Joly presses Stelco’s U.S. owner to present job-saving plan in 5 days

The federal government is turning up the heat on the U.S. owner of Stelco Holdings Inc. over impending layoffs at the Hamilton, Ont.-based steel plant.

Industry Minister Mélanie Joly sent a letter to Stelco president Paul Simon on Monday laying out her “extreme disappointment” over the company’s plan to lay off up to 500 workers in response to U.S. tariffs and other market pressures.

Canada gave U.S.-based Cleveland-Cliffs the go-ahead to purchase Stelco back in 2024 under the Investment Canada Act, which regulates foreign takeovers.

Canada’s approval of the deal was contingent on the new owner maintaining the number of union jobs and the majority of non-union positions, Joly said.

0:33 If Stelco ‘is honest, they’ll get back to us,’ Joly says as layoffs begin in Hamilton

Those conditions don’t expire just because “business strategy or market conditions have changed,” she wrote in the letter.

“This is particularly relevant here, where Cleveland-Cliffs has cited trade disruptions as affecting its operations at Hamilton Works, notwithstanding its chief executive officer’s public support for Section 232 tariff measures,” Joly said.

Get breaking National news

Get breaking Canada news delivered to your inbox as it happens so you won't miss a trending story.

Sign up for breaking National newsletter Get Started

By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

Lourenco Goncalves, the chief executive of Cleveland-Cliffs, has publicly supported U.S. steel tariffs, saying they are a “necessary step” to curb dumped steel imports.

In the letter, Joly said she wants to see Cleveland-Cliffs’ plan to comply with all undertakings of the original acquisition. She asked for a response within five business days or the government could consider legal action.

If the steelmaker does not comply, Ottawa could go to superior court where a judge could order the company to meet its obligations, impose penalties or even order a sale of the business, Joly said.

Ron Wells, president of United Steelworkers local 1005, which represents workers at Stelco’s Hamilton plant, said he is pleased the federal government acted “very swiftly.”

“They were very slow to react last time,” he said, referring to an earlier dispute involving the steel mill under a different owner. “We actually had to lobby to get them to react.”

U.S. Steel began laying off hundreds of workers at the former Stelco operations in November 2008 and announced temporary shutdowns affecting another roughly 1,500 jobs the following March.

Then-industry minister Tony Clement did not issue a formal demand under the act until May 5, 2009 — roughly nine weeks after the larger shutdown was announced.

In that case, Ottawa rejected the company’s explanation for falling short of its labour and production commitments and took U.S. Steel to court.

The case was ultimately settled in 2011 after the company agreed to a new set of undertakings.

However, the steel mill entered creditor protection in 2014 and was acquired by Bedrock Industries in 2017, returning to the Stelco name, before Cleveland-Cliffs acquired the company in 2024.

“Cleveland-Cliffs knew exactly what they were agreeing to when they bought the place,” Wells said, referring to the five-year commitments the company made when it purchased the operations.

“We’re hoping that they will recant the layoff,” he said. “But I’m not holding my breath.”

“They’ll drag this through court and try to provide their rationale for how this was out of their control. But they’re all in favour of the tariffs so it’s contradictory.”

The existence of Joly’s letter was first reported by the Toronto Star.