Stelco pushes back as Ottawa threatens legal action over up to 500 Hamilton-area steel layoffs

Stelco is proceeding with layoffs that could affect up to 500 workers at its Ontario operations even as Ottawa warns it may go to court to enforce job undertakings tied to the steelmaker’s 2024 foreign takeover. In a letter to Industry Minister Mélanie Joly obtained by news outlets, Stelco called federal claims that the cuts breach those commitments “false” and said it “stands ready to protect its interests.”

Global News reported that Stelco’s Oct. 9 response, signed by president and general counsel Paul Simon, said the company remains in compliance with the 2024 Investment Canada Act undertakings that accompanied Cleveland-Cliffs’ acquisition. “Your representation that Stelco’s planned layoffs cause it to breach its undertakings is false as the undertakings do not stipulate a commitment to avoid layoffs,” the letter said, according to Global News and CBC News.

Joly had given the U.S.-based owner five days to outline a plan to preserve jobs after Stelco announced it would idle cold-rolled and coated finishing lines at Hamilton Works and concentrate production at its Lake Erie Works in Nanticoke. In a statement after receiving Stelco’s reply, Joly said Canada still expects the company to meet “legally binding commitments to employees” and that those undertakings “do not cease to apply because of changing business strategy or market conditions.” “As our legal team reviews the Stelco letter, all options are on the table,” she said.

Stelco and other Canadian steelmakers have been hit by U.S. tariffs of 50 per cent on Canadian steel imports, cutting sales into the American market. Cleveland-Cliffs chairman and chief executive Lourenco Goncalves told Global News in late September the decision was market-driven and that financial incentives alone could not restore demand for galvanized steel produced in Canada. “There’s no market in Canada for the amount of galvanized steel we produce in Canada. We need to export… to the United States,” he said.

Joly has pointed to Goncalves’s public support for U.S. Section 232 steel tariffs while the company cites those same trade disruptions as a reason for the Hamilton cuts. Prime Minister Mark Carney previously said Stelco had “betrayed” Canadian workers and that Ottawa would use the powers available to it to enforce legal obligations, CBC News reported.

United Steelworkers Local 1005, which represents workers at Hamilton Works, said it was not consulted on the confidential Investment Canada Act undertakings and was not given a chance to review them. Local president Ron Wells said the union had been assured bargaining-unit employment levels would hold for five years. “Although we weren’t privileged to the signed agreement between Cliff’s and the Government, the response reeks of desperation,” Wells said in a statement carried by Global News.

Stelco’s letter argued Ottawa had advance notice of market stress dating back to July 2026 and that early September meetings with senior officials left the company believing the government understood the pressure on Hamilton’s finishing lines. The company also said its November 2025 annual compliance report flagged “unprecedented U.S. tariffs” and Canada’s failure, in Stelco’s view, to advance an effective “Fortress North America” trade regime.

The dispute is an early test of whether Investment Canada Act employment conditions attached to foreign takeovers can be enforced when market conditions shift. Layoffs have already begun rolling out over several weeks at Hamilton Works, union officials say, while Ottawa’s legal team reviews Stelco’s reply.

Sources: Global News (Oct. 12, 2026); CBC News (Oct. 10, 2026); CBC News Hamilton (Joly warning); United Steelworkers letter to Minister Joly (Oct. 2026).

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