Canada to Lend Algoma Steel C$500 Million to Deal With U.S. Tariff Squeeze — Update

By Paul Vieira

OTTAWA--The governments of Canada and Ontario are providing Algoma Steel Group with a half-billion Canadian dollars of financing that the company says it needs to survive the Trump administration's 50% tariffs on the metal.

The Canadian government is lending the steel producer 400 million Canadian dollars, or the equivalent of $287.5 million, while the province of Ontario is chipping in with C$100 million. The loan marks the first piece of relevant financial support Prime Minister Mark Carney has delivered for an individual steel company, which is struggling under hefty U.S. duties on their products.

Entering 2025, Canada was America's largest foreign supplier of the metal, used in the construction of cars, appliances and infrastructure such as bridges. Algoma Chief Executive Michael Garcia said President Trump's tariffs have effectively shut out Canadian steel from the world's largest economy.

"We require this liquidity support to withstand this unprecedented U.S. governmental action, and importantly, to continue our transformation for the future," Garcia said.

Canada's Finance Minister Francois-Philippe Champagne said the financing would help Sault Ste. Marie, Ontario-based Algoma to continue operations, limit layoffs and help the company transition to a business model less reliant on U.S. demand.

According to the company, the financing, in the form of credit facilities, carries an interest rate equal to Canada's benchmark overnight-funding rate, plus 2 percentage points. Presently, that represents interest of 4.56%. Canada would be eligible to acquire shares in Algoma should the company draw on these facilities, the Sault Ste. Marie, Ontario-based company said.

Earlier this month, Canada's Liberal government unveiled a series of measures aimed at helping the sectors most affected by Trump's tariffs. Besides steel, Canada faces hefty U.S. tariffs on its aluminum, automobiles and softwood lumber, used in the construction of homes. Prime Minister Carney is now trying to introduce policy aimed at rewiring the Canadian economy to reduce its reliance on U.S. trade, which accounts for roughly one-fifth of Canadian gross domestic product.

Write to Paul Vieira at paul.vieira@wsj.com

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September 29, 2025 09:47 ET (13:47 GMT)