Ottawa has set a deadline of five business days for the American owner of Stelco to present a plan ensuring job retention at the steelmaker in Hamilton. Cleveland-Cliffs, based in Ohio, announced intentions to lay off up to 500 workers and halt specific steel production at Stelco. This action is deemed a breach of the commitments made during the company’s acquisition in 2024, prompting Industry Minister Mélanie Joly to warn of potential legal action under the Investment Canada Act.
In a letter addressed to Stelco’s president, Paul Simon, on Monday, Joly emphasized the government’s commitment to upholding obligations and indicated readiness to pursue legal measures if necessary. Cleveland-Cliffs acquired Stelco for $3.4 billion, highlighting the preservation of national interests and workforce importance in the deal.
The agreement includes commitments to maintain the same number of unionized and non-unionized employees as at the time of acquisition. Cleveland-Cliffs CEO, Lourenco Goncalves, justified the layoffs citing the impact of the Canada-U.S. trade war on Stelco’s operations, emphasizing the necessity of the cuts due to changing market conditions.
Prime Minister Mark Carney pledged to utilize all available legal avenues against Cleveland-Cliffs to ensure compliance with the commitments made under the Investment Canada Act. The government is prepared to enforce these commitments through legal action if required.
Moreover, the Ontario government announced an investment exceeding $200,000 in collaboration with Ottawa to support steel and manufacturing workers in Hamilton through the Canada-Ontario Workforce Tariff Response initiative. This funding aims to assist workers in upgrading their skills and transitioning to high-demand careers, reflecting efforts to mitigate the impact of economic challenges.
In light of the developments, union representatives expressed disappointment and skepticism regarding Stelco’s layoff plans, despite governmental pressure. Stelco’s internal communication attributed the layoffs to stiff competition from imported steel products, underscoring the challenges faced by the company.
Goncalves voiced support for Trump’s trade measures, including tariffs on Canadian steel and aluminum imports, emphasizing the importance of supporting American steelworkers while acknowledging the need for a balanced approach to trade. The situation reflects ongoing tensions in the steel industry amid evolving market dynamics and geopolitical factors.