Ottawa warns Stelco owner to protect jobs or face forced sale

Industry Minister Mélanie Joly has issued a stern warning to Cleveland-Cliffs, the American owner of Stelco, stating that the company must protect Canadian jobs or face the prospect of being forced to sell its assets in Canada. Speaking at the Canadian Club in Toronto on Friday, Joly described Cleveland-Cliffs’ support for U.S. tariffs as "the elephant in the room," noting that these measures are harming Canadian operations and putting hundreds of jobs at risk at Stelco’s Hamilton plant.

Legal Commitments and Potential Penalties

Joly asserted that Ottawa "continues to expect that Stelco meet its legally binding commitments." The government insists that recent decisions violate pledges Cleveland-Cliffs made under the Investment Canada Act when it acquired Stelco in 2024, specifically the commitment to protect Canadian jobs. "Cleveland Cliffs must uphold its commitments. Full stop," Joly said. She added, "We will apply the full force of the law and every tool in the toolbox to ensure that this strategic capacity remains operational, and they must keep the jobs in Canada or face the prospect of having to sell their Canadian assets."

Earlier in the week, Joly told reporters that "everything is on the table," including financial penalties and potential forced divestment. She emphasized that "a business decision, or even a change in market conditions, cannot be used to not follow the commitment."

Layoffs and Company Response

The warning follows the distribution of layoff notices to unionized workers at Stelco’s Hamilton plant as the company moves to idle its cold mill and coating departments. Last month, Cleveland-Cliffs announced it would shut down parts of the Hamilton operation, citing low steel prices and tariffs imposed by U.S. President Donald Trump. The move is expected to affect up to 500 jobs.

Cleveland-Cliffs CEO Lourenco Goncalves defended the layoffs in an interview with BNN Bloomberg, describing them as a "business decision to concentrate production." He stated, "Stelco is having a great year, we are making money, the Canadian market continues to react positively to things that we are doing." Goncalves characterized Joly’s comments as "bullying and harassment" and maintained that the company had not violated the deal made with former industry minister Francois-Philippe Champagne. He added that the job cuts are "temporary" and that he intends to rehire the laid-off workers.

Why it matters

The dispute highlights the tension between corporate operational decisions and federal industrial policy. Joly noted that "Stelco’s Hamilton plant produces steel essential to our advanced manufacturing industrial base," underscoring the strategic importance of the facility to Canada. While the minister’s comments stopped short of explicitly stating that Ottawa was prepared to take an ownership stake in Stelco, the threat of forced divestment signals a significant escalation in the government’s approach to enforcing investment conditions.

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Sources

• ctvnews.ca: Stelco: Ottawa warns owner over Hamilton layoffs
• thestar.com: Joly warns Stelco owner to protect jobs or face forced sale of Canadian assets

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