Ottawa has given Cleveland-Cliffs a 15-day deadline to reverse roughly 500 layoffs at Stelco’s Hamilton steel plant or face legal action. Industry Minister Melanie Joly delivered the ultimatum in a letter obtained by Global News.
The dispute centers on a 2024 employment agreement Cleveland-Cliffs signed with the federal government when it acquired Stelco. Under those terms, the company committed to maintaining employment levels across its Canadian operations through 2029.
Joly’s letter quotes CEO Lourenco Goncalves from the original business plan: “we have committed to no layoffs and to maintaining our Canadian management team.”
The agreement, now public for the first time through Joly’s correspondence, specifies that unionized employment in Canada would remain “no lower than 1,766” full-time equivalent positions. That figure represents 100 percent of the average annual employment during the 12 months ending June 30, 2024. A parallel provision covers 603 non-unionized employees, guaranteeing 90 percent of the previous year’s staffing levels.
Cleveland-Cliffs disputes the government’s reading. In an Oct. 9 response to Joly, the company argued the “undertakings do not stipulate a commitment to avoid layoffs” and contain no requirement for daily minimum employment thresholds over the five-year period.
Meanwhile, the company has blamed the layoffs on the Trump administration’s 50 percent tariff on Canadian steel, claiming “external factors beyond its control” forced the cuts. The company says displaced workers will receive job offers at its Lake Erie facility, though the union reports only 40 such offers have materialized.
Yet Goncalves told a U.S. Senate committee in January that Cleveland-Cliffs “barred Stelco from selling steel into the U.S.” after the 2024 purchase. He later told Politico his “fingerprints” were on the tariff increase, adding “I influenced that.”
Consequently, Joly now argues that the company’s tariff advocacy also violates the 2024 agreement, which required Cleveland-Cliffs to defend Canada’s exemption from Section 232 steel tariffs. Goncalves publicly rejected that stance in January, saying tariffs “must be maintained and not weakened with any exclusions.”
If the company refuses to reverse course, Joly warned the government will seek court intervention, potentially forcing a sale of the Canadian operations. However, a senior government source acknowledged that legal proceedings would move too slowly to protect Hamilton jobs, leaving officials searching for a faster resolution.
