Ottawa Issues Five-Day Ultimatum to Stelco Owner Over Hamilton Layoffs

The federal government has given the U.S.-based owner of Stelco five business days to present a plan to maintain employment at its Hamilton facility or face potential legal action, according to CBC News.

Ohio-based Cleveland-Cliffs recently announced plans to lay off up to 500 workers as it idles specific steel production. Industry Minister Mélanie Joly stated in a letter to Stelco president Paul Simon that these cuts violate "binding commitments" made during Cleveland-Cliffs' $3.4-billion cash-and-stock acquisition of the company in 2024. Those undertakings included maintaining the same number of unionized employees and the vast majority of non-unionized staff as were employed at the time of the transaction.

Joly warned that Ottawa may seek a court ruling under the Investment Canada Act, which could result in monetary penalties, divestiture, or orders for compliance. Prime Minister Mark Carney has stated that the government will use all available powers to pursue the company to the "fullest extent of the law."

Cleveland-Cliffs CEO Lourenco Goncalves has defended the layoffs as necessary due to the Canada-U.S. trade war, citing the company's ability to sell steel to the U.S. as an "underlying condition" of the original deal. Goncalves has expressed support for President Trump's Section 232 measures, which impose tariffs of up to 50 per cent on Canadian steel and aluminum imports.

In response to the instability, Ontario's minister of labour, immigration, training and skills development, Trevor Jones, announced a provincial investment of more than $200,000 into the Canada-Ontario Workforce Tariff Response. The funding is intended to help 75 workers and jobseekers in the Hamilton area retrain and transition into new careers.