Algoma Steel Layoffs in Canada: Employee Rights, Severance Pay, and What You Need to Know

On December 1, 2025, Algoma Steel confirmed that it will lay off approximately 1,000 employees effective March 23, 2026, as it permanently shuts down its blast furnace and coke-making operations and accelerates its transition to Electric Arc Furnace (EAF) steelmaking (CBC News). According to Algoma, unprecedented US tariffs have severely restricted access to its most important export market and “fundamentally altered” the company’s competitive position, forcing the transition to happen one year earlier than originally planned (CTV News).

What Algoma Steel Has Confirmed

• 1,000 layoffs effective March 23, 2026
• Closure of the blast furnace and coke-making facilities
• Early shift to EAF steelmaking
• 900 layoffs within United Steelworkers Local 2251
• 150 layoffs affecting salaried employees in Local 2724
• US tariffs have “sharply limited our ability to access the US market”
• Transition supported by $500 million in federal–provincial loan assistance

What Algoma Leadership is Saying

Laura Devoni, Algoma Steel’s Vice-President of Human Resources and Corporate Affairs, confirmed that the company has been “significantly impacted” by US tariffs and that the blast furnace closure is necessary for long-term viability. She described the restructuring as driven by “extraordinary and external market forces,” acknowledging how “unsettling this news is for our employees, their families, and the broader Sault Ste. Marie community.”

Union Reactions

Union leaders say the layoffs were expected during the EAF transition but have accelerated and intensified by US trade actions (SooToday).

• Bill Slater (Local 2724) said the workforce knew changes were coming but “Trump’s tariffs accelerated the job losses,” adding that the transition would normally have been at least one year away. He also confirmed the layoffs will last at least 35 weeks before employees can elect severance.
• Mike De Prat (Local 2251) confirmed 900 union members received notices and noted that although mitigation strategies were in place, “No doubt there is the Trump effect.” He also expressed concern about whether northern Ontario has enough jobs to absorb the scale of displacement.

Who Algoma Steel May Lay Off in Canada

While Algoma’s workforce is heavily unionized, its restructuring affects both hourly and salaried employees. Although unionized workers must rely on their union for representation, non-unionized employees affected by similar restructuring are entitled to full severance protections under Canadian law.

Know Your Rights When Algoma Steel Lays You Off

For non-unionized workers, a layoff, job elimination, or restructuring at Algoma Steel is typically considered a termination without cause.

This means the company must provide:

• Full severance pay under common law, not just minimums under employment standards legislation
• Notice or pay in lieu of notice
• All components of compensation, which may include:
  • Salary
  • Benefits
  • Bonuses or incentive pay
  • Pension/RRSP contributions
  • Vacation pay
  • Any other earned compensation

Severance Packages for Algoma Steel Employees

Your severance entitlement is calculated based on:

• Length of service
• Age
• Role, position, and level of responsibility
• Availability of comparable jobs in your field

Under Canadian common law, non-unionized employees can receive up to 24 months of severance pay.

Employers often present “standard packages” that:

• Include only ESA minimums
• Omit bonus or incentive pay
• Provide insufficient notice
• Include unclear calculation
• Create pressure through short signing deadlines

Do not assume the initial offer reflects your full legal entitlement.

Potential Issues With Algoma Steel Layoff Notices

Common issues that arise in large restructuring events include:

• Incorrect severance calculations
• Insufficient notice periods
• Misuse of “temporary layoff” language without contractual authority
• Missing or unclear treatment of benefits, bonuses, or pensions
• Short, pressured deadlines to sign
• Ambiguous breakdowns of how the severance was determined

Any of these may indicate your package is below your full entitlement.

Common Red Flags in Algoma Steel Severance Offers

Be cautious if your offer:

• Provides only a few weeks or months of pay despite long service
• Fails to continue benefits for a reasonable period
• Leaves bonuses or incentive pay out of the calculation
• Is labelled as “restructuring” but ends your employment permanently
• Gives a 24–72-hour deadline
• Provides no explanation of how severance was calculated

Wrongful Dismissal and Algoma Steel Layoffs

A wrongful dismissal occurs when an employer fails to provide the full severance required by law.

You may have a claim if:

• Your severance is much lower than what courts typically award
• Your employment contract’s termination clause is unenforceable
• Your employer pressures you into signing quickly
• Your employer terminates you during maternity, parental, disability, or medical leave
• Your termination is called a “temporary layoff” with no realistic recall
• Bonuses, benefits, or other compensation are excluded from the package

Even during mass layoffs, every employee’s entitlement must be calculated individually.

What to Do After Algoma Steel Lays You Off

If you received a layoff or severance package:

1. Do not sign anything immediately. You may waive your rights.
2. Gather documents:
   • Employment agreements
   • Compensation plans
   • Pension/RRSP contribution records
   • Pay stubs and T4s
3. Use the Severance Pay Calculator to get a quick estimate of what you may be owed under Canadian law.
4. Document your role, responsibilities, and work history.
5. Speak with an employment lawyer before signing any offer.

Frequently Asked Questions About Algoma Steel Layoffs

How much severance can Algoma Steel employees receive?

Up to 24 months, depending on age, role, and length of service.

Are Algoma Steel layoffs temporary or permanent?

For non-unionized employees, restructuring is generally treated as a permanent termination, requiring full severance.

Does Algoma have to include bonuses or benefits in severance?

Often yes — they are part of total compensation under common law.

What if I’m laid off while on parental or medical leave?

You may have both a wrongful dismissal and human rights claim.

Do I need a lawyer even if the package seems fair?

Yes. Many packages are significantly below common law entitlement.

How Samfiru Tumarkin LLP Can Help With Algoma Steel Layoffs

If Algoma Steel has laid you off — or if you are concerned about your rights during the company’s ongoing transition — speak with an employment lawyer before signing anything.

Samfiru Tumarkin LLP has helped over 50,000 Canadians secure the compensation they’re owed and has earned more than 3,000 five-star reviews nationwide.

Disclaimer: The materials above are provided as general information about the rights of non-unionized employees in Canada. It is not specific to any one company and should not be read as suggesting any improper conduct on the part of any specific employer, or a relationship between Samfiru Tumarkin LLP and a specific employer.