The funding is intended to help the Sault Ste. Marie, Ont.-based company accelerate its transition to electric arc furnace steelmaking and pivot to a business model less reliant on the U.S.
The Government of Canada, in partnership with the Government of Ontario, has announced a significant financial support package totaling $500 million for Algoma Steel Inc., a move designed to shield Canadian steel jobs and fortify domestic industrial capacity against the backdrop of shifting global trade relations and persistent U.S. tariffs.
The support, announced on September 29 in Sault Ste. Marie, Ontario, centers on a binding term sheet with Algoma Steel Inc. The federal government will provide $400 million in financial assistance through the Large Enterprise Tariff Loan (LETL) facility. In a show of provincial-federal cooperation, the Government of Ontario is adding an additional $100 million under the same terms of the federal financing.
This substantial funding is explicitly aimed at helping the Sault Ste. Marie-based steel industry leader continue its operations, transition to a business model less reliant on the United States market, and mitigate disruption to its approximately 2,500 full-time employees. The announcement comes as the U.S. continues to fundamentally transform its trading relationships, creating a "profound" impact on key Canadian sectors like steel.
Federal leaders stressed the vital role of the steel industry, which supports tens of thousands of jobs and drives growth across manufacturing, construction, and energy sectors. "It’s time to build big, build bold, and build the strongest economy in the G7 using Canadian steel," said François-Philippe Champagne, Minister of Finance and National Revenue. He framed the investment as helping Algoma "manage the financial impact of U.S. tariffs... adapt operations, stay competitive, and most importantly protect the jobs and the workers who drive this industry.”
The Large Enterprise Tariff Loan (LETL) facility, from which the federal funding is drawn, was initially created in March 2025 as a $10 billion financing facility to support Canadian companies affected by actual or potential tariffs. The facility’s eligibility requirements were recently updated to expand access and provide lower-cost financing, including a reduction in the minimum annual revenue and loan size requirements, an extension of the loan maturity from five to seven years, and a reduced initial interest rate. Crucially, companies are now required to prioritize worker retention.
The government emphasized that this support is a pivotal step for Canada to shift "from reliance to resilience," encouraging the use of domestic steel in major national initiatives like historic defence investments, growing industries, energy exports, and building infrastructure—from homes and bridges to transit and the clean economy of tomorrow.
