The government in Ottawa is looking into various legal options against Stelco’s American owner after the company turned down the government’s request to stop planned layoffs at the Hamilton steelmaker, Federal Industry Minister Mélanie Joly stated on Wednesday.
While speaking with reporters in Ottawa, Joly mentioned that the government is reviewing a letter from Cleveland-Cliffs and remains committed to enforcing the employment promises made when it acquired Stelco in 2024.
“We expect Stelco to follow the undertakings that they’ve committed to,” Joly said.
“Right now, a business decision or even a change in market conditions cannot be used to not follow their commitment.”
Joly indicated that the government is considering its options under Section 40 of the Investment Canada Act, which might involve financial penalties, a court order mandating compliance with commitments or an order requiring it to divest its Canadian assets.
“Everything is on the table.”
Speaking with reporters in Ottawa, Federal Industry Minister Mélanie Joly said the government remains determined to enforce the employment commitments Cleveland-Cliffs made when it purchased Stelco in 2024. (CBC)
The minister did not reveal whether legal action would be initiated or provide any timeline for a decision. She stated that Ottawa continues communication with both the company and the union representing Stelco employees.
“I’m always open to sit down with the company and find a solution, but we’re looking at everything that is possible to keep jobs in Canada,” Joly said.
She also called the situation at Stelco “unacceptable.”
These remarks followed Cleveland-Cliffs CEO Lourenco Goncalves’ statement indicating that layoffs would move forward despite Ottawa’s caution about potential violations of purchase terms related to Stelco.
Cleveland-Cliffs had committed to maintaining at least current levels of unionized employees along with most non-unionized workers for five years following their acquisition announcement in 2024.
However, Goncalves has challenged how those commitments are interpreted, claiming they do not require maintaining daily employment levels throughout that five-year period. He described these layoffs as temporary and suggested jobs would return once trade agreements are reached between Canada and the United States.
The company has also cited U. S. President Donald Trump’s tariffs on Canadian steel as influencing its decision-making process.
Layoffs Already Happening
Ron Wells, president of United Steelworkers Local 1005, which represents workers at Stelco, reported that layoffs have already begun affecting members.
During an interview on CBC Radio’s Metro Morning on Wednesday, Wells shared that last week saw 90 workers laid off, with another 85 expected by week’s end. More layoffs are anticipated over coming weeks.
The union estimates around 300 to 350 jobs could be lost in Hamilton alone, with additional cuts likely at Stelco’s Lake Erie Works located in Nanticoke, Ont.
WATCH | Stelco owner open to selling company amid fight with Ottawa over layoffs:<img src="https://ontariochronicle. ca/wp-content/uploads/2026/10/1791772196_869_default. jpg" alt="" class="thumbnail" loading="lazy"/
Stelco owner open to selling company amid fight with Ottawa over layoffs
Lourenco Goncalves, CEO of parent company Cleveland-Cliffs talks with CBC’s Rosemary Barton after his company’s formal response concerning federal legal threats regarding job cuts at their Hamilton plant. In correspondence obtained by , Stelco asserts it’s not breaching employment commitments.Wells contended that Cleveland-Cliffs isn’t upholding its job commitments and urged federal officials pursue legal avenues against them.He cautioned these consequences may extend beyond just steelmaking since other manufacturers rely heavily upon products from Stelco.”Steel is essentialto thesupplychain,” Wells warned stating disruptions could impact industries producing everything from appliancesand garden sheds topartsfor automobiles.Calls for Public Ownershipof Stelc oThe dispute has sparked discussions about potentially nationalizingthe steelmaker.Federal NDP Leader Avi Lewisand Ontario NDP Leader Marit Stiles have urgedthe federalgovernment consider taking control of Stelcosa s court actions might take too long protect workersand Canada’ssteelmaking capabilities.Stiles also asked Ontario Premier Doug Ford workwith Ottawato promote publicownershipand Canadian managementwhile pressingtheprovincefor tariff reliefand adoptinga “Buy Ontario First procurement strategy.”Prime Minister Mark Carney previously remarkedthat appropriate action will be takenafter receiving andreviewingthe company’sresponse Jolydemanded.
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