These companies say they’ve laid off workers in Canada because of tariffs

A crane moves coils of steel at an Algoma Steel facility in Sault Ste. Marie, Ont., on March 14, 2018. (Justin Tang / The Canadian Press)

The global trade war sparked by U.S. tariffs has resulted in job losses in Canada.

Layoffs are expected for some companies that are affected by the trade upheaval and uncertainty surrounding the tariffs, said Andrew Bratt, a labour and employment expert and partner at international law firm Gowling WLG’s Toronto office.

“It was only a matter of time before companies were going to have to resort to layoffs because they’re expecting there to be a huge reduction in overall revenues,” Bratt said in a video interview with CTVNews.ca. “They’re going to have to cut their labour costs.”

Bratt says that even with Canada’s newly enhanced “work-sharing” special measures to support businesses in response to the tariffs, layoffs are the most effective way for companies to cut costs quickly.

The federal government’s work-sharing program helps employers and employees avoid layoffs through an agreement between employers, employees and Service Canada to share in the reduction of work. However, Bratt says that process can be time-consuming and complex.

As the tariffs begin to have a chain reaction on the economy, here are some companies that have announced layoffs, which they say are connected to the levies.

Algoma Steel

Algoma Steel Group Inc., based in Sault Ste. Marie, Ont., has laid off more than two dozen people. The company says it is continuing to monitor the situation. The layoffs come as the steelmaker reported Wednesday a net loss of $66.5 million in its fourth quarter last year compared with a net loss of $84.8 million a year earlier. CEO Michael Garcia says the U.S. steel and aluminum tariffs add more uncertainty to the market, though the company was optimistic the industry would get government support, and that steel trade would return to normal, The Canadian Press reported Wednesday.

“The tariffs are expected to have a material and adverse impact on the Company’s financial position, results of operations and liquidity; however, an estimate of the financial impact cannot be made at this time,” according to the company’s press release Wednesday.

Canada Metal Processing Group

Canada Metal Processing Group, a major Canadian steel manufacturer based in Brossard, Que., announced on Feb. 24 that it’s laying off 140 production and office staff in Ontario and Quebec. The company, which operates subsidiaries Ivaco Rolling Mills, Sivaco and Infasco, said in a press release last month that “the difficult but necessary steps” were made in response to the “lower anticipated demand and production volume, due to U.S. tariff threats and trade challenges in Canada with increasing imports.” The company said it is also implementing “cost savings actions” and cancelling or pausing some projects.

Sheertex

Montreal-based pantyhose maker Sheertex temporarily laid off 40 per cent of about 350 workers partly because of the tariff threats, The Canadian Press reported on Feb. 5. CEO Katherine Homuth said U.S. tariff changes added to the challenges and significant financial uncertainty her company was facing. Sheertex does 85 per cent of its business south of the border.

South Shore Furniture

South Shore Furniture, a Quebec furniture manufacturer, said it cut 115 jobs and will restructure its business model because of the U.S. tariff threats, The Canadian Press reported on Feb. 5. It said it was laying off 97 people at its headquarters and factory in Ste-Croix, Que., and 18 workers at its facility in the Eastern Townships.

The company said its sales took a big hit because of the uncertainty around the tariffs, noting 70 per cent of its products are sold in the U.S. Major American retailers have opted to import more merchandise from Asia instead of Quebec because of the trade threats, it added.