Federal and provincial governments knew Algoma Steel planned to lay off workers when they provided $500 million in loans in September, the company’s CEO confirmed Tuesday, despite publicly promoting the bailout as a measure to “protect Canadian steel jobs.”
Algoma Steel CEO Michael Garcia told CTV’s Power & Politics that both levels of government understood the company’s business plan included significant workforce reductions before they agreed to the bailout. “I don’t think anybody would loan the company half a billion dollars without asking very detailed questions about what our business plan was,” Garcia said.
The company issued 1,000 layoff notices Monday, effective March 23, 2026. The cuts came just over two months after Finance Minister François-Philippe Champagne announced the federal government was “acting to protect Canadian steel jobs” with $400 million in loans, while Ontario provided $100 million.
Ontario Premier Doug Ford acknowledged Tuesday his government knew the company would soon lay off workers before approving the provincial loan. “The Titanic was sinking,” Ford told reporters. “We either save two-thirds, or we don’t save anything, and I believe in saving the company.”
Garcia said the government has understood since 2022 that Algoma would shutter its blast furnace and coke oven operations during the transition to electric arc furnace technology. In March 2025, he publicly acknowledged in an interview with Village Media that the new technology would mean 1,000 fewer employees once both electric furnaces operated, which the company originally expected around 2029.
President Donald Trump’s 50% US tariffs imposed in June accelerated that timeline by approximately two years, forcing the company to close the blast furnace operations in early 2026 instead of late 2027. “With the dynamics and the significant change to our available markets, with the US tariffs, the future has arrived early at Algoma Steel,” Garcia said.
Garcia emphasized that without the government financing, the situation would have deteriorated much faster. “We could not survive without this accelerated timeline or financing that the federal and provincial governments have provided,” he said, adding the jobs the company cuts in March are “not coming back.”
Ontario Economic Development Minister Vic Fedeli defended the provincial loan, saying everyone knew layoffs would come. “Everybody, including the unions, knew the layoffs were coming, but they’re coming faster because of the Trump tariffs,” Fedeli said. He did not specify when Algoma informed the government about the layoffs.
Prime Minister Mark Carney defended the government’s decision in the House of Commons on Wednesday, quoting Ontario Premier Doug Ford’s defense from the day before. “May I quote a Conservative leader that’s actually in office? The Premier of Ontario,” Carney said. “‘We had a choice: save two-thirds of the jobs or let the company go down. We chose the future for Algoma Steel so they can invest in the future. So we can buy Canadian. So we can build this country.'”
Finance Minister Champagne told reporters the situation at Algoma would be “far different today” without government support. “If it was not for the support, the situation at Algoma would be dire today. More challenging than what you see,” Champagne said, adding that the funding helped ensure the company’s long-term sustainability.
Ontario NDP Leader Marit Stiles criticized the government’s handling of the situation during Question Period. “A thousand families got the rug pulled out from under them just before the holidays,” Stiles said. “Why didn’t you have a plan to protect those jobs?” Stiles met with Algoma Steel workers in November and plans to return later this month to meet with affected employees.
United Steelworkers Local 2251 President Mike Da Prat said the company issued layoff notices to 900 of his members. He expressed frustration that Algoma was not implementing mitigation strategies the union negotiated to help workers transition, including job retraining programs. Da Prat said the company claims through lawyers that mitigation strategies expired July 31, 2025, though the union disputes this interpretation.
“The government let us down in the sense that there was funding provided without any conditions, and the condition should have been that there had to be mitigation,” Da Prat said.
Sault Ste. Marie economic development director, Rick Van Staveren, said the 1,000 direct layoffs could impact 3,000 more jobs in the city of 72,000 people. The layoff notices came days before the holiday shopping season, creating anxiety throughout the community.
Garcia said Algoma’s future depends on strengthening the domestic steel market through buy-Canadian policies and transportation subsidies that help offset shipping costs across the country.
“A strong Canadian steel industry requires a strong Canadian market,” he said.
Algoma Steel, Canada’s last remaining independent steel producer, has been transitioning to electric arc furnace steelmaking since 2021. The technology is more cost-effective and flexible, but requires significantly fewer workers than traditional blast furnace operations.
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