Canada Shifts Steel Production as Trade Tensions Rise
Canadian steel output fell in 2025 as producers transition to electric arc furnaces amid a period of intense cross-border trade friction.
Updated on Oct. 27, 2026 in Manufacturing
Live Poll
Do you believe current international steel and auto trade tariffs benefit your country's economy?
Canada produced an estimated 11.5 million tonnes of crude steel in 2025, marking a 7.2 percent decrease from 2024 levels. The sector is currently undergoing a structural transformation as manufacturers decommission traditional blast furnaces in favour of electric arc furnace technology.
Why it matters
The domestic steel industry faces a dual challenge of internal industrial modernisation and a volatile trade environment defined by heavy reciprocal tariffs with the United States. These shifts impact long-term production capacity and domestic employment as companies adjust their manufacturing footprints.
Canadian crude steel output reached 11.5 million tonnes in 2025, down from 12.3 million tonnes in 2024, amid broader transitions to electric arc furnace operations. Manufacturers are managing these changes while facing 50 percent tariffs on exports to the U.S. and a reciprocal 50 percent surtax on American steel.
The players
Algoma
This major steel producer has decommissioned its traditional blast furnaces in favour of modern electric arc furnace technology.
ArcelorMittal Dofasco
This steel manufacturer is pursuing a capital-intensive plan to replace older furnace infrastructure with direct reduced iron and electric furnace technologies.
Stelco
This company is currently undertaking workforce adjustments, including significant planned layoffs at its Hamilton manufacturing facility.
The details
Algoma decommissioned its last blast furnace in January 2026, marking a pivot toward electric arc furnaces with a target annual production of 3.7 million tonnes. Concurrently, Stelco faces internal restructuring with 333 planned layoffs at its Hamilton plant as industry-wide capital transitions continue.
Timeline
2024: Canada produced 12.3 million tonnes of crude steel and 70 million tonnes of iron ore.
2025: Canada produced an estimated 11.5 million tonnes of crude steel.
December 31, 2025: Algoma ended its traditional blast furnace production.
April 6, 2026: The United States imposed 50 percent steel tariffs on Canadian imports.
September 8, 2026: Canada applied a 50 percent surtax on U.S. steel imports.
Market Landscape
This transition to electric arc furnace technology follows a pattern set by the 50 percent reciprocal steel tariff regime, forcing domestic producers to modernize to maintain competitiveness. The shift reflects a wider industry strategy to reduce reliance on legacy infrastructure while navigating volatile international trade barriers.
Readers may see potential shifts in the availability or cost of steel-reliant products as local manufacturers navigate high tariffs and operational restructuring. The ongoing labour changes at major plants like Stelco could also impact local employment numbers within the affected industrial regions.
The takeaway
The Canadian steel industry is undergoing a significant technological and structural transition driven by both domestic modernization goals and aggressive trade protections. Businesses and consumers should monitor how these 50 percent tariffs influence local steel pricing and supply chains in the coming months.
Further reading
For additional context on the domestic industrial sector, visit the Canada Manufacturing section.
Source note: This article includes information reported by Metal.
Live Poll
Do you believe current international steel and auto trade tariffs benefit your country's economy?
