Canada – Government investing in Hamilton’s steel industry to support good jobs and significantly reduce emissions

Jul 30, 2021 | International

Hamilton, Ontario

As we work to finish the fight against COVID-19, the Government of Canada is taking action to ensure that Canadian companies have the tools and resources they need to build strong communities and a cleaner future for Canadians. By investing in clean technology, we will create good middle-class jobs, strengthen our economy, cut pollution and build back better for all Canadians.

Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, together with the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, and the Honourable Filomena Tassi, Minister of Labour, announced a federal investment of $400 million in ArcelorMittal Dofasco G.P., Canada’s largest producer of flat-rolled steel. This investment will support a $1.765-billion project to convert the steel production process and phase out coal-fired steelmaking at its facilities in Hamilton, Ontario. This project will make a significant contribution toward Canada’s achieving its climate goals, reducing greenhouse gas (GHG) emissions by up to 3 million tonnes per year by 2030. Together with the Algoma Steel project announced on July 5, 2021, the two projects will reduce GHG emissions by up to 6 million tonnes per year. This is equivalent to taking more than 1,800,000 passenger vehicles off the road, almost the number of passenger vehicles in Toronto, Montréal and Vancouver combined.

This investment will support ArcelorMittal Dofasco in becoming the world’s first producer to transition to a hydrogen-ready, direct reduced iron–fed electric arc furnace at this scale for the development of advanced steels that serve the automotive, medical and consumer packaging industries. Lower-emissions advanced steel is in demand for products like electric vehicles, helping Canada to be a leader in manufacturing the clean end-to-end goods the global market increasingly demands. The transition will result in higher productivity, product quality and energy efficiency at ArcelorMittal Dofasco. This project is expected to support as many as 2,500 well-paying construction jobs through subcontracting, while maintaining Dofasco’s strong employment position in Hamilton, and provide upskilling opportunities for workers. Together, this means securing ArcelorMittal Dofasco’s operations in Hamilton for decades to come.

Our country’s steel producers provide thousands of good middle-class jobs to Canadians, and government supports are drawing in the investments we need to ensure they remain a vital part of our economy as we transition to a cleaner future. The government will continue to support innovative projects that not only help tackle climate change and achieve its environmental goals but also create new opportunities for workers and businesses alike.

“We are supporting our steel workers and companies like ArcelorMittal Dofasco as they seize today’s opportunities in the low-carbon economy and they do their part in the fight against climate change. This investment will ensure that Canada’s largest producer of flat-rolled steel adopts innovative technologies, continues to provide economic opportunities for Canadian workers and contributes meaningfully toward our climate targets. This investment will create good jobs in communities like Hamilton and lead to clean Canadian-made products for the world for decades to come.”

– The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry 

“Our government has been steadfast in defending and championing our steel workers. Today’s announcement, through the Net Zero Accelerator, is about investing in the low-carbon transformation of Canadian industry, taking serious action in the global fight against climate change and supporting good middle-class jobs in Hamilton. We will continue to be there to support growth and a strong economic future for our steel workers and all the people of Hamilton.”

– The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance

“This $400-million investment by our government in reducing greenhouse gas emissions at ArcelorMittal Dofasco will transform Hamilton. It will position AMD to become a world leader in the development of advanced steels and make a significant contribution to achieving Canada’s carbon pollution reduction targets. We are proud to work with organizations like AMD that are committed to building a stronger, more competitive economy by innovating to fight climate change and creating 2,500 new jobs.”

– The Honourable Filomena Tassi, Minister of Labour

“The plans we have announced today represent a historic moment for ArcelorMittal in Canada and North America, marking the beginning of a new era of steelmaking in Hamilton that will result in a 60% drop in CO2 emissions within the next seven years. We are very pleased to be in partnership with the Government of Canada. As partners, we all recognize that it is vital to accelerate our reduction of carbon emissions and strengthen our climate action. Indeed, progress in the next decade is vital if the world is to reach net zero by 2050.”

–  Aditya Mittal, CEO, ArcelorMittal

“We thank the Government of Canada for committing to this significant investment in Hamilton that will transform our organization and deliver exceptional benefits to all our stakeholders, including our customers, our employees and the community. The new steelmaking footprint will improve our capability to support the most demanding product segments with advanced high-strength steels, including those used for the emerging electric vehicles in the automotive sector. The new steelmaking stream also sustains well-paying skilled positions in advanced manufacturing in Ontario, with the opportunity for our highly skilled employees to work in the most technically advanced steelmaking assets in North America. The company’s bayfront property has been re-imagined, and we are well on the way to a significant and broad reduction in environmental impacts, contributing to the health and sustainability of our community, the environment and the economy.”

– Ron Bedard, President and CEO, ArcelorMittal Dofasco

“With the strong support of the Government of Canada, ArcelorMittal Dofasco is well on its way to achieving the climate change target of being carbon neutral in 2050. This is great news for Hamilton’s Climate Change Action Plan and our local efforts to transition to a prosperous, healthy and fair zero-carbon community. Thank you to our federal partners for your continued support, collaboration and commitment to the people of Hamilton.”

– Fred Eisenberger, Mayor of Hamilton

Headquartered in Hamilton, Ontario, ArcelorMittal Dofasco is Canada’s largest producer of flat-rolled steel and Hamilton’s largest private sector employer.

In 2019, the Canadian steel industry employed over 25,000 workers and contributed $3.4 billion to Canada’s gross domestic product (GDP).

The steel industry currently accounts for 7% of global GHG emissions from the energy industries—equal to global aviation, shipping and chemicals emissions combined.

The ArcelorMittal Dofasco project and the recently announced project by steelmaker Algoma in Sault Ste. Marie alone stand to reduce Canada’s GHG emissions by around 1% nationally, representing over a third of Canadian heavy industry’s GHG reduction goal to meet 2030 targets.

The company has committed to investing $15 million annually on research and development and to helping develop the workforce of tomorrow through approximately 150 co-op student positions annually for a total of 4,350 co-op positions in Canada.

The GHG estimates for this project have been developed and validated in accordance with internationally recognized best practices for estimating impacts of GHG emissions.

The Government of Canada funding announced today comes from the Strategic Innovation Fund, under its Net Zero Accelerator initiative.

The Government of Canada launched the Net Zero Accelerator in December 2020, as part of its strengthened climate plan, A Healthy Environment and a Healthy Economy, and announced additional funding for the initiative in Budget 2021. Through the Net Zero Accelerator, the government is investing $8 billion over seven years to accelerate decarbonization projects with large GHG emitters, the transition to clean technologies and Canada’s industrial transformation across all sectors.

The Strategic Innovation Fund attracts and supports high-quality business investments across all sectors of the economy by encouraging R&D that will accelerate the transfer of technology and the commercialization of innovative products, processes and services and will facilitate the growth of innovative firms.

In November 2020, the government introduced Bill C-12, the Canadian Net-Zero Emissions Accountability Act, to establish a legally binding process to achieve net-zero emissions by 2050, set rolling five-year emission-reduction targets, and require plans to reach each target and report on progress. The Act received royal assent in June 2021.