Job and Families Minister Patty Hajdu is defending the federal government’s decision to provide Algoma Steel with nearly half a billion dollars in loans, despite knowing the company would be issuing layoff notices.
“At the end of the day, we have to save this sector, and I think we went into this eyes wide open, knowing there was going to be disruption, but also determined that we would have a sovereign Canadian steel sector,” Hajdu said in an interview with CTV Question Period airing Sunday.
“That’s why the loan, so that the company would have the breathing room and the time to be able to pivot to new product and new market.”
The federal government has received criticism this week after Algoma Steel CEO Michael Garcia revealed on CTV’s Power Play on Tuesday that both Ottawa and the Ontario government knew the company’s business plan included a re-tooling of its Sault Ste. Marie plant that would result in layoffs.
Garcia also said he had been “very open” with both the government and his employees about the direction of the company moving forward.
Algoma, which is Canada’s last remaining independent steel producer, issued layoff notices to about 1,000 workers last week effective in March. The company employs 2,700 people in northern Ontario.
But the layoffs come less than a month after the company said it had completed $500 million in financing agreements with the federal government and Government of Ontario, which had provided loans of $400 million and $100 million, respectively in the face of U.S. President Donald Trump’s 50 per cent tariff on steel imports.
Since 2021, the steel producer has been transitioning to Electric Arc Furnace (EAF) steelmaking, which the company describes as more cost-effective, more flexible, and less labour-intensive. It also means a shutdown of its current blast furnace and coke oven operations.
Garcia said the company’s transition was originally slated for early or late 2027, but the impact of Trump’s tariffs accelerated their timeline.
Asked by host Vassy Kapelos why Canadians are learning about Algoma Steel’s business plan and layoffs from the company and not the government, Hajdu insisted there has been “full transparency” about the concern for the steel industry.
“This is about saving the furniture in the steel industry. This is about making sure that we have a steel mill in the next three months, six months, a year, two years,” Hajdu later added.
“And this is about making sure that our Canadian companies are well positioned to be able to find new markets and create new products. That’s the purpose behind these loans.”
Pressed on whether the federal government will push for job guarantees in future loans – as U.S. tariffs continue to impact various sectors – Hajdu wouldn’t answer directly. But she did point to other measures like the extension of temporary employment insurance (EI) measures introduced earlier this year to support workers affected by tariffs.
“Early on in the summer, when we saw this kind of potentiality of job loss, wide job loss whether it was (the) auto sector or steel or aluminum or forestry, we immediately worked to make sure that there were protections for layoffs,” Hajdu said.
The jobs minister also wouldn’t say whether the federal government is prepared to give Algoma Streel more money if there are more job cuts in the future, saying those conversations need to happen “one at a time.”
“Algoma Steel has taken out a loan. They have said that they’ll be able to use that money to pivot to new product and to new processes that will allow them to reach new markets and new customers,” Hajdu said, later adding that there needs to be “some evidence of that.”
According to the federal government, 90 per cent of Canada’s steel exports went to the U.S. in 2024, making the sector highly vulnerable to American tariffs.
Last month, Prime Minister Mark Carney announced new measures to help the steel industry, including a further limiting foreign steel imports from countries without a free trade agreement with Canada — from 50 to 20 per cent of 2024 levels — and reducing quotas for countries with which Canada has a free trade agreement – excluding the U.S. and Mexico – going from 100 per cent to 75 per cent of 2024 levels.
You can watch Jobs and Families Minister Patty Hajdu’s full interview on CTV Question Period Sunday at 11 a.m. ET.
With files from CTV News’ Samantha Pope
