It’s hard not to be sympathetic to Sault Ste. Marie mayor Matthew Shoemaker. Reacting to the news that Algoma Steel plans to lay off something like 40 per cent of its workers, the mayor says it’s an obvious consequence both of American steel tariffs (distinct and separate from the general global tariffs the president levied, but both of which include Canadian goods) and illustrates the need to get some kind of deal with the United States. He’s undoubtedly correct about the diagnosis, but as for the prescription: what deal, exactly, is available? The Americans have made it quite clear that there’s no zero-tariff future they’re interested in.
I don’t envy the mayor getting bad news about his city’s largest private employer (and the knock-on effects that are likely to come in the future) but it’s not remotely obvious what deal is on the table for Canada to accept, and even less clear that the current administration would actually be held to any deal they sign. They have, as a reminder, breached the successor agreement to NAFTA that this same president negotiated.
We can reserve some sympathy for Algoma Steel and particularly its workers, too. This week’s bad news is just the latest in a series of crises going back more than a decade. It’s a large employer in a politically sensitive riding; I’ve watched governments of all levels and partisan affiliations announce assistance packages for the mill that has operated under several different owners this century. The most recent package was $500 million from the federal and provincial governments to keep the operation afloat (both governments acknowledge they knew layoffs were coming before they handed over public money). The relative good news in all this is that Algoma is pushing forward its transition to electric arc furnace technology, powered by Ontario’s relatively clean electricity grid instead of traditional, more carbon dioxide-intensive ways of making steel. The shift might make Algoma more competitive and sustainable for future markets.
The bad news is that Algoma says the jobs being lost next March won’t be coming back in the foreseeable future, and this, too, is an old story. At the start of the 21st century, Algoma Steel employed 15,000 people in Sault Ste. Marie. After a series of bailouts and restructurings, by next year that number will be less than 2,000. To put it another way, despite some pretty massive interventions on the part of governments to protect steel jobs in a northern Ontario city, we’re already 85 per cent of the way towards a world where none of Algoma Steel’s jobs exist, relative to a quarter-century ago.
Which isn’t to say that we should simply let Algoma Steel fail, even if that were within the realm of the politically plausible (it’s not). So while I generally don’t spend a lot of sympathy on premiers and prime ministers (unlike mayors, they have vastly more freedom of action when confronted with bad news) it’s not like Ford or Carney have done anything obviously wrong here: confronted with an irrational, antagonistic government in Washington D.C. that wants to hurt us for the sake of hurting us, they’re trying to save what they can.
The problem for Ford and Carney is that Algoma Steel is neither the first nor the last major employer that’s been shellacked by U.S. tariffs. We’ve already seen Ontario scramble to do damage control when Stellantis announced layoffs earlier this fall, and the premier’s performative feud with distiller Diageo looks like it will in fact see brands removed from the LCBO, as the company has reached a deal with the union representing workers in Amherstburg. There at least the mayor (former MPP Michael Prue, because Ontario politics is a small world) says other firms are interested in the soon-to-be-former-Diageo plant, so some jobs will be preserved in the community. Whether it’s the same number, for the same pay, and whether any new employer is offered sweeteners from some level of government, all remain to be seen.
Policymakers are still scrambling, is the point. It’s been nearly a year of Trump II and our political class was seemingly caught entirely unaware that the guy who ran and won on repeated, loud promises to tariff everything under the sun meant us too. Our options in December are more or less the same as they were in January: accept a meaningfully worse standard of living in exchange for some kind of settlement that the current president won’t even be held to, or try and build an economy that isn’t so vulnerable to periodic bouts of madness on the part of voters in a half-dozen swing states.
The former is politically unpalatable; the latter is going to be far more difficult (and costly) than our leaders seem ready to accept. The current policy is like trying to bail out a leaky boat without having a realistic plan to either patch the hole or get back to shore. It’s possible to keep that up for a while, but it’s not what anyone would call sustainable — and you’re incredibly vulnerable to something else going wrong.
Maybe things go our way. Maybe the Supreme Court strikes down Trump’s tariffs and the increasingly-unpopular president turns out to lack support in Congress to legalize his vandalism of the global economy — and if we’re really, truly fortunate, maybe a Republican defeat in next year’s mid-term elections causes the White House to discover reason in the renegotiation of the USCMA that also starts next year.
But hope isn’t a plan, this boat we’re all in is looking awfully leaky, and I can’t see land anywhere.
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