Stelco Inc. is defending plans to lay off up to 500 workers across two Ontario plants, telling Canada’s industry minister that Canadian exports of cold-rolled and coated steel to the United States have fallen 58 per cent from pre-trade-war levels as foreign imports continue to undercut domestically produced steel.
In a seven-page letter to Industry Minister Mélanie Joly dated Oct. 9 and obtained by The Canadian Press, Stelco president Paul Simon described an industry reshaped by U.S. tariffs, softening demand and persistent foreign steel imports. “Stelco cannot continue to produce cold-rolled and coated steel products without incurring significant losses that are not sustainable,” Simon wrote, adding that the company “will continue with the idling of Hamilton Works.”
According to the letter, Canadian exports of cold-rolled and coated steel to the United States fell by 226,000 tonnes in the second quarter of 2026 compared with the 2024 quarterly average before the trade war began. Simon said imports now account for 45 per cent of market share for those products, despite federal restrictions aimed at protecting domestic producers. He called existing Canadian trade protections “woefully inadequate” to sustain a market that supports two domestic producers of those products, and said disruptions to industries that depend on the steel have driven a 10 per cent decline in domestic demand.
Employment Commitments Under Scrutiny
The letter was written in response to Joly’s demand that Stelco explain how it intends to honour employment commitments made by its U.S.-based owner, Cleveland-Cliffs, when it acquired the company in 2024. Ottawa’s approval of that takeover was conditional on Cleveland-Cliffs maintaining at least the same number of unionized workers and the vast majority of non-unionized employees for five years.
Simon, who is also Stelco’s general counsel, said the company is proceeding with plans to idle its Hamilton finishing operations despite Joly’s warning of possible legal action. He argued the layoffs — expected to affect both Hamilton Works and Lake Erie Works — do not breach the binding employment commitments, which he said do not prohibit layoffs or require staffing levels to stay above a specified number on every day of the five-year period.
Simon said Ottawa was first warned in July that Stelco might indefinitely idle its Hamilton finishing operations, after which federal officials suggested discussions about revising the employment commitments to reflect the planned shutdown.
Ottawa Says All Options Remain Open
In a statement posted to X on Oct. 10, Joly said Stelco’s employment commitments remain in force regardless of changing business strategies or market conditions, and that all options remain on the table as government lawyers review the company’s response.
Cleveland-Cliffs chief executive Lourenco Goncalves has publicly supported U.S. steel tariffs while promoting a “Fortress North America” approach under which Canada and the United States would impose stronger joint restrictions on steel imports from outside the continent.
Joly has previously said Stelco “explicitly chosen not to seek support” from government programs intended to preserve jobs and maintain operations. Simon said Ottawa’s offer of financial assistance did not address the underlying reasons behind the company’s decision to idle operations, noting the government had offered funding to offset maintenance and capital expenses in exchange for retaining workers. He said that assistance would not resolve the company’s lack of orders for cold-rolled and coated steel, calling the proposal “a last-ditch effort to cover for an inadequate Canadian trade regime.”
Stelco said it is taking steps to ensure its Hamilton finishing operations could restart with “minimal additional costs and time,” but gave no timetable for doing so.
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