Cleveland-Cliffs has five business days to convince Ottawa it will keep its Stelco job promises, or the federal government could ask a court to order a sale, impose penalties or compel compliance. Industry Minister Mélanie Joly sent the letter to Stelco president Paul Simon on Monday, after Stelco announced layoffs of up to 500 workers in Hamilton and Nanticoke, Ontario.
Joly wrote that the undertakings Cleveland-Cliffs gave when it bought Stelco “do not cease to apply simply because business strategy or market conditions have changed.” The letter also notes that CEO Lourenco Goncalves has publicly backed Section 232 US tariffs while citing trade disruptions as a factor at Hamilton Works.
Read: Cleveland-Cliffs CEO Says “No Amount Of Money” Could’ve Stopped Idling Stelco’s Canadian Ops
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Stelco is idling its cold-rolled and coated steel operations in Hamilton starting October 9 and consolidating production at Lake Erie Works in Nanticoke. It blames US tariffs for a drop of almost 25% in demand for those products in the second quarter, measured against the 2024 quarterly average, and expects Lake Erie to take in many displaced workers.
The union estimates about 350 Hamilton steelworkers will lose their jobs and says only about 40 have been offered work at Nanticoke. Local presidents say Cleveland-Cliffs has “violated the Investment Canada Act.”
Ottawa approved the takeover on October 30, 2024, after Cleveland-Cliffs accepted five years of binding undertakings. The company must keep union headcount at or above its level when the deal was announced, retain nearly all non-union staff, keep the head office in Hamilton and honor existing collective agreements. Hamilton Mayor Andrea Horwath welcomed the enforcement push, noting the layoffs come less than halfway into the agreement.
Goncalves says there’s “no market in Canada” for the galvanized steel the company makes there and that it needs to export to the United States. He told Bloomberg he expects a court to settle the dispute, while Ottawa says the company rejected its offers of financial support and market access.
Prime Minister Mark Carney has said the workers were “betrayed by the company” and vowed to use every legal power to enforce the commitments.
