Ontario Protecting Steel Industry Jobs in Sault Ste. Marie
Ontario announced a $60 million investment to support the acquisition and restructuring of Algoma Steel Inc., protecting thousands of jobs in Sault Ste. Marie.
Provincial Capital Investment
The Province of Ontario is supporting a $600 million capital investment at Algoma Steel Inc. with a $60 million repayable loan. The province is also supporting the purchase agreement through environmental agreements, pension regulatory relief and eligibility for Pension Benefits Guarantee Fund (PBGF) coverage.
Algoma Steel is the second-largest steel producer in Canada and the second largest private sector employer in Northern Ontario, with approximately 3,000 direct employees.
Each year, Algoma Steel spends more than $1.2 billion on supplies, services and raw materials, including $120 million locally.
The province has negotiated an agreement that requires the new owners to prepare and implement a plan to identify and address past environmental contamination at the Sault Ste. Marie mill site. The new owners must also contribute $3.8 million annually over 21 years to continue this work.Pension Relief
Algoma Steel sponsors three defined benefit pension plans that provide retirement benefits to approximately 2,100 current and 6,300 former or retired employees.
As part of the Government of Ontario's commitment to support the restructuring of Algoma Steel's business, Algoma Steel's two largest defined benefit pension plans would be able to join the PBGF if certain conditions have been met. The province has also provided regulatory relief from certain pension obligations under the Pension Benefits Act.
Supported by assessments paid by employers, the PBGF guarantees the first $1,500 per month of pension income from a defined benefit pension plan if the employer has insufficient assets and is bankrupt.
Legislative amendments to provide regulatory relief in respect of Algoma Steel's third defined benefit pension plan, the Wrap Plan, were introduced in Bill 57, the Restoring Trust, Transparency and Accountability Act, 2018. Regulatory amendments will be brought forward to implement terms of the restructuring relating to the Wrap Plan.