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Published Dec 01, 2025 • Last updated 10 hours ago • 7 minute read
Algoma Steel’s Shane Gillespie explains the electric arc furnace to Sault Ste. Marie MP Terry Sheehan and FedNor Minister Patty Hajdu, while CEO Michael Garcia looks on during a visit to the Sault steelmaker last July. On Monday, it was announced that Algoma issued 1,000 layoff notices, effective March 23. Photo by ELAINE DELLA-MATTIA /The Sault StarArticle content
Algoma Steel has issued 1,000 layoff notices, all part of a plan to fire up its Electric Arc Furnace quicker than anticipated and shut down its blast furnace and coke-making steel processes.
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The layoff notices will be effective March 23, and are a combination of the transformation to Electric Arc Furnace steelmaking and the effect of tariffs.
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Transformation timelines have sped up as a result of the unprecedented tariffs imposed by the U.S., significantly affecting the steelmaker.
In a statement, Algoma Steel says the highly integrated North American steel market has been “significantly impacted by the unprecedented tariffs imposed by the United States” which have “fundamentally altered the competitive landscape and sharply limited our ability to access the U.S. market.”
“As a result of these pressures, Algoma has been forced to conclude its long history as an integrated steel manufacturer and close its blast furnace and coke-making operations in early 2026. Algoma will transition to Electric Arc Furnace (EAF) steelmaking at that time, a year earlier than previously anticipated or planned.”
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The layoffs have been deemed necessity to protect Algoma’s future, the statement says.
It was announced in mid-October that operations would move away from blast and coke oven steelmaking about a year earlier than planned. Algoma has spent about $987 million on its transition to EAF.
Since 50 per cent tariffs were imposed on Canadian steel entering into the U.S., that market has been effectively closed to Algoma Steel. It has been working to pivot to EAF steelmaking quicker to become a more cost-effective and efficient steelmaker.
“We fully understand how unsettling this news is for our employees, their families, and the broader Sault Ste. Marie community. We are committed to working closely with federal and provincial partners, union leadership, and community agencies over the coming months to provide resources, support, and transition assistance to all affected employees,” the statement said.
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United Steelworkers Local 2724 president Bill Slater, who represents the salaried workers, told The Sault Star about 150 of his members have received notices along with about 900 members from Local 2251.
“I believe the true number is about 1,050 employees, which includes exempt people (non-unionized employees),” he said.
The layoff notices were given to employees throughout the plant in positions that are being eliminated.
Now it will be up to both unions to review the list of eliminated jobs and examine bumping rights based on seniority, skills and ability, Slater said.
Local 2251 president Mike Da Prat said the amount of layoffs issued are expected and will affect those in the coke, iron and steelmaking plants, among others.
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“All departments will have an effect,” he said.
Da Prat said he can’t disagree with the company’s statement that the layoffs are precipitated by the conversion to EAF, and that conversion is occurring more quickly because of the tariff war.
“If the governments had put conditions on the financing they provided, they could have looked at mitigating strategies to keep more people in the jobs, by reducing the use of contractors, but we were never consulted and we’ve been fighting contracting out since 2004 and even more so in our later years,” he said.
Slater said that with the lack of steel sales as a result of tariffs, order books can be met with limited EAF production, and the blast furnace and coke-making ovens can be shut down.
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Slater and Da Prat agree the layoffs will be a blow to the community.
“I don’t believe this community can absorb 900 jobs,” Da Prat said. “If there is an opportunity to go elsewhere, what choice do they have?”
He recommends that affected employees reach out to the union hall before making any final decisions.
The unions plan on working with stakeholders to create an action centre to help affected employees.
The centre, under the Canadian Skills, Training and Employment Coalition, would help affected employees with things such as resume writing, skills development and retraining.
It’s hoped the site will be operational in January.
“We’re trying to get access to everything possible to help everyone out,” Slater said. “Our biggest concern is our membership, but we all live in Sault Ste. Marie, and we care about where we live and how this affects our community. And this will affect a whole lot of people, a lot of contractors, a lot of jobs that service the blast furnace and coke ovens and they are no longer needed anymore.”
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Under collective agreements, once the layoffs take effect March 23, employees will have access to Employment Insurance and income security top-ups, depending on years of service.
At 35 weeks of layoff, employees can choose to access a severance plan or stay on a recall list.
Sault MP Terry Sheehan issued a statement Monday afternoon, promising workers that “we will be there for you.”
“I am in contact with federal government departments and agencies that will directly respond to the needs of impacted workers and expedite any federal services required during these difficult times,” the statement reads.
Just last week, the federal government announced more supports for the steel and lumber industries, which include further limiting foreign steel imports to better protect Canadian steel producers in the domestic market. It also announced it would cut rail freight costs by 50 per cent to move Canadian steel and lumber interprovincially.
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A further $100 million over two years in program costs are earmarked to support eligible employers in all sectors with an active work-sharing agreement and who commit to supporting training for employees working reduced hours.
Mayor Matthew Shoemaker called the announcement “a real sad day for the community. We, in the Sault, are one big family and when one family member needs help and support the rest of us are called upon to offer that support and that’s what I hope to do as we move forward.”
Shoemaker wasted no time penning letters to Prime Minister Mark Carney and Ontario Premier Doug Ford.
“That’s how we’re going to negate as much of this impact as possible,” he said.
To Carney, Shoemaker said it is clear a resolution to the tariff issue needs to be found to stabilize the local economy, and the current economic fallout underscores the need for strong, targeted assistance to protect workers.
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He also wants to see the federal government fast-track a new Port of Algoma as a nation-building project that will strengthen regional economic development and create jobs. The business plan deadline could be pushed up by one month, so lobbying for funding can begin in the new year. “I think that’s achievable,” Shoemaker said.
“Second, any economic benefit tied to defence procurement must begin to flow now. The commitment to using Canadian steel in defence projects is admirable, but orders cannot wait – our steel industry faces a very real risk of permanent capacity loss,” he writes.
A second letter, to Ford, reiterates the importance of fast-tracking a port, with the province’s participation.
Shoemaker also renewed his request to relocate additional OLG jobs to Sault Ste. Marie to “represent a clear and practical opportunity to deliver meaningful economic impact in a region that urgently needs it.”
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“We are going to push the feds and the province, through the suggestions in those letters, to work with us, or approve initiatives that will see the capacity to create new opportunities,” he said.
Closer to home, Shoemaker said he’ll be urging city council to focus on getting the municipal portion of the budget levy to the lowest possible number in next week’s deliberations and he’ll bring forth many motions to move in that direction.
“This is a tough time. We’re heading into a time of year that should be filled with joy and hope and that’s been robbed from these families,” Shoemaker said.
Sault MPP Chris Scott agreed “there is no good time to get a layoff notice, but this time of year is obviously very tough.”
Scott said after receiving the call from Algoma Steel, he took the news directly to the premier’s office.
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Ontario provided $100 million of loans to Algoma Steel earlier this year and is working to set up the action centre to offer supports, review skill sets, retrain and have the affected workers ready to be deployed for new work.
The province’s Buy Ontario Act ensures that Ontario steel is used in project procurements and Scott said he encourages the federal government to do the same.
“We need a large infrastructure project that includes the feds, the province and perhaps a public-private partnership, and I will pound on the desk at every level to get that project approved,” he said.
“It’s now or never,” he said of the proposed port project. “It ought to be a nation building project and there are acres around the steel plant where this port is a good fit and can be good neighbours.”
Scott said his constituency office is also preparing to provide additional supports and materials, and anticipates additional secondary or ancillary jobs will also be affected.
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