Algoma Steel grabs taxpayer dollars while screwing their workers

Privately-owned profits, with public-covered losses.

In a photo taken July 1997, Algoma Steel works to produce their titular product. While NAFTA did cause difficulties for manufacturing industries, it turns out having America not buy our steel is even worse for the Soo. | Copyright © David Wilson, licensed under CC BY 2.0

Back on September 29^th a couple of months ago, the Federal and Ontario governments announced they were providing $500 million in financing—$400 million federal, $100 million provincial—to Algoma Steel, known for being the primary economic engine of Sault Ste. Marie and facing difficulty due to Trump’s massive tariffs on foreign steel imports into America.

At the time, the Carney Liberals boasted that this loan of taxpayer dollars to a private corporation would protect jobs. Yet just this Monday, Algoma Steel confirmed it would be slashing roughly a thousand jobs, out of a work force of about ~2,700 people. Firing over a third of your workers is not “protecting their jobs”, not by any reasonable measure.

The natural question to ask both levels of government involved would be whether they had foreknowledge of these massive job losses when they loaned taxpayer dollars to these companies? Did they choose to grab back wages from workers at Algoma Steel through taxes, and return the money to the same company firing them before Christmas?

Disgusting. Perhaps we should call these thieves Algoma Steal.

Firstly, the CEO of Algoma Steel was very transparent in interviews this week that both the Federal and Ontario governments knew of their business plan, including layoffs. And to be fair, the plant has been planning a technology transition from the current blast furnaces to modern electric arc furnaces that all levels of government are already well familiar with.

The numbers provided say that the blast furnaces take 3,000 workers to produce 2 million tonnes of steel, versus just 1,600 workers to produce 3.2 million tonnes using the newer arc furnaces. Algoma Steel is using the tariffs as justification to say that this transition plan, which was intended for 2027, needs to be accelerated to early 2026 for the financial survival of the business.

I actually have no problem with switching from blast to electric arc, especially considering the improved productivity benefits. My problem is that we are presented with a false dichotomy. If just 1,600 workers can produce 1.2 million more tons than 3,000 workers on the old furnaces, then how much steel could 3,000 workers make on the new electric arc furnaces?

Yes, workers need to be retrained on the new equipment, but overall Algoma Steel has been planning to lay off workers despite the fact that they could be selling significantly more volume, and thus making more money, by retaining their workforce. And with an increase in Canadian infrastructure projects that are demanding domestically-produced steel, Algoma would certainly have a market for that additional capacity.

Nonetheless, neither the Federal nor Ontario government made this a sticking point in their loan of taxpayer dollars to Algoma Steel. United Steelworkers has made emphatically clear that their union was not involved by either Prime Minister Carney nor Premier Ford, and that their requests for the loan to be conditional on not laying off their workers were denied.

They have also noted that the CEO of Algoma Steel, who is outgoing, has a compensation package which is undisclosed to the public or the union. As such, even if Algoma Steel goes bankrupt after he leaves and is unable to pay back the loan to the Canadian public, he will still make off with a good chunk of the money as a private citizen.

And that taxpayer money was, in part, collected from Algoma steelworkers themselves. They earned that money through their hard work and labour, and the government has grabbed it back and given it to the company that is now laying them off right before Christmas.

Doug Ford and Mark Carney have both confirmed their foreknowledge, while also making clear they don’t believe they did anything wrong in giving an unconditional loan of taxpayer dollars, while blatantly lying to those same taxpayers about “protecting jobs”.

Ultimately, this is the truth of Liberal-Conservative capitalism in Canada. When a private business makes money, they lower taxes and ensure that even more profits stay in the hands of the billionaires. But when a private business loses money, suddenly these “free marketeers” throw hundreds of millions of taxpayer dollars to cover those losses, without getting anything for the public in return.

I am fucking done with politicians stealing my money, just to make rich pigs even richer than they are now. I’m pretty sure steelworkers victimized by Algoma Steal are done too. But as long as Carney and Ford hold their offices?

Main Street will only get poorer, and Bay Street will only get richer.