans to transition to electric arc furnace steelmaking, a process that is generally more energy-efficient than traditional blast furnaces. This transition is expected to cost approximately $987 million. Garcia noted that the ongoing tariffs have made some of Algoma's current operations unsustainable and have accelerated the need for this shift.

The federal government has been advocating for increased use of domestic steel in Canadian infrastructure and defense projects to support the struggling steel industry. Industry Minister Mélanie Joly emphasized that the loan to Algoma Steel is part of a broader strategy to "build resilience" in Canada’s steel sector for the future.

Algoma Steel, founded in 1901, is one of North America's leading manufacturers of hot- and cold-rolled steel products. The company currently employs around 2,500 full-time workers in Sault Ste. Marie, a city with a population of approximately 72,000. The funding is seen as crucial for the company to navigate the challenges posed by international trade policies and to ensure its long-term viability in the steel market.