Govt to support Algoma Steel to help deal with US tariffs
Canada - 2019 January 13

The federal government is to announce up to USD 90 mln in support for Ontario's Algoma Steel in a commitment aimed at helping the producer deal with the American tariffs on steel and aluminum.

The government support comes as Canadian steel and aluminum producers continue to face punishing levies imposed last June by U.S. President Donald Trump.

Canada has rejected the premise of the American duties, that its metals exports pose a national-security threat to the U.S., and has been fighting for the removal of the tariffs. Ottawa has implemented tariffs of its own on a long list of U.S. imports in hope of forcing Washington to back down.

The U.S. tariffs, however, remain in place.

The federal Liberals were criticized last fall for signing a new North American trade pact, which includes the U.S., without securing any guarantees from Washington that it would lift the levies.

In making the Algoma funding announcement, the federal government is expected to say the commitment will maintain and create 3,050 Algoma jobs in Sault Ste. Marie, although it's unclear how many new positions will be added.

The investment will include up to USD 60 mln from the Federal Economic Development Agency for Southern Ontario and USD 30 mln from a federal program known as the strategic innovation fund.

The government funding is to help support Algoma in its effort to bring in new technologies, improve productivity and stay competitive on international markets.

Last week, Prime Minister Justin Trudeau discussed the tariffs in a phone call with Trump, according to a readout of their conversation.

Last June, Ottawa released a financial aid package for industries caught in the crossfire of the tariff dispute.

Ottawa's tariff relief package included up to USD 2 bln in fresh funding and support for the steel, aluminum and manufacturing sectors and their workers. For companies, Ottawa promised up to USD 1.7 bln worth of financing and services for steel and aluminum industries through the Business Development Bank of Canada and Export Development Canada.

As part of the tariff relief, Bains announced a commitment last October of up to USD 49.9 mln through the strategic innovation fund for steel producer ArcelorMittal Canada. Bains said the investment would support up to 4,700 jobs in Hamilton, Ontario, and 1,700 more in Contrecoeur, Quebec.

Source: BNN Bloomberg


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