Cleveland Cliffs Defends Stelco Layoffs Amid Ottawa Legal Threat

Cleveland-Cliffs CEO Lourenco Goncalves said Sunday that the company will challenge Canada in court if needed over Stelco layoffs affecting up to 500 workers at Hamilton and Lake Erie facilities, after Ottawa threatened legal action over employment commitments tied to the 2024 acquisition. Industry Minister Mélanie Joly said the acquisition included commitments to maintain unionized employment levels and most non-unionized positions through 2029. Stelco said it is proceeding with layoffs while disputing that interpretation. According to CBC News, Goncalves argued the Investment Canada Act commitments do not require constant employment levels during the five-year period.

"There is no provision in the contract that I have to keep employment at a certain level every single day of the five years," said Lourenco Goncalves, CEO of Cleveland-Cliffs.

Goncalves continued defending the company's interpretation of the agreement and said he would not have accepted the deal under different conditions. "If that was an imposition of the Canadian government, I would not have accepted," said Lourenco Goncalves, CEO of Cleveland-Cliffs.

Prime Minister Mark Carney said Ottawa would pursue available legal measures after the company moved forward with the planned cuts. "use all powers that we have" said Mark Carney, Prime Minister.

Carney also said the government would continue its legal response against Cleveland-Cliffs. "fullest extent of the law" said Mark Carney, Prime Minister. Stelco president and general counsel Paul Simon told Ottawa that the company does not believe it breached its obligations under the Investment Canada Act, citing changing market conditions and U.S. steel tariffs.

"Your representation that Stelco’s planned layoffs cause it to breach its undertakings is false," wrote Paul Simon, Stelco president and general counsel.

Simon said the commitments did not contain a requirement to prevent layoffs under all circumstances. "The undertakings do not stipulate a commitment to avoid layoffs, nor do they include a requirement that employment levels be above a certain amount on each day of the five years of the undertakings," wrote Paul Simon, Stelco president and general counsel. The federal government said it is reviewing Stelco's response and has not ruled out further action.

"As our legal team reviews the Stelco letter, all options are on the table," said Mathis Denis, director of communications for Mélanie Joly.

Stelco said it is idling parts of its Hamilton Works operation because it cannot compete in the galvanized steel market, while affected workers may apply for available positions at Lake Erie Works. United Steelworkers Local 1005 president Ron Wells said the union expected the layoffs and wants Ottawa to enforce the commitments made during the acquisition.

"It’s not shocking that they are trying to weasel out of the agreement," said Ron Wells, president of United Steelworkers Local 1005. Wells said he believes the dispute should proceed through the courts if the federal government decides to act.

"I’m sure if it went to court, and hopefully it does, the federal government would prevail," said Ron Wells, president of United Steelworkers Local 1005. Goncalves said he remains open to selling Stelco if a suitable offer is made and said he believes the company can continue operating in Canada. "For a good offer, yes," said Lourenco Goncalves, CEO of Cleveland-Cliffs.

He added that the company still has a long-term role in the Canadian market.

"continue to be a good citizen in Canada" said Lourenco Goncalves, CEO of Cleveland-Cliffs. Goncalves said trade tensions changed the circumstances surrounding the company’s ownership decision. "would not have acquired the Stelco if I knew that Canada and the United States would become what they became — enemies in trade" said Lourenco Goncalves, CEO of Cleveland-Cliffs.

The CEO also defended U.S. steel tariffs despite Stelco citing tariffs as a reason for its difficulties.

"I am in favour of tariffs against all the countries in the entire world that dump steel into the United States," said Lourenco Goncalves, CEO of Cleveland-Cliffs. He said the tariffs had strengthened U.S. steel producers.

"the American steel industry back" said Lourenco Goncalves, CEO of Cleveland-Cliffs. Goncalves reiterated his support for the U.S. tariff policy.

"I'm in favour of Section 232. There's no doubt about it," said Lourenco Goncalves, CEO of Cleveland-Cliffs. A Stelco employee who received a layoff notice called for a written plan addressing workers' concerns about future operations. "What steps will you take to protect jobs, support our families and provide a path back to work?" said Jordan Williams, Stelco employee.

Williams said the impact extends beyond the steel plant and affects surrounding communities.

"These layoffs reach beyond the plant gates and into the businesses and neighbourhoods that depend on Hamilton industry," said Jordan Williams, Stelco employee. Ron Wells said he wants the federal government to hold the company accountable for the employment commitments. "I hope, basically, the federal government makes an example out of them," said Ron Wells, president of United Steelworkers Local 1005.

The layoffs are expected to continue in stages over about three weeks, with the union estimating roughly 300 to 350 Hamilton workers affected and additional reductions at Lake Erie Works.