Federal Industry Minister Mélanie Joly says the government will force a sale of Stelco’s Canadian operations if planned layoffs aren’t rescinded — and she didn’t rule out Ottawa taking a stake.
“They must keep the jobs in Canada or face the prospect of having to sell their Canadian assets,” Joly warned U.S.-based Cleveland-Cliffs in a speech to the Canadian Club in Toronto Friday.
It was a firmer stance than Wednesday, when Joly said a forced sale was just one of the options that the government was considering to get Stelco to cancel plans to lay off 500 workers.
Earlier in her remarks, about reinforcing Canada’s industrial base amidst a trade war sparked by U.S. president Donald Trump’s tariffs, Joly also suggested the federal government would consider taking equity stakes in companies in order to protect manufacturing capacity and jobs.
“We must ensure that strategic production capabilities remain here at home. We will provide financing and take equity positions to do what is right in these dire times for workers and businesses,” said Joly.
The government has previously threatened legal action, saying the layoffs break commitments made by Cleveland-Cliffs under the Investment Canada Act when it bought Stelco in 2024.
Thursday, in an interview with BNN Bloomberg, Cleveland-Cliffs CEO Lourenco Goncalves accused the federal government of “bullying and harassment” in its response to the Stelco layoffs.
Goncalves claimed he intends to rehire the laid off workers, calling the job cuts “temporary.”
“Stelco is having a great year, we are making money, the Canadian market continues to react positively to things that we are doing,” he said.
Goncalves also compared potential Canadian government action to the regime of former Venezuelan dictator Hugo Chavez, noting Chavez nationalized Venezuela’s steel industry in 2008.
“We are not in Canada to lay off people, we believe in the workforce, we believe in the market, we believe that Canada is a country of laws,” Goncalves said. “I don’t think that Canada is Venezuela, let alone Venezuela under Hugo Chavez.”
It’s a far cry, Goncalves argued, from when Cleveland-Cliffs was considering buying Stelco and Canada “rolled out the red carpet.”
“We did not expect less than two years after we acquired the company to be treated like a pariah,” Goncalves told BNN Bloomberg. “If that’s what Canada will do to attract foreign investment into Canada, I don’t believe that they will be very successful.”
In a letter to Joly late last Friday, Stelco president Paul Simon blamed 50 per cent U.S. tariffs for the layoffs.
“The state of Canada-U.S. trade, including 50 per cent tariffs applied to Stelco’s products in an important export market for Canadian cold-rolled and coated steel, together with the Government of Canada’s response to these trade measures…is emblematic of an entirely different economic order facing the industry than at the time Stelco’s undertakings were given,” Simon wrote.
Simon also argued that the government’s own guidelines for interpreting the Investment Canada Act mean that Stelco shouldn’t be held liable if it makes decisions because of circumstances beyond its control.
“This guideline has been followed by the Canadian government for over 45 years and investors have relied upon it during times of economic upheaval,” Simon argued. “Investors…need to be able to rely on the government’s own words on these matters if the regime is to continue to be administered with integrity and credibility.”
In her remarks Friday, Joly also said the government will help finance more aluminum processing and manufacturing in Canada.
“Over time, we have lost our capacity to transform aluminum, and too much value-added transformation occurs in the U.S., leaving us over-exposed to tariffs and unnecessarily increasing costs for Canadians,” Joly said. “This is both a vulnerability that we can no longer afford and an opportunity for growth.”
With files from Bloomberg
