Algoma Steel seeking $500M in federal support amid ongoing concern over U.S. tariffs

CTV News

3 days ago

Algoma Steel says it is seeking a large loan from the federal government to ensure its survival in the face of huge tariffs being imposed by the United States.
Algoma Steel Group Inc. is seeking $500 million in federal support as the company faces continued uncertainty from U.S. tariffs on Canadian steel.
The Sault Ste. Marie, Ont.-based steel producer said Thursday that it applied for the funding under the Large Enterprise Tariff Loan program, announced by Ottawa in March to support companies affected by tariffs and countermeasures.
'We are taking a measured and disciplined approach to evaluating the implications of sustained trade barriers,' said chief executive Michael Garcia in a statement.
'We continue to call for timely, prudent policy support to ensure Canadian steelmakers can remain viable contributors to the national interest.'
The company says it remains concerned with the 'significant impact' U.S. tariffs are having on its operations and outlook. The U.S. doubled its steel and aluminum tariffs to 50 per cent in June, a level the Canadian Steel Producers Association has said effectively shuts it out of the market.
Last year, Canadian steel producers exported just over half of their production, with over 90 per cent of it going to the U.S.
Algoma says it has enough capital in the near term, but given the uncertainty created by tariffs it is looking at various ways, including government support, to boost its liquidity.
It said the capital boost would help give it room to diversify its customer base as it explores potential investments that align with long-term domestic demand from industries like defence and construction.
The amount of additional financing it could seek will partly depend on the duration and severity of the trade dispute and how much the Canadian steel market 'remains exposed to unfairly priced imports,' it said.
The federal government has already moved to reduce steel imports that the industry says are unfairly subsidized, especially from China.
The government imposed 25 per cent tariffs on Chinese steel products last fall, while last week it announced increased protection measures, including 50 per cent tariffs on steel imports above certain thresholds, and a 25 per cent surtax on imports that contain steel that originated in China.
The added supports announced July 16 also included revised terms for the $10 billion Large Enterprise Tariff Loan program to allow targeted support for the steel industry.
Changes include reducing the proposed interest rate, extending the loan maturity, enabling the government to hold equity in companies, as well as requiring companies to prioritize worker retention.
At the time, the Canadian Steel Producers Association welcomed the supports, which also included other financial supports and explicit prioritization of domestic steel in federal projects.
'We appreciate the government's support as the consequences are devastating from the unjustified trade action by the United States administration,' said chief executive Catherine Cobden in a July 16 statement.
Algoma which had about 2,800 employees at the end of last year, bills itself as Canada's only independent and publicly-owned steelmaker, and says it is the only Canadian producer of steel plate.
The company reported a net loss of $24.5 million last quarter compared with a $28 million profit a year earlier. The company listed lower pricing, linked to a drop in demand because of trade uncertainty, along with higher input costs as major factors in the drop.
The company is almost done a $900 million project to switch to electric arc furnace steelmaking that should slash emissions by 70 per cent. The project was supported by $420 million in federal funding.
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Ian Bickis, The Canadian Press
This report by The Canadian Press was first published July 24, 2025.