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Ontario Economy

Cone of silence descends on Essar Steel Algoma sale process – by David Helwig (SooToday.com – May 16, 2016)

https://www.sootoday.com/

It’s getting harder and harder to report on the latest news from the Essar Steel Algoma restructuring. A court-ordered sales and investment solicitation process (SISP) is underway to identify a new purchaser or investor.

Everyone involved has been made to sign non-disclosure agreements. The latest papers filed with Ontario’s Superior Court of Justice are covered with blacked-out sections intended to keep the sales process under strict secrecy.

Confidentiality is considered especially important in this case because Essar Global Fund Ltd., the Cayman Islands-based parent company of Essar Steel Algoma, is known to be a possible bidder for the Sault steel operations.

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Ontario climate plan signals stormy future – Postmedia Network Editorial (Brantford Expositor – May 10, 2016)

http://www.brantfordexpositor.ca/

Premier Kathleen Wynne is preparing to impose another suite of climate-related energy policies on the province. The Climate Change Action Plan promises to be even more expensive and more economically intrusive than the Green Energy Act. Which should give voters cause for alarm.

The public details of the plan that have emerged so far outline a policy thrust that sounds more like a war on personal mobility and the automotive industry than an environmental blueprint. It has already proved so concerning to the auto industry that the government has been forced to reassure the sector it means it no harm.

For instance, draft plans of the policy say Ontario intends to require that 80% of the province either walk, take transit or bike to work by 2050. How are they going to do that without imposing draconian new rules on where companies choose to invest and where people live? It’s hard to imagine that rule applying in Ontario counties where bus service is limited.

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The Ontario North is dotted with towns struggling to survive – by John R Hunt (North Bay Nugget – April 20, 2016)

http://www.nugget.ca/

First Nations people living in remote Northern Ontario communities are having a bad time. People are living in poor housing. Overcrowding, lack of employment, outbreaks of skin disease and mental health problems all add to depressing headlines.

There has been a lengthy inquest at Thunder Bay into the deaths of seven young people from northern reserves who went to the city to for an education. Five were found dead in a river. It is still not clear if they died from natural causes or were victims of foul play. Add the mysterious deaths of or disappearances of scores of aboriginal women and it is a sobering picture.

First Nations are getting some help and lots of advice. One of the most popular ideas is they should leave their isolated homes and move south. Former prime minister Jean Chretien said that sometimes First Nations should move to where the jobs are.

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[Canada steel] Sheehan co-chairs all-party steel caucus – by Elaine Della-Mattia (Sault Star – April 18, 2016)

http://www.saultstar.com/

Sault MP Terry Sheehan says he’s hoping Canadian steel producers will see some progress made soon that will offer them some relief to the issues that face them.

Sheehan is co-chairing an all party Parliamentary steel caucus with Hamilton East-Stoney Creek MP Bob Bratina.

The committee had its inaugural meeting last week and included the Canadian Steel Producers Association and steelmakers including Essar Steel Algoma, U.S. Steel, ArcelorMittal Dofasco, Evraz and Tenaris Tubes.

Essar Steel Algoma and U.S. Steel, based in Hamilton, Ont., are both in creditor protection and undergoing restructuring plans.

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Ontario needs a bold new steel strategy – by Carter Vance (Rabble.ca – April 12, 2016)

http://rabble.ca/

The fallout from the recent chaos in the British steel industry should look familiar to many Ontarians. Major steel producers in the province, most prominently U.S. Steel Canada in Hamilton and Essar Steel Algoma in Sault Ste. Marie, have shed jobs and filed for bankruptcy protection in recent years and there is little sign of ongoing slow-drip of bad news being halted any time soon.

Much of this continued pain for workers, pensioners and community rests on the lack of action by governments. Just as Jeremy Corbyn’s Labour Party has proposed a bold plan to save the Port Talbot facility of Tata Steel, so too should Ontario’s leaders in all levels of government look to a develop a robust, strategic response to our own crisis in steel.

The development of a steel strategy must begin with a recognition of the critical place in direct and indirect employment that the steel industry has in communities across Ontario, most notably Sault Ste. Marie and the Hamilton region.

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Bidder has old-fashioned hopes for U.S. Steel Canada – by Greg Keenan (Globe and Mail – April 4, 2016)

http://www.theglobeandmail.com/

One of the bidders for the assets of U.S. Steel Canada Inc. is proposing to revive the steel industry model of 19th-century tycoon Andrew Carnegie and establish a fully integrated steel maker in Canada that would also own iron ore and coal mines.

Tom Clarke, a Virginia-based environmentalist and health care executive, said he is bidding for U.S. Steel Canada and the Wabush iron mine in Labrador. The bid is being made through his ERP Compliant Fuels LLC, which already owns coal mines in West Virginia.

The Globe and Mail reported last Friday that ERP Compliant is one of the bidders for Essar Steel Algoma Inc. in Sault Ste. Marie, Ont., but Mr. Clarke said he is less interested in Essar Algoma than he is in U.S. Steel Canada.

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Bidders eye U.S. Steel Canada-Essar Algoma deal, sources say – by Greg Keenan (Globe and Mail – April 1, 2016)

http://www.theglobeandmail.com/

A deal that would combine Essar Steel Algoma Inc. and U.S. Steel Canada Inc. into a single steel maker is emerging as a potential path out of creditor protection for the two companies.

At least three bidders for Essar Algoma are also kicking the tires at U.S. Steel Canada, sources familiar with the restructuring discussions said, believing that putting the two companies together would create a strong steel maker that would flourish in the Canadian and U.S. markets. The combination of the two companies would be capable of producing more than five million tons of steel annually, ranking it fifth-largest among North American based producers.

New York-based industrial restructuring funds KPS Capital Partners LP and Bedrock Industries, as well as ERP Compliant Fuels LLP, a company set up by a Virginia environmentalist and health-care investor, are proposing to unite the two steel makers, sources said.

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Federal budget 2016: northeastern Ontario leaders wait on infrastructure funding (CBC News Sudbury – March 22, 2016)

http://www.cbc.ca/news/canada/sudbury/

The latest Wynne government budget assumes Ontario will get an extra cash for transit and highway projects

Northern MPs are waiting to see how much funding will be available for infrastructure when the federal government tables its first budget today.

They’re also hoping to get money for the Ring of Fire, a mineral-rich development project on the James Bay Lowlands.

The Liberals have committed to doubling their investment in infrastructure, and Timmins-James Bay MP Charlie Angus tells CBC News it’s the right thing to do.

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Canada needs to play tough, old-time hockey to protect domestic industries [Steel sector] – by Christian Provenzano (Globe and Mail – February 27, 2016)

http://www.theglobeandmail.com/

Christian Provenzano is mayor of Sault Ste. Marie, Ont.

If international trade were a hockey game, it would be one that is rife with clutching, grabbing and underhanded tactics. As a player, Canada is trying its best to ignore this. We’re committed to playing by a code of politeness that our opponents choose to ignore. It’s time to muscle up, go into the corners again and have “fair trade” re-enter the lexicon alongside “free trade.”

The best way to begin doing this is by modernizing our trade-remedy system. Our current, antiquated system is putting our domestic industries at a competitive disadvantage, with the steel sector being particularly hard hit in recent times.

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U.S. Steel Canada Said to Draw Interest From ERP, Other Suitors – by Scott Deveau and Sonja Elmquist (Bloomberg News – February 19, 2016)

http://www.bloomberg.com/

U.S. Steel Canada Inc., the former unit of U.S. Steel Corp. under creditor protection since 2014, has drawn interest from ERP Compliant Fuels and Essar Steel Algoma Inc., people with knowledge of the matter said.

ERP Compliant has submitted a bid for the steel operations in Hamilton and Nanticoke, Ontario, and Essar Steel and several others are expected to submit offers by the Feb. 29 deadline, said the people, who asked not to be identified because the information is private. The assets are valued at about $1.5 billion, including debt, the people said.

“The sales and investment solicitation process continues under the supervision of the court and it would not be appropriate for U.S. Steel Canada to comment outside of the process,” said Joel Shaffer, a spokesman for the company.

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Another Ontario green energy blow-up – by Terence Corcoran (Financial Post – February 16, 2016)

http://www.financialpost.com/index.html

Debris from the exploding Ontario Liberal green energy rocket continues to land on the hapless citizens of the province. Gas plant scandals, soaring power rates, declining electricity output, massive subsidies to money-losing wind and solar, non-stop bafflegab from government ministers: when will it stop? Not now, and maybe never.

Details of the latest meteorite-sized chunk of the Dalton McGuinty/Kathleen Wynne green power blow-up are on display at the blog of energy consultant Tom Adams, who formerly served on the Ontario Independent Electricity Market Operator board of directors and the Ontario Centre for Excellence for Energy board of management

Adams picks up a story that made brief headlines in late 2012 when Windstream Energy, a U.S. company, filed a NAFTA complaint claiming $475 million in damages.

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Time to step up for steel – by Mike Verdone (Sault Star – February 3, 2016)

http://www.saultstar.com/

Sault Ste. Marie MPP David Orazietti urged the federal government Wednesday to adopt a new trade policy to ensure fair trade for Canadian steel workers.

He said the current federal trade remedy system is antiquated and must be changed. “It’s more than 20 years old, it’s outdated. This system does not reflect the global realities of trade today,” Orazietti said.

He called on Ottawa to immediately embrace the Trade Remedy Modernization plan as outlined by the Canadian Steel Producers Association (CSPA) during a press conference Wednesday afternoon at his constituency office while flanked by local industry stakeholders, including union and company representatives from Essar Steel Algoma and Tenaris Algoma Tubes Algoma, as well as reps from retiree groups.

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Stelco’s takeover by U.S. Steel no net benefit for Canada – by Jennifer Wells (Toronto Star – January 30, 2016)

http://www.thestar.com/

The 2007 takeover ended in insolvency and is now mired in the courts. It’s hard to imagine a sorrier corporate saga than U.S. Steel’s disastrous foray into Canada.

I refer, of course, to the 2007 takeover of Stelco, just one of a spree of foreign takeovers that substantially contributed to a diminishment of Ontario’s profile on the world economic stage. (Think Falconbridge, Inco, Rio Algom.)

At the height of the foreign takeover mania, the federal government of the day offered repeated assurances that the Investment Canada Act provided all the protections necessary to ensure such transactions would be of “net benefit” to Canada.

In remaking Stelco into U.S. Steel Canada Inc., the Pittsburgh parent committed to a number of binding undertakings, 31 in all.

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Essar restructuring on time and on budget – by Elaine Della-Mattia (Sault Star – January 29, 2016)

http://www.saultstar.com/

Kalyan Ghosh said Essar Steel Algoma’s restructuring plan is on a tight timeline and the public will see the process keep moving forward, especially over the next couple of weeks.

The CEO of the financially strapped steelmaker said the timelines set for the restructuring plan by the debtor in possession (DIP) financers and the courts has some strict deadlines and specific milestones that must be met along the way.

Essar Steel Algoma received US $200 million from a syndicate of lenders led by Deutsche Bank to continue its operations throughout the restructuring process.

Ghosh said he expects that loan to be enough money to finance the company until the end of the restructuring program, provided that there is no other major economic impact the steelmaker has to contend with.

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