Hundreds of southern Ontario steelworkers facing layoffs will be recalled if Canada and the United States reach a trade deal on steel, the head of Stelco’s U.S.-based parent company said Thursday.
Lourenco Goncalves, chairman and chief executive of Ohio-based Cleveland-Cliffs, said the Canadian market is too small to support galvanized steel production from both Stelco and ArcelorMittal Dofasco, along with imports.
“There’s not enough orders there for us,” he said. “You can’t operate in an efficient and profitable way running at 50 or 55 per cent capacity. That’s what we have been facing with galvanized steel.”
He said he has spent more than a year and a half pushing Ottawa for stronger protections against foreign steel imports, arguing that measures adopted so far have helped the hot-rolled steel market but have not gone far enough to protect galvanized steel producers.
Stelco announced plans last week to lay off up to 500 workers across its Hamilton and Lake Erie facilities, citing the ongoing trade crisis, weak demand and continued import pressure.
Stelco’s Hamilton Works produces cold-rolled and galvanized steel. The company plans to idle both operations.
The company began issuing individual layoff notices in Hamilton on Wednesday, with about 90 workers expected to receive notices this week, said Ron Wells, president of United Steelworkers local 1005, which represents unionized workers at the Hamilton plant.
The first layoffs will take effect Sunday, with roughly 330 Hamilton workers expected to be affected over the next three weeks, along with additional cuts at Lake Erie Works and among co-op workers, Wells said.
“It’s a temporary layoff,” Goncalves said. “I do believe that one day we’re going to have a trade deal, I just don’t know when.
“Once this trade deal is reached and we’re back and able to produce and sell galvanized steel, we will bring back these people.”
Industry Minister Mélanie Joly sent a letter to Stelco president Paul Simon on Monday demanding a plan outlining how Cleveland-Cliffs will honour the legally binding commitments it made when it acquired the steelmaker in 2024.
The commitments include maintaining at least the same number of unionized employees and the vast majority of non-unionized employees for five years.
Joly rejected the suggestion that U.S. tariffs and changing market conditions relieve the company of those obligations, noting that Goncalves has publicly supported the tariffs.
Goncalves called her comments “totally unfair” and “just playing with words.”
While he described U.S. Section 232 tariffs as “the most successful policy implemented on trade in the United States ever,” he also argued that Canada should adopt similar protections for its own steel industry.
Goncalves said he has long advocated for “Fortress North America,” an approach aimed at protecting steelmakers in both countries from foreign imports, while restoring U.S. market access for Canadian galvanized steel.
“What would be the goal?” he said. “To protect the Canadian steel industry the same way we’re protecting the American steel industry, and the consequences are all positive.”
Goncalves said Cleveland-Cliffs will respond to Joly’s letter by Tuesday, within the five-business-day deadline set by the minister.
He said the company is preparing two submissions: one responding to Joly’s demand for a plan to meet its commitments and a second, more detailed document containing commercially sensitive information that he said would be protected under the Investment Canada Act.
He declined to disclose the contents of either submission.
Meanwhile, at Stelco’s Lake Erie Works in Nanticoke, Ont., John McElroy said between 40 and 50 workers could be laid off as early as Oct. 24 as the company reduces operations on its steel pickling lines.
Lake Erie Works produces steel from raw materials, including iron ore, and rolls it into coils that are sold to customers or sent to Hamilton for further processing and coating. Its pickling lines remove surface oxidation from hot-rolled steel.
“There’s no real good paying jobs out here and a lot of my co-workers are the breadwinner of the family,” said McElroy, president of United Steelworkers Local 8782, which represents unionized workers at the plant.
“They’re quite worried.”
McElroy said the union is working with management to reassign affected employees to other jobs normally performed by outside contractors.
Meanwhile, Wells said workers at the Hamilton plant feel betrayed.
“We feel we’re being used as pawns,” he said, referring to the ongoing trade dispute between Canada and the United States. “This is all done for political theatre.”
He added: “This is a manufactured crisis. They’re trying to get our federal government’s attention to get a favourable trade deal.”
Goncalves defended the layoffs as a temporary measure aimed at preserving more than 2,000 other jobs.
“I did not betray anyone,” he said. “I’m temporarily laying off 350 and I’m still hopeful that we’re going to have a trade agreement and I can bring these 350 workers back and continue to grow.”
This report by The Canadian Press was first published Oct. 8, 2026.
