Stelco has reportedly pushed back on accusations it breached its agreement with the federal government, saying they are “false,” and it “stands ready to protect its interests.”
This comes as Stelco begins laying off hundreds of workers, and faces threats of legal action from the federal government if those jobs are not preserved.
The Ontario-based steel manufacturer sent a letter responding to Industry Minister Melanie Joly after she sent a letter to Cleveland-Cliffs, the U.S.-based company which acquired Stelco in 2024. She also gave the company five days to respond.
Cleveland-Cliffs told Global News it sent a letter in response to Joly’s office on Oct. 9, although the response was not initially shared publicly.
Stelco’s letter to Joly, which was written by the company’s president and general counsel, Paul Simon, was shared with Global News Monday via a source who asked not to be named.
“Through our regular contact, the government has had significant advance notice of the impact these unprecedented market conditions have had on our business, and in more recent communications dating back to July 2026,” the letter said.
“Our early September meetings with several senior government officials, including representatives from your office, led Stelco to believe that the government understood the market realities confronting Stelco’s Hamilton Works finishing lines.”
Stelco, like Algoma and other Canadian steel manufacturers have been hit hard by U.S. tariffs of 50 per cent on Canadian steel imports, which led to a steep decline in sales to U.S. customers. The company said these market conditions have forced it to layoff up to 500 workers.
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‘We feel like pawns’: USW Local 1005 president reacts to Hamilton Stelco layoffs -
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Layoffs begin at Stelco’s Hamilton plant -
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Stelco job cuts take effect despite Ottawa’s threat of legal action -
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If Stelco ‘is honest, they’ll get back to us,’ Joly says as layoffs begin in Hamilton -
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Business Matters: Union representing Stelco workers says layoffs have started at Hamilton plant
Joly responded on social media on Oct. 10 after reportedly receiving the letter from Stelco.
“The Government of Canada continues to expect Stelco to meet its legally binding commitments to employees. These commitments were agreed upon as undertakings under the Investment Canada Act and do not cease to apply because of changing business strategy or market conditions,” said Joly in the statement.
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“As our legal team reviews the Stelco letter, all options are on the table.”
Canada gave U.S.-based Cleveland-Cliffs the go-ahead to purchase Stelco back in 2024 under the Investment Canada Act (ICA), which regulates foreign takeovers.
Speaking in the letter to Stelco last week, Joly said 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.
Those conditions don’t expire just because “business strategy or market conditions have changed,” she added.
“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.
Stelco pushed back on Joly’s accusations in its letter, and said it “remains in compliance” with the undertakings in the agreement from 2024.
“Stelco submitted its annual report confirming its compliance with the employment undertakings in November 2025. That report highlighted that Stelco was facing significant challenges due to the unforeseen consequences stemming from unprecedented U.S. tariffs and Canada’s failure to advance an effective ‘Fortress North America’ trade regime,” the letter said.
“Your representation that Stelco’s planned layoffs cause it to breach its undertakings is false as the undertakings do not stipulate a commitment to avoid layoffs.”
When the layoffs were first announced last month, Prime Minister Mark Carney said the company “betrayed” Canadian workers and insisted “there’s money on the table” to keep employees on the job.
In an exclusive interview with Global News from Sept. 30, Lourenco Goncalves, the chairman and CEO of Cleveland-Cliffs, said the company’s decision was purely market-driven and that financial incentives could not fix the fundamental issues.
“I’m not shutting down, I’m not dismantling,” Goncalves said during a 10-minute phone call. “There’s no market in Canada for the amount of galvanized steel we produce in Canada. We need to export… to the United States.”
“Until we reestablish that, there’s nothing we can do, nothing.”
The union representing the roughly 500 steel workers facing potential layoffs, USW Local 1005, said it was not consulted nor did it have an opportunity to review those undertakings in the ICA.
“We were assured by both Cleveland Cliff’s and the Federal Government that bargaining unit employment levels would remain the same for 5 years. In other words no layoffs,” said the union’s president Ron Wells in a statement.
“Although we weren’t privileged to the signed agreement between Cliff’s and the Government, the response reeks of desperation as the original explanation of Stelco being victims of Trump’s steel tariffs wasn’t flying.”
Stelco, in the letter to Joly, denied wrongdoing, and based on the information presented to the federal government throughout the trade war, and the government’s own guidelines, the company said:
“In a situation such as this, Stelco should not be responsible for any non-compliance with its undertakings. Stelco stands ready to protect its interests consistent with the Investment Canada Act and its guidelines.”
Global News sent requests for comment to Stelco and Cleveland-Cliffs, but neither responded by publication.
– With files from Global News’ Colin D’Mello and The Canadian Press
“…..without health care, high gas/food prices, wars, ICE on your doorstep, etc etc. ”
This totally sounds like canada in January. Just saying
Colin
You probably know that you get real and unbiased news from CBC and CTV.
Keep watching
TDS is Canada’s official foreign trade policy. It explains everything that’s gone wrong with this country. We got boomers retired sitting in their rocking chairs watching 24 hour news cycle on repeat. TRUMP TRUMP TRUMP TRUMP TRUMP… they support every idiotic policy and vote based on hate of 1 man and their emotions rather than with common sense logic. Brainwashing and cognitive dissonance at its finest.
Here is novel idea. Why not use Canadian steel for building LNG plant in BC instead of Chinese what Carney agreed
The Federal Liberals have been doing a terrible job since 2015 with the idiot part time drama teacher Justin Trudeau in charge; making enemies world wide, including with the USA. It’s the same liberal government today with a different face on it, Carneys……Have things gotten any better in Canada? Nope. However a lot of things have gotten worse.
Dear Ontario people. You voted for this sh$tty government. I hope you actually have 30% unemployment. The west hates you.
Hilarious how the morons on this thread call true Canadians ‘bootlickers’ when it is they, themselves, who are the actual Bootlicking MAGAts!
@ Anonymous October 12, 2026 at 5:33 pm. Lots of countries are doing fine. India grew at 7.8%. Job creation is up in Vietnam. Even Mexico is doing better than Clownada. Maybe take your nose out of Carney’s bunghole and smell reality
Take the greedy American users to court! I’m am so tired of Americans screwing over every one! They are a bunch of thieves and liars! The get theirs and then back out of the deal!!
Can’t trust an American!!
I find funny some commenters here think of you don’t bootlick Carney you are a MAGA traitor. It was the Liberals that have betrayed Canadians since 2015.
MAGAt traitors posting and displaying their total lack of brain matter once again, lol!
Carnhole and his swallowers ya can’t fix stupid
Interesting how Carney thinks Stelco should keep their promises but yet he hasn’t kept his promises to Canadians. Total hypocrisy.
What pithy excuse will Carney give now shout these recent job losses at Stelco or the 100,000 lost jobs in August and September. We expect results not speeches or platitudes.
Those who are attacking Carney, give your head a shake. You think ANY LEADER IN ANY COUNTRY is doing better given the orange tyrant that now considers Canada an enemy? Don’t like Carney, go live in the US without health care, high gas/food prices, wars, ICE on your doorstep, etc etc. Even at our worse times we are 100% better than the people in the US.
It doesn’t matter what Stelco believed, what is of import is that it promised to maintain the level of jobs and it has not.
At this point I think PP could have done better than Carney. Not sure it could be any worse than where Canada is right now.
From now on there should not be US owned companies in Canada. Another contract signed in pencil I guess. Typical of the US, money first and not the people.
It will be interesting listening to Carney and Joly trying to wriggle their way out of this one. No Canadian asset should ever have been sold to foreign investors once you do you lose complete control. Now the Liberals think some company that has a shrinking market will pay employees just to sit around, that’s Liberal ideology at its best just keep throwing money at a lost cause ” The budget will balance itself” right.
Carney has been a total disaster so far as PM. No positive relics in over 18 months.
I don’t like Carney or PP, but Carney has been a total disappointment as PM so far. Canada lost over 100,000 jobs the last 2 months, now more job losses at Stelco and who is next?
Another bullsh_t mess ‘courtesy’ of the orange guy’s bullsh_t tarrifs.
Maybe Carney can cut all the punitive taxes facing Stelco and other heavy industries. The industrial carbon tax is very draconian and adds to bottom line manufacturing costs.
Businesses dont operate like a government here in Canada, they have to make money, not just spend money!
Joly and Carney are a joke who dont know the law! Spew off but accomplish very little!
How is Elbows Up working out now? Hilarious
I thought Lard Ford and Clowney were elected to protect Ontario jobs. They are doing a horrible job no doubt.
Push back all they want, they broke a legal & binding contractual agreement with the Fed govt!
Carney makes promises and doesn’t deliver. Just like he said he would lower grocery prices My Thanksgiving dinner was more expensive this year than last year.
Joly has no jurisdiction on this. Didn’t she threaten Stellantis also of course with no follow up. All talk and no action is the Carney Liberals.
MAGA traitors is against Canadians workers and back their MAGA overlord
I blame Carney. He still hasn’t delivered the deal he promised back in the 2025 General Election. He said it would be done by end of July 2025.
There were workforce size conditions attached to the sale 2 years ago. Cleveland-Cliffs supported Trump’s steel tariffs and are now trying to use the change in market conditions as an excuse for the layoffs. The last time this happened it was settled out of court.
This is most definitely not on the LIberals no matter what commenters from who knows where say.
This is on the Libs. They approved this sale because just two years ago they AND Carney gave no consideration to our resource and manufacturing sectors. Their pro “carbon pricing” mindset made then think that an econony can survive on jobs at Dollorama or Shoppers Drugmart, and a whole lot of wishful thinking and pixie dust.
The LPC could not care less about laws
They are found guilty of violating them by the courts on a regular basis