[ad_1]Open this photo in gallery:Stelco said on Sept. 28 that it was laying off up to 500 workers in Hamilton and Nanticoke, Ont. Peter Power/ Ontario ChronicleStelco Inc. has notified Ottawa that it is not violating its job commitments under the Investment Canada Act, and it is continuing with planned layoffs across Canada.The company, owned by U. S. steelmaker Cleveland-Cliffs Inc., announced on Sept. 28 that it would be laying off up to 500 employees in Hamilton and Nanticoke, Ont., explaining that it couldn't compete in galvanized steel due to the ongoing trade war.When the federal government approved Cliffs' $3.4-billion acquisition of Stelco in 2024, it set legally binding conditions that required maintaining at least the same number of unionized workers in Canada for five years, along with most non-unionized staff.On Monday, Industry Minister Mélanie Joly issued an ultimatum to the Cleveland-based company, demanding a plan within five business days for meeting its employment obligations under the Investment Canada Act or face potential legal action.In a response letter obtained by Ontario Chronicle, Stelco president and general counsel Paul Simon informed Ms. Joly on Friday that they are not breaching their commitments, referencing a legal clause related to these promises as well as the government's own ICA guidelines.“Your representation that Stelco’s planned layoffs cause it to breach its undertakings is false,” Mr. Simon wrote. “As 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.”He further explained that the spirit of ICA allows flexibility for layoffs under unforeseen circumstances.“Throughout the history of the Investment Canada Act and its predecessor foreign investment acts, it has consistently been understood that changes in circumstances may necessitate the non-enforcement or renegotiation of undertakings,” he stated. “This decades-old principle is set out in the Government of Canada’s Investment Canada Act Guidelines - Administrative Procedures: Monitoring of Investments.”Ms. Joly's office did not respond immediately to requests for comment.Stelco’s exit from galvanized steel leaves big Canadian buyer baffled and in the lurchCliffs argues that last year's imposition of a 50-percent tariff on Canadian steel exports to the U. S. was something beyond their control.In response to Ms. Joly's request for Cliffs to provide a plan, Mr. Simon mentioned that due to their inability to profitably produce galvanized steel any longer, they are moving forward with idling their Hamilton Works operation. He added that laid-off workers could apply for positions at Lake Erie Works; however, only 46 positions were available there according to local union officials.Ron Wells, president of United Steelworkers Local 1005 expressed his disappointment over Cliffs’ decision but noted he wasn't surprised by it.“It’s not shocking that they are trying to weasel out of the agreement,” he commented.Mr. Wells now wants Ottawa to follow through on its threats and take legal action against Cliffs.“I’m sure if it went to court, and hopefully it does, the federal government would prevail,” he remarked.There is precedent for such actions from past cases involving this same Canadian steelmaker. U. S Steel made commitments under Canada's Investment Act regarding jobs after acquiring Stelco back in 2007. When financial issues arose during crises like those around 2008 , U. S Steel ended up laying people off. Following this , the Canadian government took them court alleging breaches regarding legally bound agreements. A settlement reached Involving new commitments made from U. S Steel including production levels & investments within canadaclass=c article body __TEXT TEXT PR - Five >>c L i ffs has said they’re ready call back laid off workers immediately if Ottawa can secure “Fortress North America” trade pact with u. s while being clear about how government needs step up efforts combat foreign dumping affecting competitiveness>][ ad_2]Source link
