Company, union blame U.S. tariffs for aluminum plant cutting one-third of workforce; ‘We’re all in it together’
Novelis has temporarily laid off approximately 70 hourly workers and cut 10 salaried positions at its Kingston, Ont. aluminum plant, blaming escalating U.S. Section 232 tariffs that have reached 50 per cent. It’s a situation that warrants co-operation and transparency from both employer and labour representatives during a difficult time for the tariff-exposed manufacturing sector, according to a United Steelworkers (USW) executive.
On Sept. 18, Novelis announced it was reducing production and staffing at its Kingston plant, temporarily laying off approximately 70 hourly workers and eliminating 10 salaried positions – cuts affecting roughly one-third of the facility's workforce. Both the company and the union, USW, attributed the decision directly to Section 232 tariff duties on Canadian aluminum by the U.S., which had escalated to 50 per cent when they took effect on Sept. 15, 2026.
"Novelis announced a decision to reduce production and staffing at its Kingston facility due to the cost of duties on Canadian aluminum imported into the United States,” Novelis said in a statement to media. “The decision affects roughly one-third of the facility's workforce. These are difficult decisions that affect our colleagues and their families, and we are supporting those impacted through this transition."
This isn’t the plant’s first tariff-related disruption. In June 2025, Novelis laid off 21 employees – approximately seven per cent of its workforce at that time – following an earlier round of U.S. tariff increases, local news outlet Kingstonist reported at the time. The Kingston plant produces specialty aluminum products for the marine, transportation, and industrial sectors.
A community under growing strain
The stakes reach beyond the plant gate. Kevon Stewart, District 6 Director of USW for Ontario and Atlantic Canada, says the cumulative impact on Kingston is already spreading – and isn’t confined to steel and aluminum.
"When you think about Novelis being a big employer within that region, I'm sure that they're not the only employer within that community that's being impacted by tariffs,” says Stewart. “You might not be hearing about it because the sectors that are being highlighted were steel and aluminum, but I'm sure there are other sectors within that community been impacted by these tariffs as well – so you have those workers that are now out beyond layoff and now Novelis workers coming on board, competing for whatever jobs that may exist within that community, it's a whole trickle-down effect."
The national picture is sobering. Statistics Canada recorded a net loss of approximately 42,000 jobs in August as tariff pressure mounted and Canada’s counter-tariffs enacted on Sept. 8 put the trade war between Canada and the U.S. into a new phase. Trevor Tombe, an economics professor at the University of Calgary in Calgary, Alberta, estimated the escalation could cost approximately 87,000 jobs nationally, with Ontario facing an estimated 36,100 positions at risk – figures he published via The Hub. Across industries, the Stellantis decision to lay off roughly 6,000 Canadian workers amid the US auto tariff in April 2025 showed how quickly that disruption cascades through a regional economy.
Since the U.S. started imposing tariffs through the escalation of the trade war, businesses and labour have been more united against the economic threat, says Stewart. “Government, employers, and unions are working closer together than I've ever seen because we all understand the viability and the impact on the economy,” he says. “Without the economy being viable, everyone's going to be impacted, so we need to work together to get a solution.”
What employers can do now
Stewart is clear about what companies in trade-exposed industries should be doing: communicating consistently and early with their unions, bringing workers into the process rather than presenting decisions after the fact.
"I think first and foremost, it's going to be transparency in communication and ongoing conversation with the union,” he says. “The workers need to understand that they're not the brunt of all these decisions, but more if they're part of the whole process, they can have a better understanding and appreciation when decisions are made."
The USW's collective agreement with Novelis sets the procedural framework for layoffs and recalls, but when the commercial case for a facility is hollowed out by tariffs, procedural protections aren’t enough on their own, according to Stewart.
"There will be an impact. The question is, how do we mitigate the impact?” he says. “And we mitigate that impact by ensuring that workers have a better understanding of the process and what we're going to do to make sure that they're taken care of when they are impacted."
Stewart also stresses the importance of ensuring there’s an opportunity for laid-off workers to return, if efforts to diversity trade bring back some business.
Employment insurance gaps and the federal response
Stewart is pressing the federal government to move faster on Employment Insurance (EI) reform – eliminating the standard one-week waiting period and expanding both the level and duration of benefits for workers displaced by tariff-related disruption.
"Instead of waiting for things to happen, they are happening, so we need to basically put these measures in place sooner than later,” he says. “So when these do manifest, workers are actually protected right away."
Employment and Social Development Canada (ESDC) extended three temporary EI measures until Oct. 10, 2026, including waiving the waiting period, suspending separation payment rules, and providing 20 additional weeks for long-tenured workers. The August announcement of a further $7.5 billion in support introduced the new Workforce Retention and Retraining Program (WRRP), consolidating the EI Work-Sharing program and the Worker Retention Grant.
For Stewart, the moment demands unity of purpose between labour, management, and government – not adversarial positioning.
"There are no sides on this, right? It's not you against me. It's not union against management,” he says. “We need to be on the same page and understand that we need an economy that's going to be viable and sustainable to maintain the manufacturing sector in Canada.
"We want to ensure that the business survives. And if the business survives, that means your employment survives as well," adds Stewart. “We have to know that we're all in it together.”
