Canadian steel producers are pivoting toward local markets following a massive drop in American exports. This strategic shift comes as high U.S. tariffs and shifting trade policies force companies to rely on domestic infrastructure and energy projects.
The 60% plunge in U.S. shipments
The Canadian steel industry is undergoing a fundamental structural change as its traditional export routes to the United States face unprecedented barriers. according to the Canadian Steel Producers Association, shipments to the U.S. plummeted by 60% in 2025. this decline follows a decision by U.S. President Donald Trump to raise tariffs on imported steel from 25% to 50% in June 2025.
As reported by BNN Bloomberg, this loss of market access has forced a reconfiguration of where Canadian steel is consumed. While Canada once sent approximately 90% of its steel exports to the United States, the domestic share of steel used within Canada rose to 51% in 2025 , up from 41% the previous year.. This shift is being driven by a growing need for domestic materials in the mining, energy, and arttificial intelligence sectors.
Tenaris's C$306 million bet on Sault Ste. Marie
Large-scale industrial projects are providing a new foundation for demand, particularly in Western Canada and Ontario. Tenaris, a Luxembourg-based manufacturer of steel pipes for energy companies, has announced a C$306 million investment to expand production at its Sault Ste. Marie, Ontario,facility. This move is specifically designed to supply the Canadian oil and gas industry and reduce the company's exposure to American trade volatility.
Other domestic drivers include a 1.2-gigawatt data centre currently under construction in Saskatchewan and proposed Pacific Coast oil pipelines mentioned by Prime Minister Mark Carney. These projects are part of a broader effort to reduce Canada's economic dependence on the United States, though the transition has required significant government intervention, including C$1 billion in working-capital loans for the steel, aluminum , and copper sectors.
Algoma's 1,000 layoffs and the uneven recovery
Despite the rise in domestic demand, the industry's recovery has been marked by significant hardship for the workforce. Algoma, Canada's largest steel producer, announced in December that it would lay off 1,000 workers in Ontario. These job cuts represent nearly the entirety of the sector's national layoffs since the imposition of the U.S. tariffs.
The impact on employment is also being felt by Cleveland-Cliffs, which acquired Canada's Stelco in 2024. The company has faced intense international competition for galvanized steel at its Hamilton, Ontario, facility, leading to threats of job cuts. While Algoma CEO Rajat Marwah has noted that a "plate-first" strategy focused on Canadian infrastructure is working, the human cost of the export collapse remains a central concern for labor advocates.
Will the U.S. auto and aviation exemptions remain?
The United Steelworkers union is currently challenging the scope of Canada's trade protections, pointing to specific gaps in the current retaliatory framework. Marty Warren, head of the Canadian branch of the union, has noted that while the industry is turning around, a full revival requires more aggressive measures against imports. Specifically, the union is calling on Ottawa to impose tariffs on steel used in the U.S. auto and aviation industries, which currently enjoy exemptions from Canada's broader retaliatory tariffs.
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