Cleveland-Cliffs faces legal threats over Stelco layoffs in Canada

The Canadian government and the United Steelworkers union are challenging Cleveland-Cliffs following the announcement that Stelco will indefinitely idle finishing operations at its Hamilton, Ontario, plant. The move is expected to affect up to 500 workers.

Prime Minister Mark Carney has threatened legal action against the American parent company, stating that workers and their families have been ‘betrayed’ and accusing the group of breaking contractual commitments. When Cleveland-Cliffs acquired Stelco in 2024, the deal was approved under the Investment Canada Act with mandatory five-year commitments to maintain existing levels of unionized employment.

Cleveland-Cliffs has attributed the decision to weaker demand and pressure from steel imports, specifically citing the impact of 50 per cent tariffs on Canadian steel. However, the United Steelworkers union has called this rationale ‘disingenuous and contradictory,’ noting that Cleveland-Cliffs CEO Lourenco Goncalves has publicly supported and claimed influence over those very tariffs.

While Stelco intends to concentrate production at its Nanticoke plant, the union reports that only a small fraction of the affected Hamilton workers have been offered positions there. Legal experts note that while the Investment Canada Act allows for exceptions if non-compliance is caused by factors ‘clearly beyond the control of the investor,’ the government may pursue court orders or penalties if the company is found to be in violation of its undertakings.