The Impact of U.S. Tariffs on Steel, Aluminum, and Canadian Jobs

As global trade tensions escalate, the effects are being felt beyond international borders—and for Canadian workers, the repercussions are becoming personal. A new wave of layoffs is sweeping across the country, with Ontario and Quebec bearing the brunt of the economic fallout. The driving force? Tariffs imposed by the Trump Administration on steel, aluminum, and related goods.

The growing unease has left both employers and employees in a state of limbo. With market uncertainty and tightening margins, layoffs have become a reality for hundreds of workers in the manufacturing and export sectors—industries long regarded as the economic backbone of many Canadian communities. The ripple effects extend beyond factories and job sites, affecting local economies, small businesses, and the broader supply chain. As production slows and operations are scaled back, communities that depend on these sectors for employment, tax revenue, and social support are grappling with new economic challenges. For many workers, these layoffs are not just temporary setbacks—they represent a sudden loss of stability, benefits, and the confidence that their hard work will be met with long-term security.

The Growing Impact of Tariffs on Canadian Jobs

Recent moves by the U.S. government to impose and expand tariffs on steel, aluminum, and downstream finished goods have disrupted cross-border trade. For companies whose operations rely heavily on exporting to the U.S., this has triggered a rapid domino effect: stalled contracts, falling demand, and inevitable layoffs.

Algoma Steel, based in Sault Ste. Marie, recently laid off more than two dozen workers amid growing financial strain. Despite government support programs, the company has reported deepening quarterly losses and a lack of clarity about what comes next.

In Quebec, Canada Metal Processing Group announced it would cut 140 production and office jobs across its operations. Citing “lower anticipated demand and production volume” linked to U.S. tariff threats, the company joined others in scaling back operations in Ontario and Quebec. Other manufacturers like Sheertex and South Shore Furniture have also downsized, citing the unpredictability of U.S. trade policy as a key factor.

While some businesses hope to recover, employees are left with unanswered questions:

Am I entitled to severance? What happens if I’m on long-term disability? Can I challenge my termination?

With over 40 years of experience in Ontario employment law, we can help you find an answer.

If You’ve Been Laid Off, Know This

Working exclusively for employees means we’re dedicated to your best interests. That means, in regards to taking steps in this current economic minefield, we’re here to help you navigate the complexities of layoffs—particularly when excuses are used to justify terminations without proper compensation or due process.

Many employees are unaware that even a “temporary” layoff can sometimes be challenged in court as a constructive dismissal, especially if there is no written contract allowing the employer to impose one. In Ontario, the Employment Standards Act (ESA) does provide rules for layoffs—but those rules are limited in scope. At common law, employees may be entitled to significantly more severance and compensation than what is provided under the ESA.

We strongly advise any employee who has been laid off—particularly in industries affected by the new tariffs—to seek legal advice before signing any release form or severance package. Employers may present an offer as “standard” or “final,” but it often falls short of what the employee is entitled to.

What If You’re on Long-Term Disability?

The economic fallout has also raised another critical issue: what happens if you’re laid off while receiving long-term disability (LTD) benefits?

This is an area where misinformation is rampant. If you are currently on LTD benefits through an employer-sponsored insurance plan and you are terminated, your eligibility for continued benefits may be affected—but it depends on the nature of your plan and the wording of your policy.

We regularly represent clients who have been let go while on disability leave, many of whom are shocked to discover their benefits have been suddenly cut off or reduced. In these cases, it’s essential to consult with a disability lawyer as soon as possible. Depending on your policy and the circumstances of your termination, you may have a strong claim to continue receiving benefits and to seek additional compensation.

Our team of Toronto disability lawyers can help determine if your insurance provider or employer acted unlawfully. We’ve fought successfully on behalf of many workers whose benefits were wrongly terminated, and we’re here to do the same for you.

Your Legal Options Are Time-Sensitive

If you’ve been affected by a recent layoff, particularly in Ontario’s steel, aluminum, or manufacturing sectors, don’t wait. Deadlines for filing certain employment claims can be as short as two years—and waiting too long could limit your ability to recover compensation.

Laid off while on LTD? Offered a severance package that doesn’t seem fair? Feeling pressured to sign a release?

Book a no-charge initial assessment. We’re here to help.