Algoma Steel Layoffs March 23, 2026: Debt Relief Options for Sault Ste. Marie Workers

Algoma Steel is laying off 1,000 workers in Sault Ste. Marie around March 23, 2026, in a city of about 72,000 people. You lose a stable union paycheque as blast furnace and coke operations shut and the plant speeds up its electric arc furnace conversion under steep steel tariffs. Your bills do not stop when your job does. You protect your income, home, car, and credit by using Canadian debt relief laws now, instead of burning hundreds of dollars in interest each month while you wait for things to “work out.”

What Algoma Steel’s Layoffs Mean for Sault Ste. Marie Families

• 1,000 union and non-union Algoma workers lose jobs tied to the March 23, 2026 shutdown date.
• The company closes its blast furnace and coke ovens and moves faster to electric arc furnace production.
• Heavy steel tariffs near 50% on some exports squeeze demand and crush margins.

In a city of about 72,000 people, 1,000 stable jobs lost in a single plant hit almost every block. You feel it in your street, your union hall, your kids’ schools, and your family group chats. You do not watch this from a distance. You live it.

If your household relied on $1,300 per week from Algoma and drops to about $700 per week on EI, your income falls by about 45%. Your mortgage, car payment, and credit card balances do not fall at all. Without a plan, you start juggling payments within one to two months.

First you skip extra payments. Then you delay one card. Soon you shuffle cash from one credit line to another. In a larger city, you might replace income fast with another industrial job. In Sault Ste. Marie, the list of employers that pay Algoma-level wages is short.

Debt relief tools under the Bankruptcy and Insolvency Act are not only for “worst case” stories. They are built for exactly this kind of sudden income collapse. You use them to match your new income to a fair, legal payment and protect core assets while you look for your next role.

Book your free consultation now with a Licensed Insolvency Trustee and see the exact payment that fits your Algoma layoff income before your last paycheque lands.

Your 4-Week Countdown Before the Last Paycheque

• Week 1: List every debt and run the numbers.
• Week 2: Protect your housing and talk to your lender.
• Week 3: Meet a Licensed Insolvency Trustee.
• Week 4: Choose your path and lock in payments.

Week 1 – Inventory debts and run calculators. You start with a clear list:

• Creditor name and type
• Current balance
• Interest rate
• Minimum monthly payment

You then plug these into the debt-to-income and debt payoff calculators. If you owe $24,000 at 20% APR, your interest costs sit near $400 per month. Every month you wait costs you about $400 in interest while your income is about to drop.

You also estimate EI. Take your weekly insurable earnings and multiply by 0.55, up to the current EI maximum. If you earned $1,200 per week before layoff, your EI sits near $660 per week. That is your new base for any debt plan, not your old wage.

Week 2 – Protect housing first. You look at where you sleep before you look at your credit score.

If you rent, you check:

• Rent amount
• Months you can cover with EI and any partner income
• Room left for debt payments after food, transport, and kids

If you own a home, you check:

• Monthly mortgage and remaining term
• Property tax and insurance
• Estimated equity: current value minus mortgage balance

You call your landlord or lender before you miss a payment. Some lenders offer short-term deferrals or interest-only periods. Those fixes buy you time but do not erase the debt, so you still need a real plan.

You run the mortgage shock calculator with your income drop. If your household needs $3,500 per month for fixed costs but your new income is $2,400, you run a $1,100 hole each month. In six months, that gap becomes $6,600. That shortfall turns into maxed cards, payday loans, NSF fees, and arrears unless you cut your unsecured debt payments.

Week 3 – Meet a Licensed Insolvency Trustee. In Canada, only a Licensed Insolvency Trustee files a consumer proposal or bankruptcy under the Bankruptcy and Insolvency Act. You do not pay to find out your options. The first meeting is free and confidential.

You bring:

• Your full debt list
• Your last three pay stubs and EI estimate
• Mortgage, car loan, and lease details
• A rough budget for food, transport, kids, and medical costs

The trustee shows you:

• What a consumer proposal payment looks like for your numbers
• What a first bankruptcy would look like in time and cost
• Whether a consolidation loan is realistic with your credit and income
• How each option treats your house, car, RRSPs, and pension under Ontario law

You leave with actual numbers, not guesses. For example, you might learn that $32,000 in unsecured debt turns into a consumer proposal payment of $260 per month for 60 months. Interest stops. Collection calls stop. You keep your home with $20,000 in equity as long as you pay the mortgage.

Week 4 – Choose a path and commit. In the last week before your final pay, you decide:

• Keep paying minimums and hope income rebounds fast
• Apply for a consolidation loan at a bank or credit union
• File a consumer proposal under the Bankruptcy and Insolvency Act
• File a first bankruptcy
• Do nothing and accept calls, lawsuits, and garnishment risk

Doing nothing is a choice. You choose between growing interest, late fees, and calls or a legal plan that protects you. If you wait, you face wage garnishments and frozen accounts once creditors sue and win.

A consumer proposal spreads your reduced debt over up to five years with no interest and one fixed monthly payment. A first bankruptcy runs about nine to twenty-one months, with payments based on the federal surplus income rules. You pick the option that protects your income and assets best in your real life.

Take ten minutes today. List your debts, run the calculators, and book your free consultation with a Licensed Insolvency Trustee before your last Algoma paycheque lands. Lock in a payment based on EI, not on a job that ends.

How Layoffs Change Your Debt Risk Under Canadian Law

• Your debt contracts stay in force after a layoff.
• Creditors follow clear legal steps to collect.
• Canadian law gives you tools to stop them.

Under Section 66.12 of the Bankruptcy and Insolvency Act, a consumer proposal triggers a legal stay of proceedings. Under Section 69, a bankruptcy triggers a similar stay. Once Form 79 is filed with the Office of the Superintendent of Bankruptcy, unsecured creditors must stop collection calls, lawsuits, and wage garnishments on those debts.

Without that filing, the path looks like this:

• You fall 30 days behind and receive reminder calls and letters.
• At 60–90 days, your account goes to a collection agency.
• After that, a creditor sues in Ontario court for a judgment.

With a judgment, a creditor can:

• Garnish a share of your wages
• Freeze a bank account
• Register a lien on certain property

In Ontario, a wage garnishment can remove a large share of your take-home pay every month. When your EI ends and you return to work, that new paycheque can be garnished unless your trustee filing already protects you.

The Ontario Limitations Act, 2002 sets a basic two-year limit to sue on many unsecured debts after the last payment or written admission. That rule does not erase the debt, but it changes what a creditor can enforce in court. You do not build your plan around time limits alone. You use them as one factor in a proper plan with a trustee.

CRA debt is harsher. The Canada Revenue Agency garnishes wages and freezes bank accounts without going to court, often as soon as about 90 days after you ignore a tax debt notice. If part of your debt is tax, you treat that as urgent and talk about it early in your LIT meeting.

If you already missed two or more payments, book your free LIT consult today. Ask how to stop wage garnishment, CRA action, and lawsuits before they reach your next paycheque.

Consumer Proposal vs Bankruptcy for Laid-Off Steelworkers

Debt Options After Algoma Steel Layoffs (Example: $30,000 Unsecured Debt)

A consumer proposal sits between “keep paying” and bankruptcy. You offer your creditors a fixed amount, often 30–40 cents on the dollar, spread over a period up to five years. Once unsecured creditors accept, interest stops and you pay only that fixed monthly amount.

If you owed $30,000 at a blended 20% rate, minimum payments near $950 per month can drag on for more than 20 years and cost over $80,000 in total. In a consumer proposal, you pay about $275 per month for 60 months. You clear the debt, keep your house and car if you stay current on those loans, and avoid new interest.

In 2025, more than 120,000 Canadians used consumer proposals instead of bankruptcy. The average proposal cut unsecured debt by about 60–70% and spread payments over up to 60 months. Ontario residents made up the largest share of these filings, which shows how common and practical this path is after job loss.

A first bankruptcy gives faster relief for people with very low income and few non-exempt assets. You assign non-exempt equity to the bankruptcy estate and make surplus income payments based on federal guidelines. Your discharge for a first-time filing usually occurs in nine to twenty-one months, depending on your income and compliance.

Credit impact is real in both. A consumer proposal reports as an R7 and usually falls off your file three years after you finish. A bankruptcy reports as an R9 and usually stays six to seven years after discharge. With a well-structured proposal, you pay less, keep more, and rebuild sooner.

What Happens to Your House, Car, and Pension in Ontario

You do not lose every asset when you fix your debt. The Ontario Execution Act and the Bankruptcy and Insolvency Act protect key items. Federal rules shield most registered retirement savings.

House

Your house is both shelter and asset. In a consumer proposal, you keep your home as long as you keep paying the mortgage and property tax. You structure your proposal payment around your mortgage, not the other way around.

If you have home equity, the trustee factors that into your proposal. For example:

• Home value: $280,000
• Mortgage: $260,000
• Equity: $20,000

You might offer a slightly higher proposal payment to reflect that equity, but you stay in the house. Buyers and lenders care more about your ability to make payments going forward than about the word “proposal” on your file.

In a bankruptcy, home treatment depends on equity and provincial exemptions under the Ontario Execution Act. If your equity is below the protected limit once costs are considered, you usually keep the home and make agreed payments. If equity is higher, you and the trustee can arrange a lump sum or monthly payments to buy that equity back into the estate.

Car

You likely need a car for future shift work or a job beyond walking distance. Ontario exemptions protect a certain level of equity in one vehicle used for work and basic life. If your car is worth $12,000 and you still owe $10,000 on a loan, your $2,000 equity often sits within the protected range.

In a consumer proposal, you keep your car loan as long as you pay it. The proposal deals with unsecured debt, not your secured car loan. In a bankruptcy, you usually keep a financed car if equity is within the exemption and you keep paying. If the car is fully paid and worth well above the exemption, you and the trustee discuss options to protect as much value as possible.

RRSPs and Pensions

Most RRSPs and RRIFs are exempt from seizure in bankruptcy, except contributions you made in the 12 months before you file. You do not drain retirement savings to pay credit cards or lines unless you choose to. In a consumer proposal, those registered funds remain yours.

Registered workplace pensions sit under strong pension and insolvency rules. Defined benefit and defined contribution plans you built during your career usually remain safe in both proposals and bankruptcies. Cashing them out to pay unsecured creditors is almost always a bad trade. You lose decades of retirement security to cover short-term debt that a proposal or bankruptcy can clear.

If you own a house, car, or RRSPs, book a free call with a Licensed Insolvency Trustee today. Get a clear asset review before you sell, cash out, or skip another mortgage or car payment.

If You Are Unionized or Your Income Goes Up and Down

Algoma jobs often came with overtime, shift premiums, and seasonal changes. After layoff, your income may shift again if you:

• Draw EI
• Pick up part-time work
• Take contract or seasonal jobs

A good plan uses your real post-layoff income, not your best year. For example:

• EI: $650 per week
• Part-time work: $400 per month
• Total net monthly income: about $2,700

You build a consumer proposal payment that fits this steady level, not your old $1,300 per week. Trustees often look at several months of income to smooth out spikes and slow periods. If your income rises later, you can keep the same payment and finish on schedule or pay extra and finish early.

Union status does not block you from a consumer proposal or bankruptcy. The law cares about your numbers and assets, not your union card. In some cases, dealing with debt reduces stress and the risk of work issues that follow wage garnishments.

You also plan for review points. Every six or twelve months, you compare your actual income to your first estimate. If you started with only EI and later move into a higher paying role, you can:

• Keep the same payment and rebuild cash reserves, or
• Ask about increasing payments and finishing your proposal early

This flexibility is a major edge over informal deals with individual creditors. Those deals rarely adjust when your income drops, and they never give you a legal stay of proceedings under the Bankruptcy and Insolvency Act.

Where Algoma Workers Can Get Debt Help in Ontario Right Now

You do not need to sort through random ads and myths alone. You use regulated help and clear tools.

You start with:

• The Ontario debt relief overview page for all main options
• The job loss debt protocol 2026 for a step-by-step crisis plan
• The “within $200 of insolvency” quiz to test how tight your budget is

If your pre-layoff household needed $3,800 per month to stay current and your new income is $2,500, you run a $1,300 monthly hole. In six months, that gap is $7,800. You either plug it with high-interest debt and late fees or you restructure what you owe.

A Licensed Insolvency Trustee in Ontario gives you:

• A free, confidential review of your full situation
• A written breakdown of consolidation, consumer proposal, and bankruptcy options
• Clear next steps with real numbers, dates, and legal protections

You do not wait for a statement that says “legal action next.” You act while you still control the timeline.

Book your free consultation now with a Licensed Insolvency Trustee through our Ontario network. If you are not ready to talk yet, start with the 3-minute quiz and see in 60 seconds which debt relief path fits your Algoma layoff reality.

Real-World Scenarios

Jason M. – Sault Ste. Marie, Ontario

Jason is a 45-year-old millwright who worked at Algoma for 19 years. He earned $1,350 per week before the layoff and supports a partner and two kids.

He carries $32,000 in unsecured debt: three credit cards, a line of credit for a kitchen renovation, and a store card. After the layoff, his income drops to about $720 per week on EI.

His minimum payments are over $960 per month and barely touch the principal. After meeting an LIT, he files a consumer proposal with a payment of $280 per month for 60 months. Collection calls stop, interest freezes, and he keeps his home with about $20,000 in equity while staying current on the mortgage.

Amrita K. – Thunder Bay, Ontario

Amrita is a 37-year-old welder who did contract work at Algoma and then in local shops. Her income jumps between busy seasons and slow periods.

She owes $18,500 made up of a car loan shortfall from a prior repossession, two credit cards, and a small tax balance from missed instalments. After seasonal layoff, she lives on about $600 per week of EI plus $400 per month from part-time work.

Her budget allows about $180 per month for debt. An LIT structures a consumer proposal payment of $175 per month. She keeps her current vehicle, stays on the road for new jobs, and clears the tax and card debt over five years with full legal protection.

Lucie P. – Windsor, Ontario

Lucie is a 52-year-old single homeowner who spent years in steel-related work and later moved to an auto parts plant. She has a small defined benefit pension and a solid RRSP.

She owes $46,000 in credit card and line of credit debt after helping two adult children through school and covering a divorce. When overtime stops and she faces a layoff, she cannot keep up with $1,200 per month in minimum payments.

After reviewing options with an LIT, she files for a first bankruptcy. Her surplus income is modest, so she expects discharge in nine to twenty-one months, depending on future overtime. Her RRSP, except for the last 12 months of contributions, and her pension stay intact. She keeps her home by working with the trustee on her equity under the Ontario Execution Act and stays current on her mortgage.