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Ottawa is considering a range of legal options against Stelco’s American owner after the company rejected the government’s demand to halt planned layoffs at the Hamilton steelmaker, Federal Industry Minister Mélanie Joly said Wednesday.
Speaking with reporters in Ottawa, Joly said the government is reviewing a letter from Cleveland-Cliffs and remains determined to enforce the employment commitments the company made when it purchased Stelco in 2024.
“We expect Stelco to follow the undertakings that they’ve committed to,” Joly said.
“Right now, a business decision or even a change in market conditions cannot be used to not follow their commitment.”
Joly said the government is examining its options under Section 40 of the Investment Canada Act, which could include financial penalties, a court order forcing the company to comply with its commitments or an order requiring it to sell its Canadian assets.
“Everything is on the table.”
Speaking with reporters in Ottawa, Federal Industry Minister Mélanie Joly said the government remains determined to enforce the employment commitments Cleveland-Cliffs made when it purchased Stelco in 2024. (CBC)
The minister did not announce whether the government would launch court proceedings or provide a timeline for a decision. She said Ottawa remains in contact with the company and the union representing Stelco workers.
“I’m always open to sit down with the company and find a solution, but we’re looking at everything that is possible to keep jobs in Canada,” Joly said.
She also described the situation at the Hamilton steelmaker as “unacceptable.”
The comments come after Cleveland-Cliffs CEO Lourenco Goncalves said the company would proceed with layoffs despite Ottawa’s warning that the cuts could violate the terms of its purchase of Stelco.
Cleveland-Cliffs agreed to maintain at least the same number of unionized employees, along with the vast majority of non-unionized employees, for five years following the announcement of its acquisition in 2024.
Goncalves has disputed the government’s interpretation of those commitments, arguing the agreement does not require the company to maintain employment levels every day throughout the five-year period. He has described the layoffs as temporary, saying the jobs would return once Canada and the United States reach a trade agreement.
The company has also pointed to U.S. President Donald Trump’s 50 per cent tariffs on Canadian steel as a factor behind its decision.
Layoffs already underway
Ron Wells, president of United Steelworkers Local 1005, which represents Stelco workers, said layoffs are already affecting members.
Speaking on CBC Radio’s Metro Morning on Wednesday, Wells said 90 workers were laid off last week, with another 85 expected to lose their jobs by the end of this week. Further layoffs are expected over the following weeks.
The union has estimated that 300 to 350 jobs could be cut in Hamilton, with additional layoffs possible at Stelco’s Lake Erie Works in Nanticoke, Ont.
Lourenco Goncalves, CEO of Stelco parent company Cleveland-Cliffs, speaks with CBC’s Rosemary Barton following his company’s official response to the federal government’s threat of legal action amid layoffs at the company’s Hamilton, Ont.-based steel plant. In a letter obtained by CBC News, Stelco says it is not violating employment commitments.
Wells has argued that Cleveland-Cliffs is violating its employment commitments and urged the federal government to pursue legal action.
He also warned that the consequences could extend beyond the steelmaker, as other manufacturers depend on Stelco’s products.
“Steel is essential to the supply chain,” Wells said, warning that disruptions could affect businesses producing everything from appliances and garden sheds to automotive products.
Calls for public ownership of Stelco
The dispute has also prompted calls for public ownership of the steelmaker.
Federal NDP Leader Avi Lewis and Ontario NDP Leader Marit Stiles have urged the federal government to nationalize Stelco, arguing that court proceedings could take too long to protect workers and Canada’s steelmaking capacity.
Stiles has also called on Ontario Premier Doug Ford to work with Ottawa to pursue public ownership and Canadian management, while pressing the province to provide tariff relief and adopt a “Buy Ontario First” procurement strategy.
Prime Minister Mark Carney previously said the government would take appropriate action after receiving and reviewing the company’s response to Joly’s demand.
