Cleveland-Cliffs reported that Stelco had its most robust performance in the third quarter of this year since being acquired by the U.S. firm in 2024. Despite this, a significant number of employees at the steel company in Ontario are facing job cuts in Hamilton and Nanticoke. Layoff notifications began earlier this month and are ongoing.
In a statement on Monday, Cleveland-Cliffs CEO Lourenco Goncalves highlighted the strength of Stelco’s recent performance, attributing it to improvements in the Canadian hot-rolled market. However, Goncalves emphasized the need for the Canadian government to address the oversupply issues in the galvanized steel market in the country.
Stelco Holdings Inc. announced plans on September 28 to idle a portion of its Hamilton facility to secure the company’s sustainability amid challenges from U.S. tariffs impacting its sales. Union representatives revealed that approximately 333 workers in Hamilton and up to 50 employees at the Lake Erie Works in Nanticoke are expected to be laid off.
During an earnings call, Goncalves praised U.S. President Donald Trump’s trade policies, stating that they are fostering an environment conducive to investments and expansion in local communities. Despite citing tariffs as a contributing factor to economic challenges, Goncalves noted that steel sales are currently thriving under the most favorable pricing conditions in three years.
Goncalves credited the success of the hot-rolled steel business to Canada’s tariff-rate quota system, which limits the volume of imported products. He reiterated Stelco’s stance that the layoffs are temporary until trade negotiations between Canada and the U.S. are resolved.
The federal government underscored Cleveland-Cliffs’ commitment to maintaining employment levels as agreed upon during the acquisition of Stelco. Industry Minister Mélanie Joly warned that any deviation from these commitments, particularly due to business decisions or market changes, would not be tolerated.
Goncalves expressed concern over the exposed Canadian market and urged the government to restrict the influx of galvanized steel imports, suggesting that doing so would enable Stelco to rehire laid-off workers promptly. He also mentioned a willingness to sell Stelco and confront legal challenges from the Canadian government to uphold the layoff plan.
In response to the situation, Minister Joly stated that Ottawa is exploring legal avenues against Cleveland-Cliffs under Section 40 of the Investment Canada Act, which could involve penalties, court orders for compliance, or asset divestitures.
Union representatives criticized Goncalves’s messaging, describing it as perplexing and contradictory to Stelco’s reported profitability. They emphasized the need for Minister Joly to enforce the Investment Canada Act and questioned the advocacy for reducing imports given Cleveland-Cliffs’ significant role as a steel importer to Canada.
