Stelco Defies Ottawa's Legal Threats to Proceed With Hamilton Layoffs
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The steelmaker argues that market conditions and U.S. tariffs justify job cuts, claiming its employment agreements do not prohibit layoffs.
Stelco is moving forward with laying off up to 500 workers at its Hamilton plant, despite warnings of legal action from the Canadian federal government. The dispute centers on employment commitments made under the Investment Canada Act (ICA) when U.S.-based Cleveland-Cliffs acquired Stelco in 2024.
Industry Minister Mélanie Joly issued an ultimatum to Cleveland-Cliffs, demanding a plan to preserve union and non-union jobs or face potential legal action. Prime Minister Mark Carney has stated that Ottawa will use all available powers to ensure the company meets its legal obligations, accusing Stelco of "betraying" workers.
In a letter to Joly written by Stelco president and general counsel Paul Simon, the company rejected these accusations as "false." Simon argued that the ICA undertakings do not stipulate a commitment to avoid layoffs, nor do they require specific employment levels on any given day. Stelco maintains it remains in compliance with the 2024 agreement.
Stelco attributes the layoffs to "unprecedented market conditions," specifically 50 per cent U.S. tariffs on Canadian steel imports. Lourenco Goncalves, chairman and CEO of Cleveland-Cliffs, told Global News that the decision is market-driven, noting a lack of demand in Canada for the volume of galvanized steel produced in Hamilton. While the federal government claims Stelco refused financial support, Stelco alleges that Ottawa's offers did not address the root causes of the crisis.
Ron Wells, president of USW Local 1005, noted that the union was not consulted nor privy to the original ICA agreement. Stelco has suggested that displaced workers could potentially fill open roles at its Lake Erie plant.