The Federal Industry Minister, Mélanie Joly, announced that Ottawa is exploring various legal avenues against the American owner of Stelco following the company’s refusal to comply with the government’s request to pause planned layoffs at the Hamilton steel manufacturer. Joly emphasized that the government is scrutinizing a communication from Cleveland-Cliffs and is resolute in upholding the job commitments Cleveland-Cliffs made when acquiring Stelco in 2024.
Joly stressed the importance of Stelco honoring its pledges and stated that external factors like business decisions or market fluctuations should not be used as excuses to avoid fulfilling their obligations. The government is assessing potential actions under Section 40 of the Investment Canada Act, including imposing financial penalties, seeking a court order for compliance with commitments, or mandating the sale of the company’s Canadian assets.
The minister did not disclose immediate plans for legal proceedings or provide a timeline but mentioned ongoing discussions with both the company and the Stelco workers’ union. Joly expressed willingness to engage in dialogue with the company to find a resolution while exploring all possible avenues to safeguard Canadian jobs. She condemned the situation at the Hamilton steel plant as unacceptable.
In response to Cleveland-Cliffs CEO Lourenco Goncalves proceeding with layoffs despite Ottawa’s warnings, Joly’s stance has been to protect the agreed-upon job levels post-acquisition. Goncalves has contested the government’s interpretation, arguing that temporary layoffs are justified until a trade agreement between Canada and the U.S. is reached, citing President Donald Trump’s tariffs on Canadian steel as a contributing factor.
Layoffs have already commenced, impacting Stelco workers according to Ron Wells of United Steelworkers Local 1005, with further layoffs anticipated in the coming weeks. The union estimates significant job cuts in Hamilton and potentially at Stelco’s Lake Erie Works in Nanticoke, Ontario. Wells criticized Cleveland-Cliffs for violating its employment commitments and urged governmental intervention, emphasizing the critical role of steel in various industries’ supply chains.
The disagreement has sparked calls for public ownership of Stelco from Federal NDP Leader Avi Lewis and Ontario NDP Leader Marit Stiles, advocating for nationalization to swiftly protect workers and Canada’s steel production capacity. They have urged collaboration between federal and provincial authorities to secure public ownership, manage tariffs, and promote domestic steel procurement. Prime Minister Mark Carney has pledged suitable action following the company’s response to Joly’s demands.
Conservative MPs Ned Kuruc and Michael Guglielmin unveiled their party’s strategy in Burlington, Ontario, focusing on upholding Stelco’s job guarantees, addressing Chinese dumping practices, and supporting Canadian steelmakers against tariffs. Their plan involves eliminating the industrial carbon tax, reducing costs for local steel producers facing tariff disparities, and advancing large-scale liquefied natural gas projects.
