Algoma Steel applies for $500M federal loan as it faces U.S. tariffs
In a news release, the company is "concerned with the significant impact" the tariffs are having on its operations and outlook.
The loan application is through the federal Large Enterprise Tariff Loan program, established to soften the blow of U.S. tariffs imposed on certain industries.
"We are taking a measured and disciplined approach to evaluating the implications of sustained trade barriers," said Algoma Steel CEO Michael Garcia in a news release.
"We continue to call for timely, prudent policy support to ensure Canadian steelmakers can remain viable contributors to the national interest. A strong Canadian steel industry is essential to Canada's economic strength, environmental goals, and national security. With the right frameworks in place, we are confident Algoma will emerge from this period as a vital part of Canada's nation-building agenda."
In the news release, Algoma Steel noted it is Canada's only independent and publicly owned steelmaker, and the country's only producer of steel plate.
The company is close to completing a $900-million upgrade to its operations in Sault Ste. Marie with the construction of an electric arc furnace, which will significantly reduce emissions.
"Algoma has sufficient resources on hand to manage its liquidity over the near term," the news release said.
"However, given the ongoing uncertainty caused by the U.S. tariffs resulting in a structural imbalance in the Canadian market, the company is considering various alternatives to bolster liquidity."
Targeted support for the steel industry
In a statement to CBC News, John Fragos, a spokesperson for the Minister of Finance and National Revenue, did not directly address Algoma Steel's loan application.
"Our government is working in lockstep with all its partners, including provincial and territorial governments, industry leaders, union representatives and stakeholders to respond in real time to tariffs and the impact they are having on Canada's businesses and workers," Fragos said in the statement.
"In March this year, our government unveiled the Large Enterprise Tariff Loan initiative, a new $10 billion financing facility to support Canadian companies through current and potential tariffs and countermeasures – and provide certainty and stability amid persistent uncertainty."
Fragos said the terms of the program were revised on July 16 to provide more targeted support for Canada's steel industry.
"Together we will do what is necessary to protect our steel industry and the many Canadian workers who are helping build our country," he said.
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