SAULT STE. MARIE — The Ontario and federal governments are jointly investing $500 million in Algoma Steel Inc. to help the company weather the impact of steep U.S. tariffs and safeguard jobs in Northern Ontario’s steel industry.
The funding package, announced Monday, includes a $100-million loan from Ontario through its Protect Ontario Financing Program and a $400-million loan from Ottawa under the Large Enterprise Tariff Loan (LETL) facility. Officials say the joint effort will provide Algoma with the liquidity and operational flexibility needed to withstand volatile trade conditions and shifting global markets.
“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 Ontario Finance Minister Peter Bethlenfalvy. “Moving forward, our government will continue making every effort to use Ontario steel wherever possible, including in our more than $200 billion infrastructure plan, so that we can create new opportunities for Ontario steelworkers that will keep them on the job for years to come.”
A Strategic Industry Facing U.S. Tariffs
The move comes three months after Washington imposed a 50 per cent tariff on Canadian steel imports under Section 232 trade rules. The measure has hit Canada’s steel producers hard, with Algoma — the country’s only independent, publicly traded steelmaker — in a particularly vulnerable position.
Founded in 1901, Algoma is the largest employer in Sault Ste. Marie and the second-largest private sector employer across Northern Ontario. The company is also undergoing one of Canada’s most ambitious decarbonization projects as it transitions to electric arc steelmaking, an initiative aimed at reducing emissions and modernizing production.
“This direct support will help Algoma pivot its operations away from U.S. dependent markets and remain a commercially viable and economically stable source of jobs, growth and opportunity in Northern Ontario,” Bethlenfalvy said.
Commitment to Northern Ontario
George Pirie, Ontario’s Minister of Northern Economic Development and Growth, emphasized the company’s central role in the region’s economy.
“The Ontario government is supporting industry and protecting Northern Ontario,” Pirie said. “Algoma Steel plays a key role in the North’s economy and the manufacturing sector in Ontario. 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.”
The coordinated loans from Queen’s Park and Ottawa align in structure and terms, designed to stabilize the company without undermining its competitiveness. Government officials also framed the deal as a model for how provincial and federal authorities can cooperate to defend domestic industries against international trade disruptions.
Industry Backbone for Canada
Ontario is Canada’s steelmaking hub, home to three major producers and a supply chain that employs approximately 16,500 workers. The province remains a critical supplier to both Canadian manufacturers and the U.S. market, where steel and aluminum industries are highly integrated.
Federal Finance Minister François-Philippe Champagne underscored the broader significance of the investment in Algoma.
“It’s time to build big, build bold, and build the strongest economy in the G7 using Canadian steel,” Champagne said. “The support announced today will help Algoma, a pillar of Canada’s manufacturing base, 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.”
Protecting Jobs and Future Growth
The announcement was framed by both levels of government as a signal of long-term commitment to steelworker communities in Northern Ontario. Officials highlighted the importance of ensuring that major infrastructure projects across the province — including those funded through Ontario’s $200-billion infrastructure plan — continue to prioritize domestic steel.
Ontario and Ottawa’s intervention aims not only to buffer Algoma against the immediate tariff shock but also to strengthen the company’s transition to cleaner steelmaking technologies. By reducing its reliance on U.S. markets and investing in modernization, Algoma is expected to remain a cornerstone of Canada’s manufacturing base and a major source of employment for the North.
The governments’ joint statement noted that continued collaboration is essential “in the face of the economic threat and impacts of U.S. tariffs to ensure the prosperity and growth of our local industries.”
For the people of Sault Ste. Marie and the broader Northern Ontario region, that message offers reassurance that their decades-old steel giant will have the financial support needed to withstand global trade headwinds while continuing to supply Canadian and international markets.
