Algoma Steel is calling on the federal government to provide it with around half a billion dollars to help the company stay alive.
The request comes in response to mounting pressure from U.S. President Donald Trump, who introduced a 25 per cent tariff on steel and aluminum in March and then increased it to 50 per cent in June.
According to The Globe and Mail, Algoma Steel “hopes to secure between $400 million and $600 million in loans to help keep it afloat over the medium term.”
A representative from the national steel producers association told SooToday any Canadian company that sells more than 50 per cent of its steel to the United States will be in deep trouble due to the American tariffs.
Algoma Steel was selling between 50 and 60 per cent of its steel to the U.S. before the tariffs were introduced.
Last week, Algoma Steel CEO Michael Garcia sat down for an interview on the Village Media podcast Closer Look where he described how dire the situation is.
“I hope the situation exists where the tariff into the U.S. is low enough and all of this great pivot of building Canada strong and putting in real preferences for Canadian steel and building the economy with Canadian steel — if that all starts to happen then the future is going to be incredibly bright for Algoma Steel.
“But right now with this 50 per cent tariff, the future is very uncertain,” he said.
Garcia told The Globe and Mail the government's initial offer came with extremely onerous terms, and was presented on a "take it or leave it" basis.
“It was, frankly, pretty unappealing,” Garcia said.
“A very high interest rate, high fees, it had mechanisms for granting the government warrants, which would be calculated based on a stock price that has been greatly hit by the tariffs.
“And so it would be pretty dilutive to the shareholders of Algoma.”
Garcia is pushing the government for a loan on much better terms, the story said.
SooToday has reached out to Algoma Steel for more information.
