Sault Ste. Marie, Ontario – Algoma Steel, a bedrock of Canadian industry, delivered a stark message to its workforce this Monday, issuing layoff notices to approximately 1,000 employees, nearly a third of its total staff—at its Ontario plant. The cuts, set to take effect on March 23, 2026, are a direct consequence of punishing 50 percent U.S. tariffs on Canadian steel and the company's urgent pivot towards greener production methods.
For years, Algoma Steel has been planning a monumental shift from its traditional, carbon-intensive blast furnaces to more efficient electric arc furnaces (EAFs). This transition, a significant move towards decarbonization for Canada, was always going to reshape the company's operations. But U.S. trade policies, specifically the 50 percent tariffs imposed by President Trump, have slammed the accelerator on that timeline, pushing the company to close its blast furnace and coke ovens a full year ahead of schedule.
Company spokesperson Laura Devoni minced no words, calling the accelerated change "vital for Algoma's future in the face of these extraordinary and external market forces." The tariffs, which combine a 25 percent duty under Section 232 of the Trade Expansion Act of 1962 and an additional 25 percent under the International Emergency Economic Powers Act (IEEPA), took full effect in June 2025. They fundamentally altered the competitive landscape, severely limiting Algoma's access to its crucial American market and leading to significant financial losses throughout 2025. Algoma's financial reports have consistently cited these tariffs as a major drag, showing substantial tariff costs and negative EBITDA in recent quarters.
The human cost of this economic squeeze is undeniable. Union leaders confirmed the layoffs would hit both salaried and production staff. Bill Slater, president of Local 2724, which represents salaried workers, stated that 150 of his members would be affected. Mike De Prat, president of United Steelworkers Local 2251, confirmed approximately 900 production workers would receive notices. He also noted that while the EAF transition was anticipated to bring some job changes, the tariffs "definitely played a role" in the timing and scale of today's announcement.
Algoma Steel is offering recall rights and severance options, and both the company and union leadership are working with government partners to provide support. Just last month, on November 17, Algoma finalized $500 million in government financing, $400 million from the federal government and $100 million from the Province of Ontario. This funding was intended to strengthen the company's balance sheet and aid the EAF transformation, though it clearly couldn't fully offset the tariff impact. Ontario officials have also pledged help with retraining and local procurement to ease the transition for affected workers.
The irony here is sharp: Algoma's shift to EAF steelmaking is touted as the largest industrial decarbonization project in Canada, promising to slash the company's annual carbon emissions by up to 70 percent. In July 2025, the company celebrated a major milestone, achieving its "first arc" and producing steel from its new Unit One EAF. The second EAF unit is expected to be fully operational by the end of this year. This green leap forward, however, is now inextricably linked with significant job losses, accelerated by a trade war that Ottawa has actively pushed back against.
The Canadian government has not been silent, with Prime Minister Justin Trudeau previously announcing retaliatory tariffs and new support measures for industries hit by U.S. trade actions. Just last week, Canadian officials outlined plans for a new global 25 percent tariff on steel derivative products, a move aimed at creating space for Canadian producers in a market heavily distorted by U.S. policies.
For a closer look at the initial announcement, you can see the original post here.
The situation at Algoma Steel is a stark reminder of how rapidly global trade disputes and the urgent need for environmental transformation can converge, creating profound and immediate consequences for thousands of working families. It’s a complex, messy intersection where macro-economic policy meets the very real livelihoods of people on the ground.