Cleveland-Cliffs’ Stelco says Hamilton layoffs will proceed as Ottawa weighs legal action

Stelco, the Hamilton, Ontario, steelmaker owned by Cleveland-based Cleveland-Cliffs Inc., has told the Canadian government it will go ahead with layoffs at its Hamilton plant despite a threat of legal action from Ottawa. CBC News reported on October 10 that it had obtained a letter to Industry Minister Mélanie Joly from Stelco president and general counsel Paul Simon; Crain’s Cleveland, citing Bloomberg, reported on October 12 that Stelco had informed the government it would move ahead with hundreds of layoffs.

The dispute traces to Cleveland-Cliffs’ 2024 purchase of Stelco, which Cliffs said had an enterprise value of about US$2.5 billion (C$3.4 billion) and which closed November 1, 2024. According to Joly’s letter as described by CBC, Stelco gave undertakings under the Investment Canada Act to keep at least the same number of unionized employees and the vast majority of non-unionized employees; the Canadian Press said those commitments run for five years.

Stelco announced plans in late September to idle finishing lines at its Hamilton plant. The Canadian Press reported that the company said it would lay off up to 500 workers across its Hamilton and Lake Erie sites, citing trade conditions, weak demand and import pressure. According to the United Steelworkers local, notices began going out on October 7, and roughly 330 Hamilton workers are expected to be affected over three weeks, with the first layoffs effective Sunday, October 11. Cleveland-Cliffs chairman and chief executive Lourenco Goncalves described the layoffs as temporary and said the workers would be recalled if Canada and the United States reach a steel trade deal.

Joly demanded a plan to meet the commitments or face possible legal action. Stelco’s reply, as quoted by CBC, calls the claim of a breach “false”: “the undertakings do not stipulate a commitment to avoid layoffs, nor do they include a requirement that employment levels be above a certain amount on each day of the five years of the undertakings.” The company blames factors “beyond its control,” including U.S. tariffs, says Ottawa’s offers of financial help did not address the root cause, and says it was in regular contact with the government. It said some laid-off workers could be offered open positions at its Lake Erie plant and that it wants Canada to restrict imports of cold-rolled and coated steel.

Joly’s office responded that the government “still expects” Stelco to “meet its legally binding commitments to employees,” which it said “do not cease to apply because of changing business strategy or market conditions,” and that “all options are on the table.” United Steelworkers Local 1005 president Ron Wells said the union was never shown the undertakings and was not consulted.

Sources