Cleveland-Cliffs CEO Lourenco Goncalves says federal financial support could not have prevented Stelco’s latest job cuts, directly challenging Ottawa’s argument that money was available to keep Canadian steelworkers employed.
Goncalves told Global News on September 30 that “no amount of money” would persuade the company to keep producing steel products for which he says Canada does not have sufficient demand.
His comments came one day after Prime Minister Mark Carney said Ottawa had financial assistance available and vowed to enforce employment commitments Cleveland-Cliffs made when Canada approved its takeover of Stelco in 2024.
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“There’s money on the table from the federal government,” Carney said, according to the AP News. He said the company had legal employment obligations and that Ottawa would pursue them using its available powers.
Stelco announced September 28 that it would indefinitely idle cold-rolled and coated operations at its Hamilton Works beginning in October and concentrate steel production at Lake Erie Works in Nanticoke.
READ: Cleveland-Cliffs Backed Trump’s Steel Tariffs. Now, Its Canadian Operations Are Idled.
Up to 500 workers could be affected, although Cleveland-Cliffs said a significant number of Hamilton employees could move to Nanticoke and that overall Canadian steel tonnage would remain unchanged.
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A company memo cited by the AP News said demand in Stelco’s traditional markets during the second quarter was almost 25% below the 2024 quarterly average, including a 10% decline in Canada. Stelco has also cited US tariffs and continued import pressure.
Goncalves told Global News that Stelco produces more galvanized steel than the Canadian market can absorb even if imports were completely eliminated. His stated solution is renewed access to the US market rather than government financing.
The federal government approved Cleveland-Cliffs’ acquisition of Stelco in October 2024 subject to a five-year package of binding undertakings under the Investment Canada Act.
Among them, Cleveland-Cliffs committed to maintain at least the same number of unionized employees as Stelco had when the transaction was announced and retain the vast majority of non-unionized workers. It also committed to maintain Stelco’s Hamilton headquarters and make significant capital and research spending.
The acquisition had an announced enterprise value of approximately $3.4 billion and closed November 1, 2024.
Global News reported, citing unnamed sources familiar with discussions, that Ottawa offered Cleveland-Cliffs several forms of assistance before the cuts. Goncalves disputed one source’s allegation that he wanted billions of dollars without conditions.
Carney has not said what specific enforcement action Ottawa could take or alleged that Cleveland-Cliffs has already been formally found in breach.
