Inside the $200M plan to turn Sault Ste. Marie into a Great Lakes shipping hub

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Sault Ste. Marie, since the beginning of time, has always been a gathering place, a place of trade.

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From the early days of Bawating, “the place of the rapids,” now often referred to as the centre of Canada, has been a destination to fish and trade. French explorers and settlers used Sault Ste. Marie to develop the Northwest Fur Co., used as a supply and trans-shipment point, in its struggle with the Hudson’s Bay Co.

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The community along the St. Mary’s River that connects Lake Superior and Lake Huron has grown and expanded since its inception. Plans of trade, commerce and commercialism on the St. Mary’s River waterfront have always been at the core of the Northern community. In fact, the resurgence of efforts to develop a deep-water port in Sault Ste. Marie is not a new phenomenon.

Sault port project history

The concept dates back to the 1950s when traffic along the Sault Canal had reached a milestone with more than 125 million tons of cargo travelling through the Canadian and American Locks. The Sault Star reported 1953 as a record-setting year with the cargo – mainly wheat, iron ore and coal – passing through the Sault Canal.

Three years later, the idea of a deep-water harbour took shape. In November 1956 the Chamber of Commerce Seaway Committee suggested two 183-metre docks were needed to handle the increased tonnage expected as a result of the completion of the St. Lawrence Seaway. It was suggested that Algoma Steel could build a $750,000 rail spur to the site.

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Soil testing was to be completed, and it was determined Algoma Steel and Mannesmann Tube had the necessary industry to support a harbour. In 1958, the federal government committed $4 million to build the port.

The plan was short lived. It was shelved in 1958 as Algoma Steel was undertaking its own expansion and couldn’t begin another project. By 1962, public works determined there was not enough traffic to warrant building the port, mainly because local businesses couldn’t commit to the required 250,000 tons of shipping materials required to make it feasible.

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The port idea resurfaced in the spring of 1967 when the Northeastern Ontario Regional Development Commission recommended that the provincial government study the economic merits of better harbour facilities. The city received a $5,000 grant to examine regional businesses and their imports and exports needs.

The final report to council in December 1967 concluded “future growth of the city and the area depends on the immediate planning for an industrial park and harbour complex,” The Sault Star reported.

The following spring, a harbour committee was formed, and Leigh’s Bay was identified as the potential deep-water harbour site.

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Land was purchased in the area. More reports were completed despite early opposition fearing that dredging would affect water quality.

In March 1972, the federal government committed $1 million to the project, promising work would begin that year. It never did. Delays were blamed on an Ontario Municipal Board hearing, environmental studies and finally the realization that some of the businesses that committed to the port had since moved elsewhere. The federal government lost interest, and infrastructure funding was never finalized.

The Chamber of Commerce declared the project “deader than a dodo,” in 1976, and the plan was eventually abandoned again.

Sault Port plan revisited

The rise and fall of the port plan continued in the 1980s, when Algoma Steel agreed in principle the city would build a deep-water port at Leigh’s Bay near the slag dump at an estimated cost of $5 million to $6 million.

This 1983 concept envisioned the port to be created in stages. It too, was short lived despite support from then area MPs Ron Irwin and Maurice Foster.

“We will indicate that this development is vital to Sault Ste. Marie,” a Sault Star story said. “We will suggest to the government that planning has gone on since 1972 and that something should be done quickly.”

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Former mayor John Rowswell strongly advocated for a multi-modal transportation plan. The concept was to transform the city into a global logistics hub. His vision leveraged the city’s unique geography at the intersection of major rail, highway and marine routes. It included creating a community public access port that could handle deep-sea cargo, allowing local industries to access global markets more efficiently.

However, his focus centred on creating a transpolar air cargo hub for the Sault, and the port project was never developed.

Essar Ports 2014 report modernized

Enter Essar Steel Algoma, which formalized a deep-water port in 2014. By now, the $150-million project was to use the steelmaker’s private docks and transform them into a world-class, public-access international marine gateway.

The project, led by Essar Ports was then India’s second-largest private-sector port company. The project was shelved once Essar Steel Algoma filed for creditor protection under the Companies’ Creditors Arrangement Act in 2015. A year later, a judge declared Port of Algoma Inc. insolvent, a direct result of the steelmaker’s financial woes.

It’s those reports that have recently been dusted off and edited, the newest vision reducing the Port of Algoma in scope and size, again garnering the attention of Sault Ste. Marie city council and the federal and provincial governments.

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A new-found partnership with the Hamilton-Oshawa Port Authority (HOPA), gives much-needed credibility to the latest version of the multi-modal port plan.

HOPA, the largest Canadian port company on the Great Lakes, handles more than $4 billion worth of cargo annually. It operates ports in Hamilton, Oshawa, Port Colborne and Thorold.
It’s believed the partnership will create a new north-south trade corridor that connects Northern and southern Ontario and export destinations beyond.

“For more than 55 years, it has only remained an idea, waiting for the right moment. We feel that moment is here and today,” Mayor Matthew Shoemaker said when the partnership was announced in 2025.

Like the early port concepts, Algoma Steel is at the table for the project and its industrial land, deep-water access and existing infrastructure are targetted to support co-located economic activities.

A double-slip port on Algoma Steel property could link steelmaking, logistics, energy, mining and advanced manufacturing and reinforce the Sault’s role as a strategic engine of international growth in Northern Ontario, Shoemaker said.

This time, during changing global economic partnerships, the Sault Ste. Marie project integrates with Canada’s nation-building plan to strengthen supply chains, unlock economic potential and deliver long-term benefits for Canadians.

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That’s the key message city officials and HOPA are projecting to both the federal and provincial governments in its quest for infrastructure funding to finally get the long-awaited project moving forward.

The 2014 business case has been fact checked, edited and updated. Presentations have been made to both levels of government.

The project is now estimated to cost $200 million. That includes port infrastructure with two slips costing $70 million and a further $130 million for critical upgrades to the rail lines that will connect the port inland. All would be created on 216 acres of industrial land with long-term growth, creating a 950-acre multi-user port.

A second phase of the project would activate 741 acres for business and cargo growth.

The current plan has again captured the interest of the federal government. After all, it aligns with the federal government’s Canada Strong motto, FedNor’s Prosperity and Growth Strategy for Northern Ontario, the Canadian Critical Minerals Strategy and it meets the nation building project criteria.

Provincially, it meets the Ontario Critical Mineral Strategy, Ontario Forest Sector Strategy and Ontario Marine Strategy.

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On his visit to Sault Ste. Marie earlier this month, federal Transportation Minister Steve MacKinnon said the project “captures exactly the spirit of the moment we’re in in Canada, where we need visionary leaders to come up with these projects that help build our country. It’s emblematic of what we’re trying to accomplish.”

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He toured the proposed site and met with the city and other stakeholders to get the highlights of the business plan.

The verbal request for funding was officially made and a formal application is expected to be submitted shortly to Canada’s trade corridors fund, a $5-billion fund designed to fund transportation infrastructure projects including marine, rail, road and air.

Arguably, MacKinnon, who also wears the hat of Government House leader, is the most important federal minister to get on board for the Port of Sault Ste. Marie project.

The business case

MacKinnon was briefed on the business case in a slideshow but Shoemaker said the full argument is being submitted so the government can do its due diligence.

The business case focuses on the existing minerals and mining, forestry, agriculture, steel and manufacturing sectors, in the region that show the port will be viable.

“Our numbers continue to be refined as our consultation with industry and manufacturers in town and in the district are ongoing. We’re going to present a very solid, well researched, recent business case,” Shoemaker said.

Ring of Fire prospects would present additional growth down the road, but the business case is viable now, based on the existing exports and imports, by tapping in to existing and expected usage capacity.

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The port is estimated to take about two years to build and begin operations. Construction would require between 1,400 and 1,800 full-time equivalents.

Once operational, the port itself would create 2,488 jobs by Year 5, the business case states. Of those, almost 800 would be direct jobs, 1,0000 induced jobs and 690 indirect jobs.

The sustained economic impact includes an estimated $134 million of annual personal income, and $343 million in annual economic activity.

Aside from Algoma Steel, a port would increase cargo 156 per cent by the fifth year of operations.

Specifically, the business case identifies more than a dozen active and emerging projects within 150 kilometres of the proposed port.

The heavy reliance on long-haul trucking, especially for copper, zinc, gold and aggregates could be substantially reduced and the multi-modal industrial lands are ideal for value-added processing opportunities.

The need to diversify forestry into new markets is noted. There are about 10 major producers in the immediate Sault area, exporting 300,000 tonnes across the border.

Algoma is well positioned to ship steel plate for automotive, shipbuilding and other markets in southern Ontario. A port would also support the steelmaker’s potential for new rail and beam manufacturing.

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Manufacturers, such as Tenaris, would gain laydown space and better transportation service to accommodate their growth plans, the business case states, and new multimodal industrial land could attract new manufacturers in steel processing, energy and other sectors.

The case also shows a market to expand the salt and aggregates market and agriculture.
Across Northern Ontario, a port could severely reduce 4,450 truck trips between Northern and southern Ontario weekly, capturing a transportation market that spans around the north to include Sudbury, Temiskaming and Cochrane.

Sault Ste. Marie’s next steps

The federal government application to create the Port of Sault Ste. Marie will be officially submitted by HOPA.

“The hope is to have some of that funding come from the feds, some from the province, some from the city and some from industry,” Shoemaker said.

He said MacKinnon wasn’t surprised by numbers presented to him. “He said they fall in line with projects of this nature.”

The money would be use for refurbishing dock walls to allow two vessels to berth, cargo laydown space, security and safety systems, a rail transload area and infrastructure for tenants to lease industrial space. Rail upgrades to connect to Algoma Central Railway would also be completed.

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It’s estimated the port will provide $26 million in provincial and local taxes and $26 million in federal taxes.

Meanwhile, Sault-Algoma MP Terry Sheehan said he’ll continue advocating for the project and believes getting MacKinnon to see the potential site first-hand was paramount.

The struggles Algoma Steel – and other Sault manufacturers – have faced with the challenges created by the unjustified U.S. tariffs on steel are well known by the federal government.

MacKinnon said, “We’ll stand behind this community, the workers behind this community, and we’re going to keep looking for ways to diversify the economy and find ways to help the people who live and work here.”

edella-mattia@postmedia.com

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