Federal government announces $50M to support modernization, innovation at Stelco
The investment will help add 75 jobs at the Hamilton steelmaker
Stelco will receive almost $50 million from the federal government to support efforts to modernize its facilities and make them more sustainable.
The steelmaker is undertaking $451 million in projects over the next two years. The projects are aimed at innovation that will add 75 jobs, according to CEO David Cheney.
"It's about upgrading and modernizing our steelmaking operation," he explained. "We're investing in technology to make some next-generation steels, including some steels that aren't currently made in North America."
Cheney praised the company's workers for taking on various challenges, including U.S. tariffs, and said Stelco is focused on long-term returns.
Hamilton MPs Filomena Tassi, Minister of Seniors, and Bob Bratina, who co-chairs an all-party steel caucus, were on hand to announce the $49.9-million investment Wednesday.
Tassi says the steel company will be installing a new recycling facility and completing other upgrades to its operations that will be "good for both our economy and for our environment."
She described the investment as a "firm demonstration" of the government's commitment to stand shoulder to shoulder with steel workers.
"Stelco is a success story," Tassi said. "This company, not that long ago, was in CCAA protection. Look at where they are now — growing, making profits, expanding."
Bratina echoed her comments, adding the industry is very different from the business that hired "people walking in off the street" like he did 50 years ago.
"This is not your grandfather's steel mill. It's 21st century steelmaking and it's innovative."
The money comes from the government's Strategic Innovation Fund, meant to "spur innovation for a better Canada" by supporting large projects, according to its website.
Government officials announced a similar, $50-million investment in ArcelorMittal Canada Inc. back in October. That money went toward a $205-million investment in a series of projects the steelmaker was undertaking to update equipment, increase employee skills and cut down on emissions.
CEO says it's 'hard not to be excited'
Wednesday's announcement comes the day after Stelco's second-quarter financial results were released.
The company reported a net income of $1 million last quarter, compared to a loss of $11 million during the same period last year.
However, those results also showed a 96 per cent decrease in Stelco's adjusted net income over the quarter — from $165 million, or $1.86 per share, to $6 million, or seven cents per share.
The numbers were also below analyst expectations of $21.5 million, or 21 cents per share, according to financial markets data firm Refinitiv.
Stelco pointed to several "headwinds" during the quarter, including destocking, falling market prices and the U.S. tariffs, which have since been lifted.
Cheney said steel is a "volatile business," but added Stelco's business model is about "tactical flexibility" and responding to the way the market moves.
"As we think about transforming this business to creating jobs, sustaining jobs, investing in the communities. It's hard not to be excited," he said. "We're investing and growing."
with files from the Canadian Press