OTTAWA – Industry Minister Mélanie Joly has sent a second letter to Stelco, demanding the steelmaker reverse its layoffs or provide detailed responses that justify its non-compliance under the Investment Canada Act.
Joly gave Stelco’s president Paul Simon 15 days to comply or face legal action.
Stelco is owned by Ohio-based Cleveland-Cliffs Inc., which signed several undertakings when the acquisition was approved in 2024 under the ICA, which included a commitment to maintain the same number of unionized employees for a period of five years.
Last month, the company confirmed it intended to lay off 500 workers at its Hamilton plant and Lake Erie Works in Nanticoke, Ont. Cliffs CEO Lourenco Goncalves has cited U.S. tariffs as the reason for the “temporary” job cuts.
“In the event Cliffs fails to comply with this demand, the Minister may, pursuant to section 40 of the Act, make an application to the superior court,” the letter read.
The letter also took aim at several instances where Goncalves has endorsed U.S. President Donald Trump’s Section 232 tariffs, which amount to 50 per cent on Canadian steel and aluminum.
Prime Minister Mark Carney has called the layoffs a “betrayal” to Stelco workers.
In an interview with CBC News earlier this month, Goncalves disputed the government’s claims.
“There is no provision in the contract that I have to keep employment at a certain level every single day of the five years,” he said. “If that was an imposition of the Canadian government, I would not have accepted.”
Joly’s letter demands that if the company would like to contest or justify non-compliance, it must provide monthly employment numbers for unionized and salaried employees from Nov. 1, 2023, to October 2026.
The letter outlined possible outcomes of court action including Cliffs’ divestiture from Stelco, a directive to comply with the undertakings, a penalty of $10,000 each day Cliffs is not in compliance or suspending Cliffs’ voting rights in the company.
This is the second letter Joly has sent to the company, after receiving a response on Oct. 9.
Joly’s letter on Wednesday also disputed that Cliffs was unaware of the possibility of U.S. tariffs when it acquired Stelco and signed onto to its commitments.
“The possibility of tariffs on Canadian steel was foreseeable in October 2024, and the Undertakings specifically reflect that possibility,” the letter said. “However, Cliffs’ Chief Executive Officer subsequently advocated for the very tariffs that Cliffs is now relying on as a basis for non-compliance with the Undertakings.”
When asked on Wednesday why his government hasn’t taken Cliffs to court yet, Carney said they are following the legal process.
“There’s also an opportunity, of course, for the company to respect their commitments, and of course we’re happy to sit down and work with them,” he said.
National Post
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