Essar Steel Algoma Inc with steel facilities in Sault Ste. Marie Ontario employs 2,700 workers who annually produce 2.8 million tonnes of hot and cold rolled steel sheet and plate products. On October 19, Algoma Inc announced the completion of a merger with the international investment cartel Legato. This combines the U.S.-owned Essar Steel Algoma with the New York-based ownership of Legato Merger Corp.

The India-based Essar global cartel, which had bought Algoma Steel in 2007, reportedly hived off the Algoma steelmaking facilities to U.S. investors in 2017 although not much is known of the transaction as it was classified as a closed private affair. The current merger of the steel facilities with Legato reportedly gives the Essar Steel Algoma U.S. owners over $1.1 billion worth of new shares in Legato and a net gain of $306-million. The former secret private ownership shares of Algoma will now become openly traded shares on the NASDAQ and Toronto stock exchanges.

While steelmaking is essential for modern economies and is central to manufacturing, air, rail and road transportation, home and commercial construction, infrastructure and defence, the three major steel producers in Canada are owned and controlled outside the country. Stelco in Hamilton and Algoma are owned by U.S.-based global investors and ArcelorMittal Dofasco in Hamilton is held mainly by Indian and European ownership.

No modern economy can be considered self-reliant and in control of its economic affairs without independent national control of its steel industry. This absence is particularly galling for Canada, which has all the raw material, energy, scientific expertise and skilled workers necessary for a thriving steel sector capable of contributing to an overall self-reliant stable economy under the control of Canadians and serving their needs.

The lack of Canadian control is particularly disturbing given that Canada's steel sector appears very unstable suffering regular crises within almost continuous boom and bust cycles. Algoma Steel itself has been in bankruptcy protection under the Companies Creditors' Arrangement Act (CCAA) in 1991, 2001 and again in 2015 along with numerous private ownership changes. Bankruptcy disruption causes severe strain on the workforce, including retirees, local contractors and suppliers, and industry consumers that need a consistent stable supply of steel means of production.

Canada's ruling elite and governments do not address this problem from the point of view of building a stable self-reliant steel sector under the control of Canadians to serve the needs of Canada's economy first and foremost and engaging in international trade for mutual benefit. Instead they allow the foreign ownership cartels to use Canada's steel facilities for their private interests including jumping into bankruptcy protection, closing facilities and selling off bits and pieces or the whole when it suits them. On top of this, Canadian governments give these foreign private owners millions of dollars in public funds and favourable deals on infrastructure such as a low price for electricity.

Canadians, particularly those employed in the steel sector find the situation disturbing and in need of a new direction. The global wheeling and dealing with Canada's steel mills and all this public money pouring into the pockets of foreign oligarchs does not bring stability to the steel sector nor solve the problem of Canadians having control over their steel industry as an important base of a stable secure self-reliant economy.

Note

Legato Merger Corp. is a blank check company organized for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with one or more businesses or entities. Legato's common stock, units and warrants trade on the Nasdaq Capital Market under the symbols "LEGO," "LEGOU" and "LEGOW," respectively.

On July 5, Prime Minister Justin Trudeau's then Minister of Innovation, Science and Industry François-Philippe Champagne, and others were in Sault Ste. Marie to announce that $420 million in public money is being poured into Algoma Steel by the federal government. This was one of a string of photo-ops in many cities across the country where public monies were doled out by Trudeau and members of his Cabinet. These handouts to global private monopolies in the aerospace and steel industries were announced just weeks before Trudeau called the federal election.

The October 19 announcement of the merger of Algoma Steel with the international investment cartel Legato makes this $420 million given by the Trudeau government to the U.S. ownership group that owns and controls Essar Algoma Steel a really shady deal. It came right in the midst of the secret maneuvering to merge or sell the steel mill to Legato. The deal included over $200 million from the federal government's Strategic Innovation Fund and an additional $220 million from the Canada Infrastructure Bank. The total pay-the-rich scheme of $420 million is more than the net gain of $306-million the U.S. ownership group says it has pulled off with the Legato merger.

These acts of political arrogance by the party-in-power were not merely designed to garner votes. They were also designed to impress upon workers that their fate and the fate of their industries depend on supporting the cartel party system, in particular the Liberal party, and not on their own fight for their rights and for the building of industries that serve the well-being of the people.

While in Sault Ste. Marie, Trudeau did not mention that the Algoma workers have been through fraudulent bankruptcies three times under the Companies' Creditors Arrangement Act (CCAA). Nor did he mention that the Canadian state, which he represents, is the author and the enforcer of this legislation and its process that deprive the workers of what belongs to them by right. The smoke and mirrors announcement of public money being poured into Algoma Steel under the high ideals of jobs and a cleaner future, showed disregard for the workers' concerns, including concerns about the use of these monies by the Algoma owners to get richer and embark on still another scheme that could lead to yet another incursion into CCAA.

Workers' Forum commends the Algoma workers and United Steelworkers Local 2251 for refusing to participate in this photo-op and for standing firm in their demand to have a decisive say in the fate of the plant and in the conditions of work and the protection of the livelihoods of active and retired workers. Their future lies in their fight for the rights of all without which they are at the mercy of the gods of plague.

Algoma Steel went into bankruptcy protection in 1991, in 2001 and again in 2015 under the Companies Creditors' Arrangement Act to relieve its investors of financial and other obligations to steelworkers, the public and certain private interests. The India-based global cartel Essar Group seized control of Algoma Steel in 2007, operating it as a subsidiary known as Algoma Inc. In an arrangement among oligarchs in May 2021, the New York-based international investment cartel Legato Merger Corp was brought onto the scene. The deal among the oligarchs merges Algoma with Legato and gives Essar over $1.1 billion worth of new shares in Legato. In the midst of all this, in July, the Trudeau government gave Algoma $420 million in public funds.

Public funds should be used for public purposes to humanize the social and natural environment and to strengthen Canada's self-reliance and stability. Human-centred productive enterprises are a most effective way of generating public funds for public purposes. Public funds must not on any account be handed over to private interests to defend and enlarge their private enterprises and increase their control over Canada's economy.

As always, Trudeau spouted high sounding words to excuse the corruption of using his position in government to pay public funds to the rich. To give the corrupt practice a shiny veneer, Trudeau declared that the payment to the Essar global oligarchs would "create jobs and build a cleaner future."

Of course the money in the hands of the rich may create jobs. Buying workers' capacity to work and having them work in their private enterprises is a way the rich become richer, through expropriating the added-value workers produce. And that is the point for the ruling elite. For them, public money must go towards strengthening the control, domination and privilege of the rich and weakening the capacity of the working people to defend their rights and have any control over their work and lives. Global control by the oligarchs in no way brings stability and security to the economy as Canadians have seen time and time again.

Public money on the contrary should be invested in social programs to meet the needs and guarantee the rights of the people, and to create stable human-centred social enterprises that put workers to work creating added-value for the common good and not to make the billionaires richer. The added-value from human-centred social enterprises can be invested back into the Canadian economy to defend it from economic crises and to create possibilities for Canadians to enhance their control over their economy and its direction.

Governments paying the rich underscore the need for a new direction for the economy. The socialized economy must be under the control of Canadians with the added-value workers produce invested back into the economy.

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When the Trudeau government handed over public funds to Algoma Steel in July, to their credit, United Steelworkers Local 2251 did not attend the photo op. Trudeau announced that the money was to help Algoma transition to electric arc furnace (EAF) steelmaking. Workers' Forum spoke to Mike Da Prat, president of USW Local 2251 to get his opinion on the deal.

Mike Da Prat: The agreement with the government was reached without any consultation with the workers. We have collective agreement language that says we are supposed to be involved in a consultative manner from the very beginning. The federal government should have said we need to talk to the workers because they have been subjected to Companies' Creditors Arrangement Act (CCAA) bankruptcy protection three times. They owed us that. Why is the government jumping in without any thought about requiring the company to, at a minimum, protect jobs? There are some of us that are here now that have been through all three of those CCAAs.

Right now Algoma Steel is making money and they have decided that with the government funding, this is the route that they are taking. What the government should have done was contact us, hear our concerns. What we could have done with the loans as leverage was get some guarantees on work assignments and how movement of workers within the changed operation will take place. That did not happen. Minister Champagne was there at the announcement. He has no worries about job reductions but we do. We didn't attend the announcement because according to us it was a mere photo-op between the government and the company.

This process is not like an on and off switch, that we are an integrated steel mill today, then that is switched off and the EAF is switched on. That is not how it works. There is going to be a transition period. They will need to run both processes simultaneously for a period. New people are going to come in to get trained in the new process. The older workers who are trained in the current process cannot be left out in the cold to be gotten rid of when the EAF is running at full speed. They will need a job. We are talking about a large number of workers. That could be a mess and the company wants to embroil us in this so that it can say that we were involved when they did not consult us about the project.

Statements were made that we are going green, yet there is no evidence for that conclusion. If we want to talk about going green, what benchmark are we using? Are we using calculations of emissions made based on when Algoma was new? Are they measuring the actual emissions that they are producing now, when there are a number of pieces of equipment that are not optimally maintained? We are having a hard time keeping the environmental equipment maintained now. With the decision that has been made that we are going EAF, the chances of their pouring money into the existing equipment to prevent pollution are zero. Are we going to be belching even more pollution in the short term?

We were not given an option to even have a discussion about why we are not upgrading our existing equipment. Now, when they say the reduction of greenhouse gas emissions that will be achieved by this project is equal to what is produced by 900,000 passenger vehicles, I do not think that they have actually measured anything. If we are talking about a theoretical gross emission reduction of x, is that really the net result if you have increased diesel emissions because scrap for the EAF is now going to be brought in by transport? You also have to take into account that increase in emissions.

At Algoma, we have been through three CCAAs. We were presented by management with decisions we were told were for long-term solutions to our problems. Whatever management says is for our benefit, it is not. They make big money, they accumulate debt, they do not pay down the pensions and then they can't carry on. They can't pay what they owe, they say. Then the reset takes place at the expense of workers and taxpayers, and then we go through it all again. They are telling us that this new project will be good for the long term. That is the exact same thing that they have told us each time. Some of the people that were here through all of that are still here. Not the CEOs —- they moved on.

In my opinion, this was a photo-op for election purposes. The company gets the money and the government gets the photo-op. That is the trade-off.

That is why we did not participate.