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.
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.
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.
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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.
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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.
What is the rush now Joly?
Liberal incompetence last 12 years is result we are living today!
Those conditions don’t expire just because “business strategy or market conditions have changed,” she wrote in the letter.
Melanie, it’s not Canada Post, changing market conditions certainly do apply
Sorry Libs, I am not supporting your failures anymore.
You did this because your heads have grown too big being in power for too long.
I do not care what talking head liberal activist academic have to say about anything at all.
Liberals will be the death of Canada and they will resign, or we pull the plug and get it over with
So is Joly going to spend millions of our tax dollars trying to win a losing legal battle in court. The business community know she is just a paper tiger and that they can break any agreement with the Carney Liberals with impunity.
Hey Joly did you recoup the money from Stellantis or is it “ not in public interest” like the millions “ lost” with the Green slush fund?
Or what? They owe us nothing for idiot liberal policies.
A company cannot keep people employed if they cannot sell their products. A company is in business to make money not to just employ people to do nothing also Carney and this Liberal government cannot keep throwing money at something and hope it gets fixed. Joly made all these threats before with other companies and it achieved nothing.
The agreement should be enforced and if necessary US property shpuld be confiscated to pay.
Well this will go to court and nothing will change. Company will be told to comply or put it for sale which they might and the price will be so high that no one will invest in it and the people will still be out of a job.
Be through this myself before in the Pulp and Paper industry and the plant I was at is still closed since 2006 and was sold multiple times since and never reopened. 800 plus jobs gone.
Provincial and federal governments said they would help but nothing ever came from that.
Joly is all talk
She has zero power over what happens
Which is why many foreign business don’t invest in Canada.
Liberal threats should do the trick. They’ll just pack up and leave, like so many others have.
Joly and her ilk are getting desperate huh? Yep never saw that coming.
hahaha… lol, lmao, hahaha.. what a dumb c4nt! Governments are useless. what a joke!