Stelco Proceeds With Layoffs of Up to 500 Workers Despite Federal Ultimatum
Stelco, owned by Cleveland-Cliffs Inc., is moving forward with plans to lay off up to 500 workers in Hamilton and Nanticoke, Ontario. The company informed Ottawa it is not violating its Investment Canada Act job commitments, countering an ultimatum from Industry Minister Mélanie Joly that threatened legal action.
Stelco has informed the federal government that it is not in violation of its Investment Canada Act (ICA) job commitments and is proceeding with planned layoffs of up to 500 workers in Hamilton and Nanticoke, Ontario. The company announced the workforce reductions on Sept. 28, citing an inability to compete in galvanized steel production due to the trade war.
The dispute stems from the federal government’s approval of Cleveland-Cliffs’ $3.4-billion acquisition of Stelco in 2024. That approval included legally binding conditions requiring the company to maintain unionized employee numbers for five years. In response to the announced layoffs, Industry Minister Mélanie Joly issued an ultimatum requiring Cleveland-Cliffs to map out a compliance plan within five business days or face possible legal action.
Stelco president Paul Simon pushed back against the minister's position in a response letter. Simon stated that the ICA undertakings do not stipulate a commitment to avoid layoffs, nor do they require employment levels above a certain amount on each day of the five-year period. To support this stance, Simon cited the Government of Canada’s Investment Canada Act Guidelines, which state that changes in circumstances may necessitate non-enforcement or renegotiation of undertakings.
Cleveland-Cliffs argues that the imposition of a 50-per-cent tariff on Canadian steel exports to the U.S. last year was an event out of its control. The company also points to foreign dumping as a factor reducing its ability to compete in the domestic galvanized steel market. In response to these pressures, Ottawa has imposed tariff-rate quotas and mandated that publicly funded projects use Canadian steel to crack down on foreign steel dumping.
As part of the restructuring, Stelco is idling its Hamilton Works operation. The company is offering laid-off workers the opportunity to apply for jobs at Lake Erie Works, though the local union stated that only 46 positions were available at that facility. Cleveland-Cliffs indicated it is prepared to call back laid-off workers if Ottawa reaches a "Fortress North America" trade pact with the U.S.