Job cuts affect about one-third of workforce in Sault Ste. Marie, Ont.
Algoma Steel has issued layoff notices to about 1,000 workers at its Sault Ste. Marie, Ont., plant as the company confronts the combined impact of U.S. tariffs and its planned shift to electric arc furnace steelmaking.
The company, a major employer in Northern Ontario, said the decision reflects both “unprecedented” trade pressures and structural changes to its operations that will reduce the size of its workforce over the coming years, according to CTV News.
Algoma Steel has been hit hard by high U.S. tariffs on Canadian steel, which the company said have significantly affected its recent financial results. The tariffs have “fundamentally altered the competitive landscape” for its products, an Algoma spokesperson said in an emailed statement to media.
At the same time, the Sault Ste. Marie mill is in the midst of a multi‑year transition away from traditional blast furnace and coke-making operations toward an electric arc furnace (EAF) system. Some of the current layoffs were anticipated as part of that shift, with the blast furnace and coke operations scheduled to be shut down as the EAF comes online, Algoma’s statement said.
The layoff notices are effective March 23, 2026, and are described as a combination of the company’s transformation to electric arc furnace steelmaking and the impact of tariffs, the Sault Star reported.
Impact on workforce and local community
Algoma Steel’s latest move affects roughly one third of its workforce in Sault Ste. Marie, the president of United Steelworkers Local 2251, Mike Da Prat, told CBC News. He said about 900 of his members have received layoff notices.
Da Prat noted that during 2022 contract talks it was already clear “there were going to be hundreds of job cuts” connected to the transition to EAF technology. He added that the union and the company have been working on mitigation strategies, including a trades helper program intended to support displaced workers.
Despite those efforts, Da Prat told CBC News that the community should expect a smaller industrial base going forward, describing the effect as “a reduced manufacturing industry for Sault Ste. Marie. No doubt about that.”
Government financing and efforts to protect jobs
The layoffs come even as Algoma Steel has secured significant public financing to support its modernization plans and help buffer the impact of tariffs. In November, the company announced that it had completed $500 million in government financing arrangements, including $400 million in federal loans and $100 million from the Ontario government, according to Northern Ontario Business.
Those funds are tied in part to Algoma’s transition to lower‑carbon EAF steelmaking. Company leadership said in the November announcement that it was “grateful for the government’s confidence in Algoma’s future as a low-carbon steel producer.”
The financing at the time was intended to protect jobs in the face of U.S. tariffs, underscoring the extent of the pressure on Canada’s steel sector from trade measures south of the border.
Union, trades groups respond to job cuts
The job losses are being felt beyond Algoma’s directly employed workforce. UA Local 800, which represents skilled tradespeople who help build, repair and modernize the Algoma plant, said that many on the production floor were among those hit when the company announced layoffs in July, citing tariff pressures, according to Northern Ontario Business.
UA Local 800 members have worked on the new EAF project that is central to Algoma’s long‑term strategy and lower‑carbon plans. The union describes its relationship with Algoma as long‑standing and based on adaptability and trust, telling Northern Ontario Business that its members have played an integral role in maintaining and upgrading the plant through previous economic cycles.
Union representatives say they will continue discussions with Algoma Steel on ways to reduce the impact of the cuts, including retraining opportunities and redeployment where possible, building on the mitigation strategies already in place.
Ongoing uncertainty as transition accelerates
Algoma’s move to EAF technology is now set to occur earlier than initially scheduled, with the shutdown of existing operations and the EAF transition expected in early 2026, about a year ahead of the company’s first plan, CBC News reported.
The company had previously signalled that “hundreds of layoffs” were expected in connection with the EAF transition, and that an internal email to employees referenced future job reductions without specifying a timeline. The issuance of 1,000 formal layoff notices now provides a clearer indication of the scale and timing of the restructuring.
Algoma Steel has not publicly detailed how many of the affected workers may ultimately be recalled or reassigned once the new electric arc furnace operations are fully established.
