Ottawa has issued a five-day ultimatum to the American owner of Stelco, demanding a plan to preserve jobs at the steelmaker in Hamilton. Cleveland-Cliffs, based in Ohio, recently announced intentions to lay off up to 500 employees and halt specific steel production at Stelco, breaching commitments made during its 2024 acquisition. Industry Minister Mélanie Joly warned of potential legal action under the Investment Canada Act if the agreement is not upheld.
The government emphasized the importance of honoring commitments, stating that remedies for breaches may include court orders for compliance, divestiture, or financial penalties. Cleveland-Cliffs acquired Stelco for $3.4 billion, emphasizing national interests and workforce significance. CEO Lourenco Goncalves defended the layoffs, attributing them to the Canada-U.S. trade war’s impact on steel sales conditions outlined in the acquisition deal.
Prime Minister Mark Carney affirmed Ottawa’s intent to utilize all available legal measures against Cleveland-Cliffs, emphasizing the government’s commitment to enforcing the law. The company could cite uncontrollable circumstances such as U.S. tariffs to justify non-compliance with the undertakings. Past litigations involving Stelco’s previous owner, U.S. Steel, over job protection were settled out of court in 2011.
Union representatives expressed disappointment and skepticism regarding Cleveland-Cliffs’ ownership promises. Despite Ottawa’s pressure, there are doubts that Stelco will reverse its layoff plans. Ontario pledged over $200,000 in partnership with Ottawa to support steel and manufacturing workers in Hamilton through workforce development initiatives. Goncalves expressed support for Trump’s trade policies but emphasized solidarity with Canadian steelworkers. Trump, meanwhile, lauded a steel investment plan in Iowa as evidence of the success of his administration’s steel tariffs.