Federal Industry Minister Mélanie Joly has issued a formal demand letter to Cleveland-Cliffs, the U.S. parent company of Stelco, giving it 15 days to reverse recent layoffs, provide evidence justifying them, or face legal action.
The letter, sent Thursday morning to Stelco CEO Paul Simon, states that the layoffs violate job commitments Cleveland-Cliffs made when it acquired the Hamilton-based steelmaker in 2024. Stelco has attributed the job cuts to market conditions, including the 50 per cent tariffs the United States under President Donald Trump has placed on Canadian steel, as well as what the company describes as an influx of cheap imports.
According to the letter, Joly could ask a court to compel Cleveland-Cliffs to undo the layoffs or force the sale of its Canadian assets. The company could also face a fine of $10,000 for each day it remains in breach of the commitments made at the time of the takeover.
Minister Cites CEO’s Own Lobbying
The letter alleges that Cleveland-Cliffs CEO Lourenco Goncalves lobbied the U.S. government to impose steep tariffs on Canadian steel and shifted production from Stelco to the company’s U.S. operations before those tariffs took effect.
“Cliffs’ chief executive officer subsequently advocated for the very tariffs that Cliffs is now relying on as a basis for non-compliance with the Undertakings,” Joly wrote.
The letter also referenced testimony Goncalves gave to the Congressional Steel Caucus in January, in which, Joly’s letter says, he took credit for blocking Stelco from selling steel into the U.S. market and called the increase of Section 232 tariffs to 50 per cent “absolutely necessary.” During that testimony, Goncalves described Canada as “very problematic,” saying “the Canadian government believes that Canada has a birthright to sell everything they produce into the United States.”
In a press release, Joly said Cleveland-Cliffs could not use market conditions as an excuse. “Let me be clear: no act of God or change in market conditions can relieve Cleveland-Cliffs of the commitments it made to Canada. Those commitments are not optional,” she said, adding she remained open to discussions with the company while maintaining the government’s priority of protecting Canadian jobs and the domestic steel industry.
Company and Union Respond
Neither Cleveland-Cliffs nor Stelco immediately responded to requests for comment from the Toronto Star. In an earlier interview with the Hamilton Spectator, before Joly’s letter was sent, Goncalves defended the layoffs, saying, “I did what I had to do because I’m a responsible owner.”
In a letter sent to Joly the previous Friday, Stelco’s Simon blamed the 50 per cent U.S. tariffs for the job cuts, writing that “the state of Canada-U.S. trade…is emblematic of an entirely different economic order facing the industry than at the time Stelco’s undertakings were given.”
Marty Warren, head of the United Steelworkers’ Canadian division, welcomed Joly’s move. “We’re pleased by this letter and supportive of the minister’s efforts. This is good for our members, and good for Canada,” Warren said. He was more critical of Goncalves, saying, “What he’s done is taken a Canadian asset and positioned it for failure. He created these market conditions.”
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