The Current - The view from the Sault on steel and tariffs

Episode Date: October 22, 2025

Last month, the federal government loaned Algoma Steel $400 million, and Ontario kicked in $100 million -- to help the company weather the tariff storm. Still, a news release from the company earlier this month predicted big losses and signaled possible layoffs.  For a city intertwined with Algoma, buffeted by a trade war, and reimagining its relationship with its close neighbour, it's a nervous time.

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Donate at lovescarbro.cairbo. This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. The border city of Sioux-Saint-Marie in northern Ontario sits on a river that connects Lake Huron and Lake Superior. It faces its twin city of the same name across that river in Michigan. And at this time of the year, it's famous for its fall colors. It's also famously the home of Algoma Steel. This country's only independent, Canadian-owned steel producer.

Algoma is a huge economic driver for the Sioux. it's the city's largest employer, it's being hammered by 50% tariffs from the United States. Michael Garcia is the CEO of Algoma. For 125 years, Algoma Steel has been making steel here on the banks of the St. Mary's River less than a mile away from the U.S. and shipping 50 to 60% of that steel into the U.S. But that's not the future that we are looking and faced with. Last month, the federal government loaned Algoma Steel $400 million. The province of Ontario kicked in another $100 million.

to help the company weather the tariff storm. Still, a news release from the company earlier this month predicted big losses and signaled possible layoffs. And so for a city intertwined with Algoma, buffeted by a trade war and reimagining its relationship with its close neighbor, it is a very nervous time. In a moment, we'll speak with a member of the union, the local United Steelworkers Union, as well as the town's Chamber of Commerce. But first, I'm joined by the mayor of Sue St. Marie, Matthew Shoemaker.

Mayor Schumacher, good morning. Good morning. paint us a picture of how much your local economy relies on Algoma Steel. Oh, well, it's enormous. I mean, we've got roughly 50% of the economy that relies directly or indirectly. So there's about 2,800 jobs in the Sioux that are employed directly by Algoma Steel. Roughly, 40 to 50% of the economy is suppliers, contractors, restaurateurs, grocery stores that rely on the wages from Algoma Steel employees.

And then about, you know, 45 to 50% of the folks in town, kind of globally from children to senior citizens, are not active in the workforce. And a large number of those folks are pensioners from Algoma Steele. So it really makes the economy here tick when it's doing well and it really makes it suffer when it's not doing well. So let's talk about the suffering. Donald Trump initially imposed 25.

35% tariffs on steel, then up to 50% in June, what is that meant for the local economy and the residents, I mean, the people that you just described who rely on that industry. Yeah, it's been a lot of anxiety in town for sure. I mean, the 25%, you know, I don't know if we were expecting it, but I don't think anyone was surprised by it, given what happened in 2017, 18, when he was last president. But the 50% came as a complete shock. seemingly came out of nowhere as well. And at a time when we were, you know, looking forward to,

and I think under the belief that there would be a quick tariff deal following the federal election, that hasn't come to pass, although there are rumors that may come to pass soon. So lots of a big slowdown, I would say, in the economy, which had been doing very well. Well, Algoma had been having some very good years up until the tariffs. came in. And so to your point, I mean, it's not just folks who are working directly with the plant, it's also the barbershops and the restaurants and the car detailing place and the hockey leagues where kids are in and the parents put their money. All of that would have suffered if those tariffs are in place, right? It all suffers. Yeah, it absolutely has an

enormous impact on the whole economy top to bottom. You know, and I'm the mayor, but I also work as a lawyer in town, the legal industry suffers, the professional services, the accounting industry suffers, the retail shops suffer, the, you know, the grocery stores, as I mentioned previously suffer. There's no industry that isn't impacted by Algoma's well-being. So the Globe and Mail has been reporting that there could be a trade deal with the United States at the Asia-Pacific Economic Cooperation Summit later on this month. The prime minister has cautioned, you know, don't overplay those reports.

you've hinted at the rumors as well what would you want from that deal well i mean in an ideal world i'd like to see the tariffs on steel eliminated in exchange for whatever it is that they can negotiate right we perhaps don't live in an ideal world though so so realistically what would you want realistically given that our dollar is lower than the american dollar i think that there would be an american market at you know a 10 or 15 percent tariff any any higher than that you're getting into you know the the questionable viability of the american market and and and really we need the American market. We were established kind of geographically because of cheap power back in the day,

hydroelectric power in the 1890s was the cheapest way to make steel or to generate power to make steel. And then, you know, our market has developed in such a way that it makes geographic sense to ship down through Michigan into Chicago and Ohio and Pennsylvania. And so that's where the majority of our coil goes. And so if there isn't a deal, does that market become, it's no longer viable, you believe? if there are tariffs beyond 10, 15%, for example? I think it makes it a lot more appealing

for those American companies to search out coil makers in the U.S. What that means for Algoma is that it's got to focus more on plate manufacturing and shipping. We're one of the only plate makers in Canada. So there is demand for plate in Canada. It's just that hasn't been Algoma's primary focus

for so long that it's going to take them some time to build up that customer list. Algoma recently got half a billion dollars, as I mentioned in government loans. And you said recently that you felt as if the Sioux was swimming in shark-infested waters, and that that loan offer was, you know, some sort of life-fest, but presumably the sharks are still in the water, right? The sharks are still in the water, absolutely. And so we're, you know, not, we're not out of the water. There's still the danger there.

I think the next couple of risks are, one, they've got to be able to find that market for Canadian Plate, and they're actively working on that. And, you know, I know the Chamber works closely with them, the city works closely with them to make sure that whatever we can do to support those efforts, including encouraging the federal and provincial governments to procure Canadian Plate in whatever nation-building projects they're doing, is a critical next step. But, I mean, that takes time. You're not going to flip your order book around in a day.

The other, you know, threat, and it's more of a community threat than a company threat is that it is going to speed up what was already going to be a difficult transition from coal-based steelmaking to electric-based steelmaking. And what I mean by that is because they are getting rid of the coal-based process in which they've made steel for 125 years, it's going to mean a smaller workforce. So there's going to be a lot of folks in town looking for jobs. and if the economy isn't strong because of the tariffs, the jobs might not be there. We're going to talk more about that in just a moment with a representative from the union.

I'm out of time, but let me ask you two very quick things. One is, we've talked about this before. The Sioux is so closely integrated with the United States, right? Like, it's hard to imagine those two towns not working so closely together. What is this done to that relationship? It's really hurt the person-to-person relationship in town. I mean, border crossings are way down. They rely on our retail shoppers to go across and shop, and that relationship has suffered.

We like to pitch ourselves as one nation or one city across two nations, and I think there's a bit of a sense that that time may be beyond, maybe past us. If those jobs, 50% of the workforce broadly is tied to the steel industry, is there a future for the Sioux or how do you see the future? the Sioux, if this industry is taking the blows that it is. Yeah, well, that's the job of, you know, everybody in town to be rowing in the same direction on. I mean, we're looking at developing a port to try and offset some of those job losses. We're looking at bringing more Ontario Lottery and gaming jobs here, which is their headquarters, but not all the jobs are here. So we're looking at doing multiple things to try and offset a couple hundred here and a couple hundred there to try and absorb that. You know, we're not sure the exact final number,

depending on retirements, but several hundred jobs for sure. Wish you the best of luck, and it's good to talk to you again, Matthew Schumacher. Thank you. Matthew Schumacher is the mayor of Sue St. Marie, Ontario. This ascent isn't for everyone. You need grit to climb this high this often. You've got to be an underdog that always over delivers. You've got to be 6,500 hospital staff, 1,000 doctors all doing so much with so little.

You've got to be Scarborough Defined by our uphill battle And always striving towards new heights And you can help us keep climbing Donate at lovescarbro.cairbo.cairot C.A. Norval Morso is one of the most famous indigenous artists ever. Looking at his paintings, it's easy to see why.

Colors are intense. Color as medicine. But look a little closer and you'll see something else. Fakes. We believe it's a world's biggest art fraud. There are thousands of fake Norval-Moroso paintings beneath some of these forgeries, assaults, abuse, and even an unsolved murder. I want my paint back. I know you killed that boy. Forged. Available now wherever you get your podcasts.

Bill Slater is president of the United Steel Workers Local 2724 in St. Marie. They represent salaried workers at Algoma Steel. Bill, good morning to you. Good morning, ma. There have been layoffs already at Algoma, and the company is signaling that more could be coming. How would you characterize the mood of your members? You know, anxiety, scared, trying to figure out their future. What are they worried the most about? Putting food on their tables.

There's going to be a lot of job losses, and there's not a lot of job losses. and there's not a lot of other industry that's hiring at the time in Sioux-Saint-Maris. So, I mean, you have to figure out how you're going to feed your family, how you're going to pay your mortgage. You know, the steel plant has provided a lot of good jobs for a lot of people over the years, but that keeps dwindling down and it's being less and less. As we mentioned, two levels of government floated algalienable. of steel, about half a billion dollars to whether the turmoil that the country and the company is going through.

What is that going to mean, do you think, for your workers? Well, that money will hopefully keep the steel plant alive while it positions into other markets, but unfortunately, it's not, it's not going to protect the jobs that are there today with the market and with the, as Matthew said, the coil market is pretty much gone away from us. So we have to transition to other products. And that means transitioning to the EAF furnace, the electric arc furnace a lot quicker than originally planned. So people that were thinking that they would be working until, you know, 2029, 2030 at Algoma Steel. Now it looks like that transition is happening in 2026. So they're trying to figure out how to change things around

so that they can still feed their families. Can you tell me a bit more about that transition? And Matthew hinted at that. Al Goma says that it's going to be moving, using some of that money to move to electric arc furnaces away from coal. That's greener, obviously. But the point that Matthew made and that you've made is that this relies on fewer workers. Do you have a sense as to how many fewer workers will be required? Originally, we were told that we would probably be downsizing by a thousand workers. That was just looking forward into normal transition into the EAF world. That didn't include all the problems that come along with the tariffs and the trade deals

with the U.S. that are killing us right now. And that's a thousand workers out of, Algoma employs, what, 2,600 people in the Sioux? Is that right? Yeah, I think the last number was maybe around 26, 2,700. It's... That's a huge cut. It is.

Is there anything you can do about that? I mean, one of the things that the CEO of Algoma has said is that they have to make this move. I mean, not just environmentally, but he says this is about solutions, not survival. What do you say to that? Well, I think the government came in and, you know, gave the company money to transition to the electric arc, and the government did not hold the company accountable for maintaining jobs when they gave them that money. That is taxpayer money. So we feel strongly that it should be tied to jobs. And this would have had the company

looking at value-added blinds or other things way before the tariffs hit us, which might have been able to put us in a better position. Right now, we're down, to two products we sell and one of the products is very hard to sell without losing money on it right now. These are good paying jobs, as you said. Where will people go to find work if a thousand people out of 26 or 2,700 find themselves out of a job? Unfortunately for our community, it's going to be outside of our community, whether it's

the mining industry, I think, is starting to pick up in northern Ontario. So that's possibilities. those jobs are outside of our community. So it's scary what it's going to do to our community. Do you worry, just before I let you go, do you worry about the future of the Sioux? I do. I have three married children that live in Sioux St. Marie and seven grandchildren. And, you know, I quite enjoy my life, having them close to me and spending time with them.

So I do really worry about how that's going to affect their opportunities to maintain their families within the workforce that's about to happen. Bill, good to talk to you. Thank you very much. Thank you. Bill Slater, President of United Steel Workers Local 2724 in Sioux-St. Marie represents the salaried workers at Algoma Steel. Jason Naccarado is president of the Sioux-St. Marie Chamber of Commerce. Jason, good morning to you. Good morning. Can I start with the question that I've been asking Bill and Matthew? How worried are you about the future of your city? Well, we are very concerned. You know, there's a lot of angst, a lot of anxiety, and, you know, people in town are very concerned, and that affects how much discretionary spending they have. It affects business owners making decisions.

I mean, you need certainty around the flow of capital, and when there is none, it just, everything freezes up. What specifically have you heard from local business owners about, to your point, a reduction in discretionary spending, the sense that people don't know whether their jobs. are going to be around, and maybe they keep a bit of the money that they have in their pocket rather than spending it in the community. What have you heard specifically from people? Yeah, well, we're hearing, obviously, concerns about, you know, similar to what Bill and the mayor were saying, the coil business really suffering and really not getting a fair shake.

We also hear, you know, concerns around the renegotiations of Kuzma and what that's going to affect and what long-term effects that'll have. So with all this uncertainty, it's hard for business owners to predict, I think, our friends south of the border are very unpredictable at this point in time. So when you don't know what's happening, it's hard to make decisions such as buying a new piece of equipment, expand your business, move into a new building, leave the building you're in. Things like that are very, very concerning, especially when you're seeing your revenues fall. What do they do in that uncertainty? Well, I think our steel industry is a great company. Logo Steel is a great company that creates a great product and sells it at a very reasonable price,

and that's always a formulation for a good business. But it needs a fair operating environment. It needs a safe operating environment, and that's something it doesn't have right now. So we really do depend on our different levels of government to create that environment for the steel. industry and for Algoma Steel to be able to operate and get an honest shake at being successful. So, you know, we applaud the recent loan that the Algoma Steel received. We think that extends their runway. But in all reality, what we really need is the government to create a better operating environment for the company to be successful. And with the operating environment that they're

in right now, that's very, very challenging. So we do call on governments to really look at this scenario and to create a more fair environment for them to them to operate. What does that mean, a fair environment? I mean, part of this is out of your control. To your point, as you said, your friend south of the border is somewhat unpredictable. So what can the Canadian government do? Well, for us, it's quite simple. Right now, we're still operating as Canadians in a free trade environment.

It's not free trade, shipping steel to the U.S. It's not free trade, shipping steel to Europe. There's tariffs and taxes and barriers. steel getting into Europe and are steel getting into the U.S. And primarily concern is the U.S. In Canada, that steel can come in barrier-free, tax-free from the U.S. That creates an unfair environment for us and for our steel industry. We only have 30% of the domestic steel market from Algoma and the other Canadian producers.

There is an opportunity for Algoma Steel to grow in the domestic market, but they're competing against jurisdictions such as the U.S. shipping steel into our country with no tariff. No tax. So the U.S. has put the walls up to protect their internal domestic steel sector. Same as you. Canada should do the same if they cannot negotiate the tariffs away. You know, our prime minister loves his hockey analogies. It's like since these tariffs have come in place, Algoma Steel has been playing shorthanded for months and months and months. And we're waiting for our government to either put the walls up for Canada or get rid of the tariffs.

So only our government can take our fifth man out of the box right now. In the meantime, Yeah, and the even strength metaphor, I think, holds. I have to let you go, but just in the meantime, people in town, I mean, there's a whole buy local, shop local, you know, drink local beer instead of budd lights. Do you find people banding together to try to help each other out? Yeah, absolutely. It's been Canada proud and shop local and shop Canadian through and through. That's got to be hard, given how close the relationship is with your friends right on the other side of the border.

Yeah, yeah, absolutely. But I think, you know, they understand. we understand that the two nations are much stronger when we work together instead of trying to compete with one another. Jason, good to talk to you about this. Thanks so much. Thank you. Jason Nakarado is president of the Chamber of Commerce

in Sioux-Saint-Marie, Ontario. You've been listening to the current podcast. My name is Matt Galloway. Thanks for listening. I'll talk to you soon. For more CBC podcasts, go to cbc.ca.