Ontario Construction News staff writer
Algoma Steel Group Inc. has secured C$500 million in combined federal and provincial loan facilities to help the company weather ongoing trade challenges and accelerate its transition to Electric Arc Furnace (EAF) steelmaking.
The financing package includes $400 million in unsecured loans from the Government of Canada under the Large Enterprise Tariff Loan facility and $100 million in secured loans from the Province of Ontario. The funds will provide liquidity as the company navigates the impact of steep U.S. tariffs on Canadian steel, which have effectively shut out domestic producers from their largest export market.
Federal Economic Development Minister Patty Hajdu joined Ontario representatives Will Bouma and Bill Rosenberg in Sault Ste. Marie Monday to make the announcement alongside Algoma CEO Michael Garcia, CFO Rajat Marwah, and workers from the mill.
“The ongoing imposition of a 50% tariff on Canadian steel has closed the U.S. market to Canadian steelmakers,” said Garcia. “We require this liquidity support to withstand this unprecedented U.S. governmental action, and importantly, to continue our transformation for the future. Algoma is poised to be a critical contributor to our nation’s agenda of building a stronger, more competitive, and prosperous economy.”
As part of the terms, the federal loan will be accompanied by 6.77 million share purchase warrants exercisable at C$11.08 over 10 years, aligning government support with Algoma’s long-term growth. The financing will also carry restrictions on capital distributions and require standard approvals.
At the same time, Algoma said it will begin phasing out its blast furnace and coke oven operations, which have become unsustainable under current market conditions. The company is shifting production toward its nearly C$1-billion EAF project, which is expected to modernize operations, reduce emissions, and focus production on as-rolled and heat-treated plate and select coil products for Canadian markets.
“By combining essential liquidity with targeted support for our transition to EAF steelmaking, this support allows us to move forward with confidence — aligning operations with market realities, advancing the EAF strategy, and safeguarding Algoma’s future,” said Marwah.
Government officials said the investment reflects Algoma’s importance to the national industrial base, particularly in supporting infrastructure, manufacturing, and defense projects.
