Opinion | The Algoma layoffs were a tragedy. This is how we can fix the issues that caused them

Nick Iwanyshyn/The Canadian Press file photo

Dec. 4, 2025 – This op-ed was originally published in the Toronto Star. You can find the link here.

By Meg Gingrich and Guio Jacinto, Contributors

Meg Gingrich is assistant to the national director at USW. Guio Jacinto is the economic and trade policy analyst at the USW Research Department

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The news that Algoma Steel is laying off 1,000 workers is a tragedy. While the company attributes these losses to changes forced by U.S. trade policy, Algoma’s crisis is the latest symptom of a much broader failure. Canada has allowed its steel industry, once capable of supplying its own market, to become dependent on U.S. demand, deindustrialized and exposed.

For four decades, federal governments of all political stripes embraced laissez-faire trade and industrial policy. Canada surrendered economic sovereignty, allowed imports to dominate its domestic market, and permitted foreign multinationals to buy, idle and restructure key steel assets to serve U.S. needs rather than Canada’s.

The consequences are stark: millions of tonnes of crude steel capacity have disappeared, along with basic product capabilities such as structural steel and rail products. Today, some of the most essential inputs for Canadian infrastructure can only be sourced offshore.

The numbers tell the story. In the pre-free trade year of 1984, 21 per cent of Canadian steel production was exported while imports captured just 16 per cent of the market. By 2024, more than half of Canadian steel production was exported, nearly entirely to the United States, while close to 60 per cent of the steel consumed in Canada was imported. When the U.S. reimposed Section 232 tariffs this year, Canada’s export-dependent model collapsed, and Canadian steelworkers were caught under the rusted steel rubble.

This was not inevitable. It was a policy choice. And it is a choice that we cannot repeat.

The federal government now faces a clear task: rebuild the foundations of a sovereign Canadian steel industry. That requires concerted action along three fronts.

First, repatriate the domestic market.

The federal government’s recent announcement to tighten import quotas to 75 per cent for free trade partners and 20 per cent for non-free trade partners at 2024 import levels, and the removal of the U.S. remission program are meaningful steps. But they still leave Canada’s market too exposed. Canada needs an import quota system that applies to all partners, including the US and Mexico, which progressively tightens over time and is geared toward substituting imports. In this way, Canadian producers’ can recapture market share as capacity is rebuilt.

Second, invest in capacity and capability.

Canada must aim not only to replace imports in categories it currently produces, but also to rebuild capacity in products it no longer makes. The $1-billion provided in the Strategic Response Fund is intended to incentivize private investment in new product capabilities, yet given the general uncertainty, unsurprisingly thus far no firm has stepped up to the plate. If private firms will not take the risk to reverse decades of restructuring geared toward U.S. demand, then public, entrepreneurial investment must lead. Governments have done this before, through public steel enterprises such as IPSCO, SIDBEC, and SYSCO. It can, and if necessary, must do so again.

Third, shift toward domestic ownership.

The Canadian steel industry was once characterized by high levels of domestic ownership, and served as a strong counterpoint to the American owned character of the Canadian manufacturing sector. Today, nearly 80 per cent of Canadian primary steelmaking capacity is foreign-owned. In difficult times, Canadian facilities are targets to be idled or restructured — as the history of US Steel in Canada demonstrated. Rebalancing ownership is essential if Canada expects investment decisions to better reflect national priorities rather than the interests of distant board rooms, or erratic foreign governments.

Algoma’s layoffs are a tragedy for steelworker families and the Sault Ste. Marie community. But they also present a pivotal opportunity. Sault Ste. Marie has the skilled workforce, resources, and industrial heritage needed to anchor a sovereign steel sector.

Algoma was one of the country’s largest producers of structural steel and rail. Now it is time to invest in the company, and with federal direction, it could become a national champion and a cornerstone of our nation-building projects.

The federal government has shown it recognizes the importance of the domestic steel industry to Canada’s sovereignty, and it has shown it can take decisive steps to protect Canadian steelworkers. Now it must go further and catalyze productive investment which enhances our resilience. Rebuilding the industry on a sovereign basis must begin today, starting with Algoma.

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