Stelco proceeds with layoffs despite Canadian government legal threats

Stelco is proceeding with planned layoffs in Hamilton and Nanticoke, Ontario, despite pressure and legal threats from the Canadian federal government. The company, owned by U.S.-based Cleveland-Cliffs Inc., maintains that the job cuts do not violate the commitments made under the Investment Canada Act.

When Ottawa approved Cleveland-Cliffs’ $3.4-billion acquisition of Stelco in 2024, binding conditions were attached requiring the company to maintain existing levels of unionized and most non-unionized employees for five years. Industry Minister Mélanie Joly issued an ultimatum for the company to explain how it would meet these guarantees or face potential legal action.

Stelco’s president and general counsel, Paul Simon, responded that the undertakings do not mandate the avoidance of layoffs and that changing circumstances may require renegotiation. The company cited the inability to profitably produce galvanized steel as the reason for laying off up to 500 workers. Stelco has suggested that instead of job guarantees, the government should focus on imposing restrictions on steel imports and ending remissions for products that Canadian producers can supply.