Ottawa Weighs Legal Action Against Cleveland-Cliffs Over Stelco Layoffs
Federal Industry Minister Mélanie Joly says all legal options are being considered after Stelco's American owner, Cleveland-Cliffs, rejected demands to halt layoffs that the government argues violate 2024 acquisition commitments under the Investment Canada Act.
Federal Industry Minister Mélanie Joly said "everything is on the table" regarding potential legal action against Cleveland-Cliffs, the American owner of Canadian steelmaker Stelco, after the company rejected government demands to halt ongoing layoffs. The Canadian government is currently reviewing its options under Section 40 of the Investment Canada Act, which could include financial penalties, court orders, or forcing a sale of Canadian assets.
The dispute centers on employment commitments made when Cleveland-Cliffs purchased Stelco in 2024. Under those terms, the company agreed to maintain at least the same number of unionized employees and the vast majority of non-unionized employees for five years following the acquisition. The federal government interprets these terms as requiring the continuous maintenance of employment levels.
Cleveland-Cliffs CEO Lourenco Goncalves disputes this interpretation. He argued that the agreement does not require maintaining employment levels every day throughout the five-year period and described the current layoffs as temporary. The company cited U.S. President Donald Trump's 50 per cent tariffs on Canadian steel as a factor behind its decision to proceed with the cuts.
Ron Wells, president of United Steelworkers Local 1005, reported that 90 workers were laid off last week, with another 85 expected to lose their jobs by the end of this week. The union estimates that 300 to 350 jobs could be cut in Hamilton, with additional layoffs possible at Stelco's Lake Erie Works in Nanticoke, Ont.
In response to the job losses, Federal NDP Leader Avi Lewis and Ontario NDP Leader Marit Stiles have urged the federal government to nationalize Stelco to protect workers.