Federal Industry Minister Mélanie Joly says the government is prepared to take legal action against Cleveland-Cliffs, the American owner of Stelco, after the company rejected Ottawa’s demand to halt planned layoffs at its Hamilton steelmaking operations.
“We expect Stelco to follow the undertakings that they’ve committed to,” Joly told reporters in Ottawa Wednesday, adding that “a business decision or even a change in market conditions cannot be used to not follow their commitment.”
The government says the layoffs break promises Cleveland-Cliffs made under the Investment Canada Act when it acquired Stelco in 2024, including a pledge to maintain at least the same number of unionized employees and most non-unionized staff for five years. Joly said Ottawa is examining options under Section 40 of the act, which could include financial penalties, a court order compelling compliance, or an order forcing the company to sell its Canadian assets. “Everything is on the table,” she said, calling the situation “unacceptable.”
Company Cites Tariffs, Market Conditions
Cleveland-Cliffs CEO Lourenco Goncalves has said the company will proceed with the layoffs, disputing Ottawa’s reading of the employment commitments. He argues the agreement does not require the company to maintain staffing levels every single day over the five-year period, and has described the job cuts as temporary, saying positions would return once Canada and the United States reach a trade agreement. The company has pointed to U.S. President Donald Trump’s 50 per cent tariffs on Canadian steel as a factor in its decision, while Ottawa has countered that the company’s own CEO has publicly backed those tariffs.
Ron Wells, president of United Steelworkers Local 1005, said layoffs are already hitting members, with 90 workers let go the previous week and another 85 expected to lose their jobs by the end of this week, with more cuts anticipated in coming weeks. The union estimates 300 to 350 jobs could be cut in Hamilton, with additional layoffs possible at Stelco’s Lake Erie Works in Nanticoke, Ont. Wells said Cleveland-Cliffs’ actions amount to a “manufactured crisis” meant to pressure the government into a trade deal, and warned that disruptions to steel supply could ripple into other manufacturing sectors, including appliances, garden sheds and automotive products.
Political Pressure Builds
Hamilton Mayor Andrea Horwath said she is concerned steelworkers are becoming “casualties” of the broader tariff dispute with the U.S. and pledged to push for protection of their jobs.
Federal NDP Leader Avi Lewis and Ontario NDP Leader Marit Stiles have called on the federal government to nationalize Stelco, arguing a court process could take too long to protect jobs and Canada’s steelmaking capacity. Stiles also urged Ontario Premier Doug Ford to pursue public ownership alongside Ottawa and to adopt a “Buy Ontario First” procurement approach while providing tariff relief.
Conservative MPs Ned Kuruc and Michael Guglielmin outlined what they described as their party’s plan to enforce Stelco’s job commitments, address Chinese steel dumping and boost demand for Canadian steel, including eliminating the industrial carbon tax and pre-approving large-scale liquefied natural gas projects.
Prime Minister Mark Carney has said the government would take appropriate action after reviewing Cleveland-Cliffs’ response to Joly’s demand. Joly said she remains open to meeting with the company to find a resolution, “but we’re looking at everything that is possible to keep jobs in Canada.”
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