Industry Minister Melanie Joly has quoted the job floors in Ottawa’s 2024 takeover agreement for the first time, in a second letter giving Cleveland-Cliffs Inc. 15 days to reverse layoffs at its Stelco plant in Hamilton or face legal action. Her first deadline passed with the layoffs going ahead.
Joly sent the letter Thursday to Stelco’s general counsel and said it lays out Ottawa’s evidence as groundwork for a possible court case. She said forced divestiture of Stelco is “definitely on the table” if Cliffs does not comply.
Her first letter, dated October 5, gave Stelco five business days to show how it would keep its job commitments. Stelco president Paul Simon replied October 9 that the breach claim was false and the company remained in compliance, and the first layoffs took effect October 11. Ottawa has instead extended the clock to 15 days.
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Read: Joly Says All Options Are Open After Stelco Calls Breach Claim False and Proceeds with Layoffs
The job floors
Cliffs must keep average annual employment of unionized workers at Stelco “no lower than 1,766”, equal to 100% of the average full-time-equivalent employment over the 12 months through June 30, 2024, the letter says. The salaried floor is 603, or 90% of the average for the previous 12 months.
Ottawa’s 2024 approval statement described the commitments only in general terms, so the letter gives the public its first look at the numbers.
The floors measure average employment over a year, and the text does not bar layoffs outright. Stelco told Joly the undertakings do not require it to avoid layoffs or to hold the same employment level every day. For comparison, Stelco employed about 1,800 United Steelworkers members across its two plants in August 2025.
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Where the layoffs stand
Read: Stelco Hands Out First Layoff Notices in Wave of up to 500 Cuts
Stelco plans to cut up to 500 jobs at its Hamilton and Lake Erie operations. United Steelworkers Local 1005 expects 300 to 350 layoffs in Hamilton over roughly three weeks. Local 1005 president Ron Wells said October 8 that the cuts had so far hit only unionized workers and spared salaried staff.
Joly’s letter says Stelco has also asked Ottawa to ease some commitments, employment levels among them, citing “unprecedented and escalating disruptions.”
Read: Cleveland-Cliffs CEO Says “No Amount Of Money” Could’ve Stopped Idling Stelco’s Canadian Ops
Cleveland-Cliffs CEO Lourenco Goncalves told Bloomberg a court will likely decide the dispute. The letter targets him directly, saying he endorsed US Section 232 steel tariffs in testimony to the Congressional Steel Caucus on January 14 and claimed credit for keeping Stelco out of the US market, and that Cliffs signed first on a January 28 industry memo urging President Donald Trump to impose steel levies. Joly points to a 2024 pledge by Cliffs to be a “strong advocate for policies that benefit both the U.S. and Canadian steel industries.”
Legal path
The industry minister has said Ottawa could ask a court to compel compliance, impose penalties or order a sale of Stelco.
Read: Cleveland-Cliffs Gets Five Business Days To Back Stelco Job Pledges Or Risk A Court-Ordered Sale
Cliffs declined to comment. The United Steelworkers union backed Joly, and a local union president called the layoffs “politically motivated in nature.” Ontario NDP Leader Marit Stiles said workers fear a “very long legal battle” and asked what Ottawa will do for laid-off workers’ families. Conservative MP Michael Guglielmin criticized Ottawa’s “shifting” timelines, pointing to Joly’s recent suggestion that a resolution was days away.
The 15-day deadline ends in early November.
