Algoma Steel Group Inc. has served layoff notices to about 1,000 workers and plans to close its blast furnace in Sault Ste. Marie, Ont., in a bid to weather the financial storm emanating from U.S. tariffs.
The northern Ontario company said on Monday that it is closing its Sault Ste. Marie’s blast furnace and coke-making operations in early 2026 as part of its transition to electric arc furnace steelmaking — a year earlier than originally planned.
“These tariffs have fundamentally altered the competitive landscape and sharply limited our ability to access the U.S. market,” said Laura Devoni, Algoma Steel’s vice president of Human Resources and Corporate Affairs, in an emailed statement. “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.”
The layoff notices will take effect on March 23, 2026. The 1,000 affected employees represent 40 per cent of Algoma’s total workforce of 2,500 full-time staff.
The century-old steelmaker has faced persistently weak steel demand and pricing pressures since U.S. President Donald Trump imposed 50 per cent tariffs on Canadian steel and aluminum. Algoma saw third-quarter sales decline by 13 per cent and absorbed a direct tariff cost of $89.7 million.
The federal and Ontario governments offered a $500 million low-interest loan in September to help Algoma Steel in Sault Ste. Marie. This marked the first loan from the government’s $10-billion Large Enterprise Tariff Loan program, which supports companies facing tariff-related challenges.
Algoma said on Monday that the transition to an electric arc furnace is essential to safeguard Algoma’s future amid “these extraordinary and external market forces.”
“We fully understand how unsettling this news is for our employees, their families, and the broader Sault Ste. Marie community,” the company said, adding that it would work closely with government partners, union representatives, and community organizations to deliver support and transition services to impacted workers.
Algoma’s job cuts are the latest casualty of the trade war triggered by Trump’s tariffs. Earlier this year, the Canada Metal Processing Group, part of The Heico Companies, reduced its workforce by 140 across three plants, and Algoma had previously laid off 20 employees in March over the same tariffs.
As many as 12,000 Canadian auto parts workers lost their the jobs following temporary closures at Stellantis plants in Windsor and Warren, Mich., the Automotive Parts Manufacturers’ Association said in April.
Algoma Steel CEO Michael Garcia said on a conference call in October that, even if Canada reaches a steel deal with the United States, the company will not return to its old business model.
After being shut out of the U.S. market, Algoma is focusing on reorienting production toward domestic demand in sectors such as defence, infrastructure, energy and manufacturing.
The company said the $500 million in government financing will help transform Algoma from a cross-border commodity producer into a Canadian-focused supplier of essential steel products.
With files from the Canadian Press
