Algoma Steel Group Inc. plans to lay off approximately 1,000 workers as it prepares to close its blast furnace and coke-making operations in Sault Ste. Marie, Ontario, by early 2026. This decision comes as the company faces significant financial challenges due to U.S. tariffs on steel and aluminum. The layoffs will take effect on March 23, 2026, affecting about 40% of Algoma's total workforce of 2,500 full-time employees.

Laura Devoni, Algoma Steel’s vice president of Human Resources and Corporate Affairs, stated, "These tariffs have fundamentally altered the competitive landscape and sharply limited our ability to access the U.S. market." She added that the company has been forced to end its long-standing operations as an integrated steel manufacturer.

The transition to electric arc furnace (EAF) steelmaking is set to occur a year earlier than initially planned. Algoma's decision is part of a broader strategy to adapt to market pressures and safeguard its future. The company reported a 13% decline in third-quarter sales and incurred a direct tariff cost of $89.7 million.

In September, the federal and Ontario governments provided a $500 million low-interest loan to assist Algoma in navigating these challenges. This funding is part of a $10 billion program aimed at supporting companies affected by tariffs. Algoma's CEO, Michael Garcia, emphasized that even if a steel deal is reached with the U.S., the company will not revert to its previous business model. Instead, Algoma is shifting its focus to meet domestic demand in sectors such as defense, infrastructure, and energy.

The layoffs at Algoma Steel are part of a larger trend affecting the Canadian steel industry, which has struggled since the imposition of tariffs by the U.S. in 2025. Other companies, such as the Canada Metal Processing Group, have also announced job cuts in response to these economic pressures.

The union representing some of the affected workers, United Steelworkers Local 2724, confirmed that Algoma issued 1,050 layoff notices, including about 150 to its members. Bill Slater, the union president, expressed concern over the impact of these layoffs on the community.

In response to the ongoing challenges, Prime Minister Mark Carney recently announced measures to bolster the domestic steel market, including tighter quotas on foreign steel and reduced freight rates for inter-provincial rail travel. Ontario's Minister of Economic Development, Job Creation and Trade, Vic Fedeli, reiterated the government's commitment to support affected workers through retraining programs and other resources.

As the steel industry continues to navigate these turbulent times, Algoma Steel's transition marks a significant shift in its operations and strategy, aiming to adapt to the evolving market landscape while providing support to its workforce.