The Ontario government is planning a major intervention in Essar Steel Algoma's recovery from insolvency, SooToday.com has learned.
News of the funding was disclosed Nov. 7 at a meeting of the Sault Ste. Marie Economic Development Corp. by James Caicco, a local director of Northern Ontario Heritage Fund Corp. (NOHFC), the provincial government's crown corporation and development agency.
"We're working on a major, major funding from NOHFC to help in the restructuring," Caicco said.
Caicco went out of his way to emphasize that the funding request didn't come from local government officials.
"That wasn't initiated from the city or the EDC," he said. "It was initiated by the bureaucrats in Toronto."
Caicco used the expected Essar Steel Algoma funding initiative to emphasize the need for local officials to apply for available NOHFC cash.
“You're the leaders of the community," he told the EDC directors. "You need to think of us, because we can help in certain circumstances like that. And we want to be there."
The Sault Ste. Marie steel sheet and plate maker has been operating under creditor protection since last fall with a court process underway to determine a new buyer.
The transfer of ownership might involve the renegotiation of the collective agreement and pension plans, something the United Steelworkers aren’t prepared to do.
