Canada Boosts Algoma Steel with $500M Loan to Fight U.S. Tariffs
The Canadian government has provided a $500-million loan to Algoma Steel, with $100 million from Ontario and $400 million from the federal government. The loan, part of the Large Enterprise Tariff Loan program, aims to boost domestic steel production and protect the industry from U.S. tariffs.
Algoma Steel, based in Sault Ste. Marie, will use the funds to increase steel plate and structural steel production, and convert to electric arc furnaces. This will help the company diversify its products and markets, as stated by its CEO Michael Garcia. The loan also provides flexibility for these strategic changes.
The loan includes 6.77 million stock warrants, giving the government the right to buy shares at $11.08 each. The government has 10 years to decide whether to exercise these warrants. The loan matures in seven years and carries a low interest rate.
Terry Sheehan, the local MP, supports the loan, hoping it will double the percentage of Canadian steel used in Canada. He aims to prevent U.S. tariffs from harming Algoma Steel and its 2,500 full-time employees.
The $500-million loan to Algoma Steel is expected to strengthen the company's position in the market, support its employees, and increase Canadian steel production. The government's investment, along with the loan's favorable terms, aims to protect and grow the domestic steel industry.
