In a major restructuring move triggered by punishing US tariffs, Canadian steel manufacturer Algoma Steel Group has announced it will eliminate approximately 1,000 positions and cease operations at its primary blast furnace in northern Ontario. The job cuts represent a staggering 40% of the company's workforce.
Tariffs Force a Painful Transition
The Sault Ste. Marie-based firm pointed directly to the Trump administration's decision to impose 50% tariffs on foreign steel as the catalyst for this drastic action. According to a Bloomberg report, these tariffs have severely crippled Algoma's ability to sell its products in the crucial US market.
Company spokesperson Laura Devoni stated that the tariffs had "fundamentally altered the competitive landscape and sharply limited our ability to access the US market." The financial impact was immediate and severe, with the company's sales plunging by 13% in the third quarter following the tariff imposition.
Shift to Electric-Arc Furnaces by 2026
Facing sustained losses, Algoma is embarking on a fundamental shift in its production strategy. The company plans to close its traditional blast furnace and is also considering shuttering its coke-making operations.
The future focus will be exclusively on manufacturing steel using electric-arc furnaces, with this transition slated for completion in early 2026. "This transition is necessary to protect Algoma’s future in the face of these extraordinary and external market forces," the company explained, adding it would continue to advocate for fair trade.
Government Support Amidst Layoffs
Despite the bleak news for employees, Algoma has secured significant financial backing. The governments of Canada and Ontario have provided emergency loans totaling C$500 million to help the struggling steelmaker navigate this crisis.
The layoffs are confirmed to take effect on March 23, 2025. Canadian Industry Minister Melanie Joly reiterated strong governmental support in Parliament, condemning the "unjustified and unjustifiable tariffs imposed by the White House." She vowed further assistance to help Algoma develop new products and access alternative markets during this challenging period.
Currently employing around 2,500 people, Algoma's decision underscores the profound cross-border impact of trade policies on industrial communities and the global steel industry.
