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Small and medium size businesses, charities all to feel the pinch from Algoma Steel’s job loss.
Published Dec 02, 2025 • Last updated 3 hours ago • 6 minute read
Algoma Steel’s job losses will have impact on other industries and businesses in Sault Ste. Marie. jpg, SH, apsmcArticle content
As news of Algoma Steel’s massive layoff announcement spread through Sault Ste. Marie, concern has deepened that other job losses from secondary industries could follow close behind.
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Sault Ste. Marie’s steelmaker issued 1,000 layoff notices Monday, as it prepares to shut down its blast furnace and coke-making operations in the new year, about one year prior than expected. The quicker ramp up of the electric arc furnace comes as tariff pressures continue to plague Algoma Steel and cut off the company from the U.S. market.
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“It’s very unfortunate how this happened and how it rolled out,” said La-Na Fragomini, president of the Sault Ste. Marie Chamber of Commerce. “We knew there would be job losses with the electric arc furnace, but the tariffs pushed those losses further ahead.”
Fragomini said she’s bracing for the trickle-down effect on how those 1,000 layoff notices, which kick in March 23, will affect small and medium size businesses throughout the community.
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For starters, she said, the immediate effect will see people be leery about spending and budgeting will take a more cautionary turn, including during the current holiday season and that will make it extremely difficult for existing and new local businesses, whether they be retailers, restaurants or services.
“It’s going to be a struggle. There is no doubt about that,” she said.
In today’s age, many begin their Christmas shopping early, capitalizing on early sales and Black Friday deals, and that means some of the spending for the season has already been made.
However, Fragomini anticipates that Algoma’s announcement may result in some people holding back on some of the extras or making adjustments like eliminating large spends on trips or vehicles, while others may refrain from smaller purchases.
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“It’s not just the retail and restaurants that are going to be affected but it’s things like the housing market, the car purchases,” she said.
And just as concerning is the effect that the layoffs will have on local charities.
“Charities will be gravely affected too. This is a huge time for them and they’re already struggling with the crisis we already have in our community and now they’re going to see an even bigger impact at a time when push comes to shove and people are taking care of their own house,” Fragomini said.
The chamber has no knowledge of when the trickle-down effect will occur but anticipates it could come very quickly given the short timelines to shut down Algoma Steel’s blast furnace and coke-making operations.
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It will be launching an advocacy campaign, asking the provincial government to offer more supports and assistance to Sault Ste. Marie and those affected by the layoffs.
“We will work with everyone and do the best we can to help,” she said. “We’ve been forced into a reactive versus a proactive approach, but we’ll get through it.”
Rob Van Staveren, the city’s director of economic development, said Statistics Canada as a standard multiplier to determine job loss of direct, indirect and induced jobs.
An indirect job would be a supplier or servicer of Algoma Steel and an induced job as a supplier or servicer of the indirect job or company.
Van Staveren said that using the 1,050 job losses from Algoma, along with an additional 103 job estimate from known “close suppliers” who could likely be affected, multiplied by 1.61 provides a total of up to 1,856 jobs that could potentially be lost in the community.
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“This is not an exact science. I stress the term ‘up to’ as other things could happen to mitigate these losses,” he said.
Van Staveren said data shows that about 3,000 jobs (direct, indirect and induced), multiplied by an average salary of $49,000 leads to current spending of up to $145 million in the community. That spending could be reduced significantly, depending on job loss and a reduction of disposable income.
“There could be a significant impact on the community and individuals and their families and that’s never a good thing,” he said.
Van Staveren said there is a lot of work being done in the community to attract new jobs – from more OLG jobs to lobbying for funding for a new port.
“That port project is moving at a good rate of speed, and the business plan will be done by year end,” he said.
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He said his department is also working on some “pretty good economic opportunities that could come with good jobs.”
While he couldn’t provide specifics, he said his team has had some “positive contact” with one potential company, as well as varying degrees with a few others that are “very close,” that could create “significant jobs” in the community.
“One major roadblock for employers in the lack of skilled labour available, but we will have that skilled labor so that puts us in a brighter light,” he said.
The economic development division has also applied for significant funding that would allow it to move forward with trade missions to further help diversify the local economy.
“We’re doing what we can to continue business development activities, and we’re moving full steam ahead,” he said.
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Meanwhile, the Federation of Northern Ontario Municipalities (FONOM) and the Northwestern Ontario Municipal Association (NOMA) are expressing deep concern about the layoff announcement and the blow to workers, families and the community.
“This is a difficult and uncertain moment for workers, their loved ones, and the entire community,” said FONOM President Dave Plourde. “FONOM stands firmly with the people of Sault Ste. Marie as they navigate the impacts of this decision. We will continue to advocate for a strong, stable steel sector and for the return of these jobs as quickly as possible.”
NOMA President Rick Dumas echoed the same message in his statement. “Northern Ontario’s workers and communities should never be caught in the crossfire of a global trade dispute. NOMA remains committed to working with all orders of government to see this trade war resolved, industry stabilized, and good-paying jobs restored in Sault Ste. Marie.”
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FONOM and NOMA call on both the provincial and federal governments to work collaboratively with industry and labour partners to address the immediate impacts of these layoffs while taking concrete steps to protect and strengthen the steel sector across Northern Ontario.
Ontario NDP Leader Marit Stiles also weighed in.
“We need to make sure that government funding comes with strings attached that put workers first. Instead, the Premier handed millions over to Algoma Steel without ensuring certainty for Sault workers,” she said in a press release.
“Doug Ford told workers that he would fight Trump’s tariffs for them, but once he got their vote, he went right back to being the Premier for the bosses and CEOs. Meanwhile, his jobs disaster continues to send more Ontarians to the unemployment line,” Stiles said in the release, promising to return in December to meet with impacted workers.
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Liberal MPP Rob Cerjanec (Ajax), the party’s economic development and innovation critic, was recently in the Sault.
“I visited a community full of potential, with domestic and international businesses eager to invest and opportunities to expand provincial infrastructure – but that opportunity is being held back by government inaction,” he said.
He called the layoffs a “serious blow to the region and a warning sign for Ontario’s economy.”
Cerjanec wants the province to commit to supporting new production lines at the steel plant and help diversify and grow the economy in order to attract private investment through new provincial investment.
He told The Sault Star that provincial support is needed immediately, and it needs to be in a form that’s more than an action centre.
“The province needs to help Algoma look for new product lines to prevent further job losses and make sure they’re ready to go,” he said.
Cerjanec said he will be lobbying publicly and behind closed doors for the port funding and other supports, including making use of former Ministry of Transportation property that could be used for new industry or manufacturing.
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