Ottawa Warns Cleveland-Cliffs Over Stelco Layoffs, Threatens Forced Divestiture
Industry Minister Mélanie Joly has warned U.S.-based Cleveland-Cliffs that it must honor legally binding job commitments made when it acquired Stelco in 2024 or face being forced to sell its Canadian assets. The warning follows Stelco's announcement of up to 500 layoffs and the indefinite idling of its Hamilton operations.
Industry Minister Mélanie Joly has issued a stark warning to Cleveland-Cliffs, the U.S.-based owner of Stelco Inc., stating the company must uphold its legally binding job commitments or risk being forced to divest its Canadian assets.
When Cleveland-Cliffs acquired Stelco in 2024, it made commitments under the Investment Canada Act, including maintaining at least the same number of unionized workers for five years. The federal government now believes there have been "multiple breaches of the commitments" made under the legislation.
The dispute centers on Stelco's recent announcement that it plans to lay off up to 500 workers across its Hamilton and Lake Erie facilities. The company cited an ongoing trade crisis, weak demand, and import pressure as reasons for the cuts. Additionally, Stelco will indefinitely idle its Hamilton operations, which produce cold-rolled and galvanized steel.
Approximately 90 workers received layoff notices last week, with the first layoffs taking effect Sunday. The remainder of the planned layoffs are expected to roll out over the course of three weeks.
Joly stated that resolving the dispute over the planned layoffs is "a question of days." She confirmed that Ottawa has hired lawyers to examine its legal options against Cleveland-Cliffs.
During her remarks, Joly also raised the possibility of the federal government taking equity positions in strategic industries, though she stopped short of explicitly saying Ottawa was prepared to take an ownership stake in Stelco.