Question Period Note: ALGOMA STEEL LAYOFF NOTICES

• The Government of Canada is committed to maintaining a strong Canadian steel and aluminum industry.

• In the face of U.S. tariffs, the government has taken decisive action to safeguard workers and businesses, including putting in place import protection measures, worker support programs, and funding measures to support the production of steel and aluminium.

• U.S. tariffs are hurting millions of people on both sides of the border by raising costs, raising prices, and lowering demand.

• The government continues to consult industry on further measures to counter unfair trade practices and restore access to the U.S. market.

• While we are aware that yesterday’s announcement was, in part, related to a large-scale operational transition that Algoma is currently undergoing to electric arc furnace steel production, the impact is made far greater by the challenging times we find ourselves in.

• We will continue to work closely with Algoma and their workers to find the best path forward in this difficult time.

• On December 1, 2025, Algoma publicly announced that it was issuing approximately 1,000 layoff notices, effective in 16 weeks on March 23, 2026.

• Algoma Steel is a Canadian steel producer based in Sault Ste. Marie, Ontario. The company has been in operation for over a century and is one of the largest producers of flat-rolled steel products in Canada, with a current production capacity of 4 million tonnes (mt) (25 percent of Canada’s entire capacity). It primarily manufactures commodity-grade steel products for use in various industries, including automotive, construction, energy, and manufacturing. Algoma is publicly traded and has a significant presence in the Canadian manufacturing and industrial supply chains that use primary steel.

• In third quarter, Algoma reported a net loss of $485.1 million, incurring $89.7 million in direct tariff-related expenses, bringing its cumulative tariff expense to $164.3 million. Tariffs have rendered Algoma’s products uncompetitive in the US market, with shipments to the US representing 50 percent of total output. While the company has increased domestic plate sales, capturing close to a 50 percent share of the market, imports (and tariffs) continue to exert downward pressure on domestic prices. Algoma estimates that Canadian steel prices were 40 percent lower than US prices (in Q3). Due to the company’s sustained cash flow deficits, the S&P Global Ratings firm downgraded its credit rating from B to CCC+ earlier in the year.

• On September 29, 2025 the federal government in partnership with the Ontario government provided Algoma steel with $500 in combined liquidity support to help address its financial challenges. The Federal government furnished $400 million through the Large Enterprise Tariff Loan (LETL) facility, while the province provided $100 million via the Protect Ontario Financing Program. In addition, Export Development Canada (EDC) increased the company’s asset-based revolving credit facility (ABL Facility) from US$300 million to US$375 million. The enhanced facility is expected to strengthen Algoma’s financial position and provide added flexibility to navigate the current tariff environment.

• Algoma is making considerable efforts to re-position its production to serve the domestic market. On August 12th, the company signed a Memorandum of Understanding (MOU) with Seaspan’s Vancouver Shipyards (VSY) and Stigterstaal Canada to explore the feasibility of producing steel to support shipbuilding under the National Shipbuilding Strategy (NSS). Additionally, the company plans to expedite its electric arc furnace (EAF) transformation project to bring the second EAF online one year ahead of schedule. By doing so, the company would quickly achieve the low-cost position associated with EAF operations to better navigate market volatility as well as re-focus its production for domestic customers.

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