Ontario and Ottawa Partner to Support Algoma Steel in Face of U.S. Tariffs
$500 million in loans will help safeguard Northern Ontario jobs and stabilize Canada’s steel industry.
SAULT STE. MARIE — The governments of Ontario and Canada are stepping in to protect one of Northern Ontario’s largest employers as U.S. tariffs continue to disrupt Canada’s steel sector.
On Monday, the province and federal government announced a joint $500 million investment in Algoma Steel Inc. through loan agreements designed to provide liquidity and long-term stability.
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Ontario will provide a $100 million loan through its Protect Ontario Financing Program.
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The federal government is committing a $400 million loan through the Large Enterprise Tariff Loan (LETL) facility.
The investment will give Algoma the financial flexibility to pivot away from U.S.-dependent markets while continuing to anchor Northern Ontario’s economy.
Protecting Jobs in Sault Ste. Marie
Algoma Steel, founded in 1901, is the largest employer in Sault Ste. Marie and the second-largest private sector employer in Northern Ontario. The company is currently undertaking one of Canada’s largest industrial decarbonization projects by transitioning to Electric Arc Steelmaking.
The combined loans aim to ensure that Algoma’s workforce and operations remain viable despite U.S. tariffs imposed in June 2025, which set a 50 per cent duty on Canadian steel imports under Section 232.
“Working in partnership with the federal government, Ontario is doing its part to protect workers and communities that are being targeted by U.S. tariffs,” said Peter Bethlenfalvy, Ontario’s Minister of Finance. “We will continue making every effort to use Ontario steel wherever possible, including in our $200 billion infrastructure plan, so we can create new opportunities for Ontario steelworkers.”
Canada’s new government is strengthening our steel industry and protecting our workers. pic.twitter.com/DBkJmZJwxr
— Mark Carney (@MarkJCarney) September 29, 2025
Support for Northern Ontario’s Economy
George Pirie, Ontario’s Minister of Northern Economic Development and Growth, emphasized Algoma’s role in the region’s prosperity:
“Algoma Steel plays a key role in the North’s economy and Ontario’s manufacturing sector. We are supporting Algoma Steel in the face of U.S. tariffs and changes in the global market so the company can continue to drive growth and economic opportunity in the North.”
Federal Minister of Finance and National Revenue François-Philippe Champagne added:
“It’s time to build big, build bold, and build the strongest economy in the G7 using Canadian steel. The support announced today will help Algoma manage the financial impact of U.S. tariffs. This investment is about helping them adapt operations, stay competitive, and most importantly protect the jobs and the workers who drive this industry.”
Canada’s Steel Sector Under Pressure
Ontario is Canada’s steel-making hub, home to three major producers and a supply chain that employs 16,500 workers. The steel and aluminum industry is tightly integrated across North America, supplying critical materials to automotive, construction, and manufacturing sectors.
Algoma’s unique position as the only independent, publicly traded Canadian steel producer has made it particularly vulnerable to U.S. trade measures. Without government intervention, the 2025 tariffs risked undermining not only the company’s financial health but also thousands of jobs tied to Northern Ontario’s manufacturing base.
The Bigger Picture
This latest investment underscores the broader effort by Ontario and Canada to shield domestic industries from external trade shocks. It also highlights the province’s commitment to channel Ontario-made steel into infrastructure projects, aligning industrial policy with economic and environmental goals.
By safeguarding Algoma, governments are aiming to protect workers, maintain Northern Ontario’s economic base, and strengthen Canada’s competitiveness in global markets.
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