Algoma Steel CEO stepping down amid deep losses, ongoing U.S. tariffs

Rolled coils of steel sit in the yard at Algoma Steel Inc., the second largest steel producer in Canada, in Sault Ste. Marie, Ont., Friday, July 25, 2025. Photo by THE CANADIAN PRESS/Nick Iwanyshyn

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Sault Ste. Marie, Ont.-based Algoma Steel Group Inc. chief executive Michael Garcia will step down at year’s end as the company continues to face United States tariffs that have caused steep losses.

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The company on Wednesday framed the decision as a planned retirement initiated by Garcia in late 2024 and said the transition is the result of “a comprehensive succession planning process.” Chief financial officer Rajat Marwah will assume the CEO role in January.

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Algoma is one of the Canadian companies that has been hardest-hit by U.S. tariffs. It reported a net loss of $485.1 million in the third quarter, compared to a $106.6-million loss in the same quarter a year ago, and a direct tariff expense of $89.7 million.

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“The U.S. steel market remains largely closed to us, and broader market conditions continue to present headwinds,” Garcia said in a release.

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The company reported a 19.4 per cent drop in steel shipments to 419,173 tons in the third quarter, compared to 520,443 tons a year ago.

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In September, Algoma accepted $500 million in loan relief from the federal and Ontario governments, which Marwah said would “support the continued execution of our strategic transformation as we diversify end markets and optimize the business during this transitional period.”

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Garcia has made no secret that U.S. steel tariffs, which rose to 50 per cent in June, have damaged the company.

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This summer, he said Algoma expects U.S. sales to decline to zero by the end of the year, which he estimated had previously accounted for more than 55 per cent of its total revenues.

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“Our focus remains on advancing our electric arc furnace transition,” he said.

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In 2021, the federal government gave Algoma a $200-million repayable loan so it could replace its blast furnace with an electric arc furnace, which is expected to lower its greenhouse gas emissions and provide more flexibility in how the company operates its plant.

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In addition, Ontario is providing support to the company to help with the cost and availability of electricity, according to Laura Devoni, vice-president of corporate affairs at Algoma.

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Still, Algoma faces pressure from multiple sides.

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The Organization for Economic Co-operation and Development has said there is a deepening crisis in the global steel market, caused by excess capacity, which it forecasts will continue to rise and outstrip demand through at least 2027.

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As a result, steel prices will continue to decline, “putting enormous pressure on the viability of even highly competitive steelmakers,” it said.

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Earlier this month, United States Steel Corp. filed a breach of contract lawsuit in Pennsylvania against Algoma after the Canadian company allegedly stopped accepting iron ore pellet shipments and sought to terminate a long-term supply agreement.