Monday was a good-news kind of day at Algoma Steel.
Today's news was not so good.
On the heels of Monday's announcement of a half-billion dollars in federal and provincial loans, the company predicted tonight that it will suffer an adjusted loss before deductions (EBITDA) between $80 million and $90 million in its third quarter, which ended yesterday.
Steel shipments for the quarter are expected to be around 415,000 to 420,000 net tons, the company said.
That compares to EBITDA of $3.5 million and shipments of 520,443 net tons during the same period last year.
Michael Garcia, chief executive officer of the Sault steelmaker, was nonetheless projecting confidence tonight.
“Despite ongoing trade headwinds, we achieved first arc and first steel from our electric arc furnace (EAF) in July, marking a critical milestone in our transformation to low-carbon steelmaking," Garcia said in a news release.
"With enhanced financial flexibility from federal and provincial support, we are prioritizing Canadian market demand with a focused plate and coil product mix. We remain confident in our strategy and long-term value creation potential for shareholders," Garcia said.
A news release issued by Algoma on Monday was less rosy on those points.
"The continuation of Section 232 tariffs has effectively closed the U.S. market to Canadian steel, undermining Algoma’s cross-border business model and requiring the company to focus on products with reliable domestic demand.
"The tariffs have made continued operation of the company’s blast furnace and coke ovens unsustainable. Accordingly, Algoma will begin to exit these primary operations as it accelerates its transition to electric arc furnace (EAF) steelmaking.
"The company now expects that the final aggregate cost of completion of the EAF project will be approximately C$987 million. Going forward, Algoma intends to focus production on as-rolled and heat-treated plate, along with select coil products predominantly for the Canadian market," the Monday release said.
Algoma is now expected to close its blast furnace and other relics of traditional steelmaking sooner than originally planned, moving more quickly into EAF production.
That will mean layoffs, a prospect that's been worrying members of United Steelworkers Local 2251, the largest bargaining group at the Sault's steel mill.
"It doesn't solve every problem we face — but it allows us to focus on solutions instead of survival," Garcia said in a message sent to workers this week.
"I know the past nine months have been hard. The U.S. tariffs closed off our largest market, and that has had real consequences. Many of you have worried about your jobs, your families, and your future here at Algoma.
"With this support, we can focus on writing our next chapter together. For that, I am extremely grateful.
"What does the future look like? It will be different for everyone. Some roles will remain the same, others will shift, and in the near-term workloads will not be evenly spread at all times. That's the reality of where we are.
"What I can promise is that we will be direct with you, share information as soon as we can, and make every decision with the long-term health of Algoma and our community in mind," Garcia said.
The following is the full text of an email sent tonight by Local 2251 to its members:
Message to the members
The union is responding to requests of the members for information subsequent to the company’s town hall meeting held on Sept. 30, 2025.
We have all been aware regarding the controversial tariffs placed on Canadian products.
We were also aware that steel was one of the targeted products.
The actions by the company announced at the town hall meeting was the direct result of the tariffs.
The transition from the blast furnace technology to the EAF technology was commonly known to result in job reductions.
The first the union heard of the company’s plans was Monday morning in a meeting with the CEO and various politicians.
The union has been working all along to address mitigation strategies with potential reductions in work and potential layoffs.
Article 1.02 of the collective agreement clearly provides the work normally performed by employees within the bargaining unit shall be continued to be performed by employees in the bargaining unit.
It goes on to provide whenever practicable and especially during layoffs have such work performed by employees in the bargaining unit.
Article 1.02 was negotiated in 2004 and the union has processed a huge number of grievances to ensure the right to the work was preserved in case of layoffs.
In 2022, the union negotiated the letter of agreement titled Electric Arc Furnace Integration into Bargaining Unit.
The letter of agreement can be found on our website, www.usw2251.ca, under 'president's message.'
Your union has always worked proactively to protect our members jobs especially in the event of layoffs.
There have been a number of news releases that stated the transition to and EAF technology would result in large staffing reductions.
To that end, the company was to create and implement mitigation strategies.
The union repeatedly requested that the company act on the requirements of the collective agreement and the letter of agreement, to no avail.
The union also raised the issue in arbitration.
Today, the company is in a reactive mode with respect of training opportunities for our members to displace contractors.
The president has also been involved in discussions with Canadian Skills Training and Employment Coalition (CSTEC) and other government agencies to create and implement re-training opportunities for laid-off members.
We have also been in contact with Employment Insurance to be able to provide assistance for our members.
We urge all of you to inform your co-workers that they should provide us personal email addresses in order that we may keep them informed in an expeditious manner as situations develop.
In Solidarity,
Local 2251 Union Executive
In other news, Algoma Steel announced tonight that David Sgro has resigned as a company director for "personal reasons."
“It has been a privilege to serve on Algoma’s board during such a transformative period in the company’s history," Sgro said.
"I am proud to have played a role in supporting Algoma’s strategic vision and its journey to electric arc steelmaking. I want to thank my fellow directors, the executive leadership team, and all of Algoma’s employees for their dedication and partnership. I remain confident in Algoma’s future and wish the company continued success as it advances its growth and decarbonization initiatives,” Sgro said.