Stelco Defies Ottawa's Legal Threats, Proceeds With Hamilton Layoffs

Hamilton-based steelmaker Stelco Inc. is moving forward with hundreds of layoffs at its Hamilton plant, ignoring threats of legal action from the federal government, as CBC News first reported.

Industry Minister Mélanie Joly previously issued an ultimatum demanding a plan to save up to 500 jobs or face potential legal consequences. In a letter to Joly obtained by CBC News, Paul Simon, president and general counsel at Stelco Inc., dismissed claims from the government that the company is breaching binding employment commitments under the Investment Canada Act (ICA). Simon argued that the undertakings do not require employment levels to remain above a specific amount or stipulate a commitment to avoid layoffs entirely.

Stelco, which is owned by Ohio-based Cleveland-Cliffs, attributed the decision to idle production lines to factors beyond its control, specifically the trade war and 50 per cent tariffs imposed by U.S. President Donald Trump. While the federal government claims Stelco refused financial support, the company alleged that Ottawa's offers did not address the root causes of the idling and that Minister Joly was "inaccurate and misleading" in suggesting the government only recently learned of the company's intentions.

Prime Minister Mark Carney has stated that Canada will use "all the powers" available to ensure the company meets its legal obligations. Joly's office maintained that commitments made during Cleveland-Cliffs' $3.4-billion acquisition of Stelco do not cease to apply due to market conditions.

Ron Wells, president of United Steelworkers Local 1005, told CBC News he was not surprised by the company's response, noting that the union was not consulted or privy to the original agreement. Stelco indicated that laid-off workers may have the opportunity to fill roles at its Lake Erie plant.