Algoma Steel issued layoff notices to approximately 1,000 workers on Monday, citing US tariffs and an accelerated transition to electric arc furnace technology that will permanently end the company’s blast furnace operations more than a year ahead of schedule.
The layoffs affect roughly one-third of the 2,700-person workforce at the Sault Ste. Marie plant. The company will implement them on March 23, 2026. The announcement comes as the Canadian government faces mounting criticism over its response to US trade measures.
“These tariffs have fundamentally altered the competitive landscape and sharply limited our ability to access the US market,” said Laura Devoni, vice-president of human resources and corporate affairs at Algoma Steel. “As a result of these pressures, Algoma has been forced to conclude its long history as an integrated steel manufacturer.”
The 50% US tariffs on Canadian steel imposed earlier this year have forced the company to accelerate its planned transition to electric arc furnace steelmaking by early 2026, approximately one year earlier than originally scheduled. The company reported a 13% drop in sales during the third quarter, with direct tariff expenses reaching $89.7 million.
Bill Slater, president of United Steelworkers Local 2724, said union members anticipated eventual layoffs due to the technology transition but expected them at least a year later under normal circumstances. “The company is anticipating that layoffs will last at least 35 weeks,” Slater said, noting that employees’ years of service will determine their recall rights.
The layoffs come despite the federal and provincial governments providing Algoma with $500 million in loan assistance in September — $400 million federal and $100 million provincial — to help the company manage tariff impacts and modernization costs. The government aid failed to prevent the significant workforce reduction.
Read: Taxpayers Lend $500M to Struggling Algoma Steel, Get Nothing in Return
Finance Minister François-Philippe Champagne said the government has implemented programs to support affected workers and is working to prioritize buy-Canadian policies.
The company’s stock fell 7.6% Monday following news of the layoffs.
Mike Da Prat, president of United Steelworkers Local 2251, said the company issued layoff notices to 900 of his members. He described the impact as “a reduced manufacturing industry for Sault Ste. Marie” and noted the union is working with the company on mitigation strategies, including a trades helper program for displaced workers.
Devoni said the company will work with federal and provincial partners, union leadership, and community agencies to provide resources and transition assistance to affected employees. “This transition is necessary to protect Algoma’s future in the face of these extraordinary and external market forces,” she said.
The closure marks the end of integrated steelmaking at a facility that has been a cornerstone of the northern Ontario economy for generations.
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