Ottawa has given the U.S. owner of Stelco a deadline of five business days to present a plan to preserve jobs at the Hamilton-based steelmaker or face potential legal consequences.
Cleveland-Cliffs, headquartered in Ohio, recently announced intentions to lay off up to 500 employees as it suspends certain steel production at Stelco, a move that the federal government claims goes against the “binding commitments” made during its acquisition of the company in 2024.
Industry Minister Mélanie Joly sent a letter to Stelco president Paul Simon on Monday, stating that Ottawa is ready to pursue legal action under the Investment Canada Act to uphold the agreement. Joly emphasized the government’s commitment to enforcing compliance with undertakings and mentioned the Act’s provisions for breaches, including seeking court orders for compliance, divestment, or financial penalties.
Cleveland-Cliffs acquired Stelco in a $3.4 billion cash-and-stock deal with a focus on national interests and the workforce’s importance, as highlighted in a previous news release.
According to Joly’s communication, the commitments include maintaining the same number of unionized and non-unionized employees as at the time of the acquisition announcement. Cleveland-Cliffs CEO Lourenco Goncalves justified the layoffs citing the impact of the Canada-U.S. trade war and the necessity to ensure Stelco’s steel sales to the U.S., a critical condition of the deal.
Prime Minister Mark Carney declared last week that Ottawa would exhaust all available legal measures against Cleveland-Cliffs to ensure compliance with its obligations.
The government’s next steps could involve legal action as foreign takeover commitments typically span five years under the Investment Canada Act, covering investment levels, headquarters location, and employment specifics.
In a statement, Ron Wells, president of United Steelworkers Local 1005, expressed skepticism about Stelco reversing its layoff plans despite government pressure.
Ontario’s government announced an investment exceeding $200,000 in collaboration with Ottawa through the Canada-Ontario Workforce Tariff Response to assist steel and manufacturing workers in Hamilton with skills upgrading and transitioning to high-demand careers.
Goncalves has voiced support for Trump’s Section 232 measures imposing tariffs on Canadian steel and aluminum imports, emphasizing backing for Canadian steelworkers and a belief that “America first is not America only.”
