The American owner of Stelco is pushing back against Prime Minister Mark Carney after Ottawa threatened action over plans to idle part of the company’s Hamilton steel operations and lay off workers.
Cleveland-Cliffs CEO Lourenco Goncalves said the company is within its rights to scale back operations, arguing the Canada-U.S. trade war has upended the conditions under which it bought Stelco in 2024. “I would not have acquired the Stelco if I knew that Canada and the United States would become what they became: enemies in trade,” Goncalves told CBC News.
Cleveland-Cliffs acquired Stelco in a cash-and-stock deal valued at roughly $3.4 billion. Goncalves said the purchase was predicated on Stelco’s ability to freely sell Hamilton-made steel into the U.S. market under the Canada-U.S.-Mexico Agreement. “We had the ability to sell into the United States. That was an underlying condition for me to acquire Stelco,” he said. That access has since been curtailed by Washington’s 50 per cent tariffs on Canadian steel.
Layoffs and Ottawa’s Response
On September 28, Stelco announced it would idle its Hamilton finishing operations in October, resulting in 350 layoffs, which the company attributed to U.S. tariffs and worsening market conditions.
Carney responded by warning the federal government would pursue action against Cleveland-Cliffs. “We will use all powers that we have and pursue them to the fullest extent of the law,” he said.
Carney’s warning centres on binding commitments Cleveland-Cliffs made when Ottawa approved the takeover under the Investment Canada Act. The five-year undertakings require the company to maintain Stelco’s Hamilton headquarters and unionized workforce, retain most non-unionized employees, and make significant Canadian investments. The company also pledged to maintain operations in Hamilton and Nanticoke, invest $60 million, and increase Canadian steel production.
Goncalves argues the trade environment has fundamentally changed since those commitments were made, and says he is acting within his rights as a business owner, vowing to fight Ottawa in court if necessary. He said he is operating within the “boundaries of what I can do as a responsible business owner.”
Dispute Over Market Access and Jobs
Carney has offered federal support, while Industry Minister Mélanie Joly’s office said Stelco rejected Ottawa’s proposals to maintain operations. Goncalves said funding isn’t the issue — market access is. “There’s no market in Canada for the amount of galvanized steel we produce in Canada,” he said. “We need to export … to the United States.”
The United Steelworkers union argues the layoffs violate Cleveland-Cliffs’ commitments and has accused Goncalves of blaming tariffs he previously supported. Stelco says production will shift to its Nanticoke facility without reducing overall Canadian output, though the union says only about 40 Hamilton workers have been offered positions there.
When Cleveland-Cliffs acquired Stelco in 2024, then-CEO Alan Kestenbaum pledged to prioritize Canadian “national interests” and its workforce. Less than two years later, Ottawa and Stelco’s American owner are clashing over whether those commitments still apply amid a changed trade environment.
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