Joly asks Competition Bureau to probe Cleveland-Cliffs CEO comments on Stelco

Canadian Industry Minister Mélanie Joly has asked the Competition Bureau to investigate whether recent comments by Cleveland-Cliffs Inc. CEO Lourenco Goncalves about his motives for buying Canadian steelmaker Stelco Inc. warrant enforcement action.

In a CBC interview on Oct. 27, Mr. Goncalves said he bought Stelco because he couldn’t afford to have it “flooding the market here in the United States to the detriment of my own company.”

In a letter obtained by The Globe and Mail, Ms. Joly asked interim competition commissioner Jeanne Pratt to investigate the matter. “This type of conduct is highly questionable and may be reviewable under the Competition Act,” she said.

The letter is the latest move by the federal government to pressure Cliffs to recall laid-off steel workers in Hamilton. In late September, Stelco announced it was cutting up to 500 jobs in Canada because of its inability to make money in its galvanized-steel business. Mr. Goncalves said last week that 175 people have been laid off so far in Canada, and no more cuts are planned. He said workers could be back on the job by Christmas, depending on sufficient domestic procurements of steel.

Ms. Joly has repeatedly alleged that Cliffs is in violation of legally binding commitments it made at the time of the 2024 Stelco acquisition concerning specific employment levels. In multiple letters and public appearances, she has warned the company that the government could sue Cliffs, which could force it to pay financial penalties or divest Stelco.

The Competition Bureau is an independent law enforcement agency that enforces the Competition Act. Its mandates include ensuring a healthy and competitive domestic marketplace and preventing individual companies from becoming too powerful in order to protect consumers. A spokesperson for the bureau confirmed it has received Ms. Joly’s letter but declined to provide additional information or confirm whether it is investigating, citing confidentiality constraints.

Government and company positions

Ms. Joly said in her letter that “at minimum, Mr. Goncalves’ statements indicate his company’s disregard for the importance of fair competition in the marketplace, and the important role that competition policy plays in delivering greater choice and affordability for consumers.”

Cliffs is adamant that it is complying with the promises it made as a condition for acquiring the Canadian steelmaker. The company said it expects to report to Ottawa that Stelco’s annual employment numbers for both its unionized and non-unionized work force will be well above the minimum required. Cliffs did not respond to a request for comment on the letter.

Cleveland-Cliffs has maintained that one of the reasons for the layoffs is the 50 per cent tariff on aluminum and steel imposed by the U.S., which the company’s leadership has publicly supported.

Political reaction

Prime Minister Mark Carney said last month that Cleveland-Cliffs would be making a “mistake” by not respecting its obligations and commitments. After the layoffs were announced, Mr. Carney said Cliffs had “betrayed” its work force.

The Official Opposition says that Ms. Joly isn’t doing enough to hold Cliffs’s feet to the fire and believes her tactics aren’t working. In an e-mail to The Globe, MP Michael Guglielmin, chair of the Conservative steel caucus, said that despite multiple warning letters sent by Ms. Joly to Cliffs, the layoffs haven’t been reversed. “Now she’s sending a fourth letter, shifting accountability to the competition commissioner,” he said. “Conservatives called on the minister to sue weeks ago. File the lawsuit, save Canadian jobs.”

Why it matters

The dispute between Ottawa and Cleveland-Cliffs over the Stelco acquisition has lasted more than a month. The outcome of the Competition Bureau review could affect whether the company faces enforcement action under the Competition Act, and whether the federal government pursues legal action that could force Cliffs to pay financial penalties or divest Stelco.

---

Sources

• theglobeandmail.com: Joly asks Competition Bureau to probe comments from Cliffs CEO about Stelco acquisition - The Globe and Mail
• globalnews.ca: Joly seeks Competition Bureau probe of Stelco as more layoffs loom | Globalnews.ca
• ca.finance.yahoo.com: Mélanie Joly asks Competition Bureau to probe Cleveland-Cliffs' $3.4B Stelco takeover after CEO's 'shocking admission'

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.