OTTAWA—The Carney government wrote Stelco Monday night to demand that the company provide a plan within five days for how it will maintain jobs in Canada as promised, reinforcing the threat that it would face legal action if it failed to act.
Industry Minister Mélanie Joly, in a letter to Stelco president Paul Simon, said the federal government is prepared to seek a court ruling to enforce what it says were legally binding commitments that the company made just two years ago which Ottawa does not consider subject to the whims of the market.
Joly’s letter, obtained by the Star, said the company’s plan to idle part of its operations at Hamilton Works would be “inconsistent with key undertakings offered” in 2024 when the government of Canada conducted a foreign investment review and approved the takeover of Stelco by U.S.-based Cleveland-Cliffs.
That approval stipulated Stelco would “continue to employ at least the same number of unionized employees and the vast majority of non-unionized employees as were employed when the transaction was announced,” wrote Joly.
Stelco announced last week it would lay off up to 500 steelworkers at its Hamilton and Lake Erie operations, with a certain number of those being potentially eligible for other jobs.
“Undertakings given under the Act are binding commitments and do not cease to apply simply because business strategy or market conditions have changed,” Joly said.
“This is particularly relevant here, where Cleveland-Cliffs has cited trade disruptions as affecting its operations at Hamilton Works, notwithstanding its Chief Executive Officer’s public support for Section 232 tariff measures,” Joly added, specifically laying blame at the feet of U.S. President Donald Trump’s tariffs — tariffs supported by the company CEO Lourenco Goncalves.
Prime Minister Mark Carney had made the same observation last week when he said the company had “betrayed” Canadian workers.
Joly said Stelco had not sought any support from federal programs aimed at shielding Canadian workers and employers during the tariff war, which she said were “designed to preserve jobs and maintain operations.”
Ottawa provides financial aid via loans, and tariff relief through a remissions program, to support, for example, producers who face U.S. tariffs of 50 per cent on Canadian-made steel. Trump has levied that punishing duty on global imports of steel and aluminum, and a tariff of 25 per cent on autos.
The industry minister emphasized the federal Liberal government takes the question of the company’s compliance with its jobs promises “seriously,” and that the “binding commitments formed the basis” of the government’s approval.
She noted the Investment Canada Act provides options for dealing with any breaches, and that includes resorting to a lawsuit in court “for orders that may include directing compliance, divestiture, or monetary penalties.”
Last week, United Steelworkers national Canadian director Marty Warren and local union executives demanded that Ottawa force the company to live up to its obligations, but also blamed historical government failures to protect Canada’s steel-producing capacity.
The actual text of the agreement between Cleveland-Cliffs and the Liberal government is not public, but a ministerial statement at the time summarized what then-minister François-Philippe Champagne said was the basis for the approved foreign takeover.
Those included what Ottawa then called a “significant package of binding, five-year-long undertakings.”
It specified that Stelco would continue to operate under that name and — as Joly cited — a promise “to employ at least the same number of unionized employees and the vast majority of non-unionized employees as were employed when the transaction was announced.”
The Star was unable to immediately reach Stelco or Cleveland-Cliffs officials for comment.
