Ottawa has set a deadline of five business days for the U.S. owner of Stelco to provide a plan to safeguard jobs at the Hamilton steelmaker or potentially face legal consequences. Cleveland-Cliffs, based in Ohio, recently announced intentions to lay off up to 500 workers as certain steel production at Stelco is halted, which the federal government deems a breach of the “binding commitments” made during its acquisition in 2024.
In a communication to Stelco’s president, Paul Simon, on Monday, Industry Minister Mélanie Joly stated that Ottawa is ready to pursue legal action to enforce the agreement under the Investment Canada Act. Joly emphasized the government’s dedication to upholding commitments and highlighted possible remedies for breaches, including court applications for directives like compliance enforcement, divestiture, or financial penalties.
Cleveland-Cliffs acquired Stelco in a $3.4 billion cash-and-stock deal, emphasizing the prioritization of national interests and recognition of workforce importance. According to Joly’s letter, the commitments include maintaining the same number of unionized and non-unionized employees as at the time of the acquisition announcement.
CEO of Cleveland-Cliffs, Lourenco Goncalves, defended the layoffs citing the Canada-U.S. trade war and the necessity for the company to comply with conditions related to selling steel to the U.S. Prime Minister Mark Carney affirmed Ottawa’s intent to utilize all available powers against Cleveland-Cliffs within legal boundaries.
Foreign takeover obligations under the Investment Canada Act typically span five years and encompass factors like investment levels, headquarters location, and employment levels. Failure to adhere to these commitments can prompt the minister to request an explanation before potential legal action.
In a related development, Ontario’s government pledged over $200,000 in collaboration with Ottawa through the Canada-Ontario Workforce Tariff Response to support steel and manufacturing workers in Hamilton. This funding aims to assist workers in skill enhancement and transitioning to high-demand careers.
Goncalves has voiced support for Trump’s steel and aluminum tariffs and emphasized backing for Canadian steelworkers. Trump recently highlighted a significant investment plan by Minnesota-based steelmaker Mesabi Metallics as validation of the effectiveness of his tariffs on imported steel.
