‘On behalf of Algoma, I would like to thank Prime Minister Carney, Premier Ford and their governments for their steadfast support of our Company and the Canadian steel industry,’ said Michael Garcia, CEO of Algoma Steel

Algoma Steel is receiving help from the provincial and federal governments in the form of two loans.

The federal government is kicking in $400 million and the province is contributing $100 million. 

“On behalf of Algoma, I would like to thank Prime Minister Carney, Premier Ford and their governments for their steadfast support of our company and the Canadian steel industry,” said Michael Garcia, CEO of Algoma Steel.

“The ongoing imposition of a 50 per cent tariff on Canadian steel has closed the U.S. market to Canadian steelmakers. 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. We look forward to supplying Canadian steel – from right here in Sault Ste. Marie – to, as the Prime Minister has said, help protect our sovereignty, grow our industries, export our energy, and build one strong Canadian economy.”

SooToday will have more from this morning’s announcement soon.

The full release is below: 

Algoma Steel Group Inc. (“Algoma” or the “Company”) (NASDAQ: ASTL; TSX: ASTL) today announced the execution of binding term sheets to secure C$500 million in liquidity support, comprising C$400 million loan facilities from the Government of Canada under the Large Enterprise Tariff Loan facility and C$100 million loan facilities from the Province of Ontario (collectively, the “Facilities”).

The Facilities provide essential financial flexibility amid prolonged trade uncertainty and position Algoma to advance its ongoing business transformation.

Today, the Honourable Patty Hajdu, Minister of Jobs and Families and Minister responsible for the Federal Economic Development Agency for Northern Ontario, on behalf of the Honourable François-Philippe Champagne, Minister of Finance and National Revenue, alongside Will Bouma, Parliamentary Assistant to the Minister of Northern Economic Development and Growth for Ontario, and Bill Rosenberg, Member of Provincial Parliament for Algoma—Manitoulin, will join Algoma CEO, Michael Garcia, and CFO, Rajat Marwah, along with senior management team members and workers at the plant for the announcement.

“On behalf of Algoma, I would like to thank Prime Minister Carney, Premier Ford and their governments for their steadfast support of our Company and the Canadian steel industry,” said Mr. Garcia. “The ongoing imposition of a 50-per-cent tariff on Canadian steel has closed the U.S. market to Canadian steelmakers. 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. We look forward to supplying Canadian steel – from right here in Sault Ste. Marie – to, as the Prime Minister has said, help protect our sovereignty, grow our industries, export our energy, and build one strong Canadian economy.”

More quotes

“Steel is the backbone of a strong Canada. In the face of tariffs and uncertainty around the world, we are ensuring workers and businesses can prosper today, and lead in tomorrow’s economy. We are building the foundations for a stronger country.”

– The Honourable Patty Hajdu, Minister of Jobs and Families and Minister responsible for the 

Federal Economic Development Agency for Northern Ontario

“Investing in Canada’s steel industry is investing in the strength of our regional economies and the future of our national prosperity. By supporting Algoma Steel, we’re securing the long-term viability of a cornerstone operation in Sault Ste. Marie and reinforcing thousands of good-paying jobs that form the backbone of the community. This is about building resilience, creating opportunity, and ensuring Canadian steel continues to power our economy for generations to come.”

– The Honourable Melanie Joly, Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions

“Algoma Steel is a significant part of the economy in Northern Ontario and a major player in the manufacturing sector. The Ontario government is supporting Algoma Steel and its workers so it can remain resilient and competitive in the face of U.S. tariffs and a changing global market. We want to see the company continue as an economic pillar in the North that drives growth, jobs and 

opportunity well into the future.”

– The Honourable George Pirie, Minister of Northern Economic Development and Growth for Ontario

“Building Canada strong means using Canadian steel to build homes, bridges, transit infrastructure, and the clean economy of tomorrow. Our government is actively strengthening our domestic production capacity in the steel sector through the supports announced today in 

order to meet this generational moment.”

– Terry Sheehan, Member of Parliament for Sault Ste. Marie—Algoma, Ontario

Loan Facilities

The Facilities will be provided proportionately by the federal and provincial governments as follows:


C$100 million – Third lien secured tranche, ranking junior to Algoma’s existing first lien revolving facility and second lien secured notes; and

 
C$400 million – Unsecured tranche, subject to the issuance of 6.77 million common share purchase warrants, with each warrant being exercisable for one common share of Algoma at an exercise price of C$11.08 for a 10-year term, vesting proportionately as unsecured draws are made.

The Facilities will have a seven-year term, with interest at CORRA + 200 bps for three years, stepping up by 200 bps each year thereafter.

The exercise price of the warrants is equivalent to the volume-weighted average trading price of Algoma’s common shares on the TSX from the completion of its going-public transaction in October 2021 through November 1, 2024, which was prior to the U.S. Administration’s announcement of its intention to impose new tariffs on Canadian steel. The warrants align the governmental support for Algoma with the Company’s long-term value creation strategy and its ongoing transformation and long-term growth trajectory.

The Facilities will include customary positive and negative covenants, including a restriction on capital distributions. Algoma’s access to the Facilities is subject to several conditions, including the completion of definitive loan documentation and the receipt of all necessary approvals under the Company’s first lien revolving facility.

Operational Adjustments in Response to Market Conditions

Alongside securing this financing, Algoma is adjusting production to better align with prevailing demand and market dynamics. The continuation of Section 232 tariffs has effectively closed the U.S. market to Canadian steel, undermining Algoma’s cross-border business model and requiring the Company to focus on products with reliable domestic demand.

The tariffs have made continued operation of the Company’s blast furnace and coke ovens unsustainable. Accordingly, Algoma will begin to exit these primary operations as it accelerates its transition to Electric Arc Furnace (“EAF”) steelmaking. The Company now expects that the final aggregate cost of completion of the EAF project will be approximately C$987 million. Going forward, Algoma intends to focus production on as-rolled and heat-treated plate, along with select coil products predominantly for the Canadian market. These adjustments are expected to enable Algoma to:


supply Canadian industries with high-quality as-rolled and heat-treated plate;
provide stability for continued investment in diversification projects aligned with Canada’s evolving needs; and
reinforce Algoma’s role in supporting Canada’s infrastructure, manufacturing, defense, and nation-building priorities.

“The government’s financial support underscores their recognition of Algoma’s critical role in Canada’s industrial base, and demonstrates their willingness to provide direct support for our Company through this transition,” said Mr. Garcia.

“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 Mr. Marwah.