Dire steel plant outlook, professor tells TV panel

A gloomy opinion from one of the country's better known academics.

Appearing on TVO's The Agenda with Steve Paikin Monday, Ian Lee, an assistant professor with Carleton University's Sprott School of Business in Ottawa, said he anticipates Essar Steel Algoma will either close or shrink in size.

"We have to retrain the people who are clearly going to lose their jobs, and I hate to say this…that firm is already in bankruptcy and it's going to get closed down, or at least radically reduced," Lee said.

"There is going to be significant unemployment in the Sault, and we need to put resources in there to retrain these people, we can't just throw them overboard."

Lee did not specify what those workers should be retrained for during the broadcast.

Steel mills in Canada can not compete with those in China and India, Lee said, speaking to SooToday Tuesday.

"They (the Chinese and Indians) desperately need these two industries and they're willing to subsidize and dump just to keep the jobs going in their countries, so the sad, blunt reality is there's going to be a lot of closures of steel plants (in Canada, the U.S. and Europe) over the next two, three or four years," Lee said.

"Those firms (Essar Steel Algoma and U.S. Steel Canada), even if they are saved, are going to be in much, much smaller shape than before because there is vastly too much steel being produced relative to world demand."

Lee told SooToday the Sault's municipal leaders should think up a business plan to reinvent the community, referring to Pittsburgh and Philadelphia as successful examples of "classic, rust bucket cities" which have transformed themselves away from steel.

David Orazietti, Sault MPP, who appeared with Lee as a member of a panel on Monday's broadcast, brushed aside Lee's projection while on air.

"Our community has faced this before, this industry has faced this before, and they have emerged restructured and have gone on with gainful employment in our community."

Orazietti agreed postsecondary training opportunities should always be available for those laid-off workers who need it, but insisted it's now up to the federal government to help save Ontario's steel industry.

Orazietti said the federal government must work to update 30-year-old trade rules to make sure foreign steel, especially Chinese steel, does not get dumped into Canadian markets, having an adverse effect on the Canadian steel sector.

Orazietti pointed to the Ontario government's own attempt to help Essar Steel Algoma modernize with a $30 million grant, announced in July 2015.

That funding has not been used yet.

Also appearing with Orazietti and Lee on the The Agenda panel were Charlotte Yates, University of Guelph academic vice-president and Elena Cherney, the Wall Street Journal’s Global Energy Editor.

To watch the episode of The Agenda outlined above, please click here.