Ottawa has given the U.S. owner of Stelco a deadline of five business days to provide a plan for preserving jobs at the Hamilton steelmaker or could potentially face legal consequences. Cleveland-Cliffs, based in Ohio, announced intentions last week to lay off up to 500 employees as it suspends specific steel production operations at Stelco, which the Canadian government claims breaches the “binding commitments” made during the company’s acquisition in 2024.
In a letter addressed to Stelco’s president, Paul Simon, on Monday, Industry Minister Mélanie Joly expressed readiness to pursue legal action under the Investment Canada Act to enforce the agreement. Joly emphasized the government’s strict approach to upholding commitments and highlighted potential remedies for breaches, including court orders for compliance, divestiture, or financial penalties.
Cleveland-Cliffs acquired Stelco through a $3.4 billion cash-and-stock deal that was intended to prioritize national interests and acknowledge the significance of the workforce. The letter from Joly stressed the importance of maintaining the same number of unionized and non-unionized employees as existed before the acquisition was finalized.
CEO Lourenco Goncalves of Cleveland-Cliffs defended the layoffs as necessary and justified due to the Canada-U.S. trade conflict, citing Stelco’s ability to export steel to the U.S. as a critical aspect of the transaction. Prime Minister Mark Carney stated that Ottawa would utilize all available legal measures against Cleveland-Cliffs in response to the situation.