Canada Threatens Legal Action Against Cleveland-Cliffs Over Stelco Acquisition and Layoffs
Canadian Industry Minister Mélanie Joly consulted government lawyers after Cleveland-Cliffs CEO Lourenco Goncalves admitted he acquired Stelco to prevent it from undercutting his U.S. operations. The dispute centers on alleged violations of an agreement to maintain unionized employment levels through 2029, with the government warning of financial penalties or forced divestment.
Canadian Industry Minister Mélanie Joly contacted her department's lawyers after Cleveland-Cliffs CEO Lourenco Goncalves told CBC News that he purchased Stelco primarily to stop the Canadian steelmaker from undercutting his products in the United States. 
Goncalves stated that he could not afford to have Stelco flooding the U.S. market to the detriment of his own company. His remarks have intensified an ongoing dispute between the corporation and the Canadian government over recent layoffs at the Hamilton-based steel producer.
The Canadian government asserts that as part of the purchase agreement when Cleveland-Cliffs bought Stelco in 2024, the company committed to keeping the number of unionized Stelco employees at 2024 levels through to 2029. Officials allege that recent layoffs violate this commitment, and the minister has given the company a 15-day deadline to reverse them.
In a letter to the company, Minister Joly warned that if Cleveland-Cliffs does not honour its agreement, the government would pursue court remedies. These potential legal actions could include financial penalties or an order forcing the company to divest from Stelco. 
Cleveland-Cliffs maintains that it is in full compliance with all obligations made under the Investment Canada Act when it acquired Stelco last year.
Responding to the government's warnings, Goncalves said he takes exception to the idea of being forced to divest. He declared himself "persona non grata" in Canada and stated that the company is not for sale now, though he indicated plans to sell Stelco after operating it for a while.