With the clock running down towards a lawsuit, federal Industry Minister Mélanie Joly says she’ll meet with the CEO of Stelco’s parent company only if layoffs are “immediately” undone first.
The message came in a letter sent by Joly to Stelco CEO Paul Simon Thursday morning and goes on to say she’s prepared to meet Simon and Cleveland-Cliffs CEO Lourenco Goncalves if they retract hundreds of layoff notices.
“I want to be clear about the basis for that discussion. The workers who have been laid off or received layoff notices must be recalled immediately,” Joly wrote Thursday.
Joly also blasted the company’s official response to an Oct. 22 “demand letter” giving it 15 days to undo the layoffs, provide detailed information justifying the job losses, or face legal action. That 15-day waiting period expires Nov. 6.
“I have also reviewed the interim compliance report…I must be equally clear that I find the report far from satisfactory. It does not alter my belief that Stelco and Cleveland-Cliffs are not in compliance with their undertakings,” said Joly. “Assertions of compliance are not a substitute for the information and evidence necessary to establish compliance.”
In an emailed statement to the Star, Goncalves didn’t directly address Joly’s letter, but said the minister isn’t playing fair by suggesting Stelco could be sold as part of a potential lawsuit.
“Stelco is not for sale, and I do not believe that what Minister Joly is doing — when she openly solicits buyers for a company the government does not own — is a good course of action. In countries other than Canada, that would be illegal,” said Goncalves, adding that Joly’s actions could scare off other potential foreign investors in Canada’s economy.
“If I knew, or even suspected, that I would be subjected to this type of treatment when I make a business decision within the boundaries of undertakings that I am in full compliance, I certainly would not have invested in Canada,” said Goncalves.
He vowed not to sell the company for at least a year.
“I will not talk to any buyers, real or imaginary, now or within the next calendar year. Conversely, after we demonstrate one year of higher production numbers, and also have brought all the 175 workers back to their jobs, I will be glad to sell the company, and only if I decide to do so by then,” Goncalves added.
In an interview with CBC earlier this week, Goncalves said the only reason he bought Stelco was to keep it from undercutting Cleveland-Cliffs in the U.S.
“I bought Stelco because I could not afford anymore having Stelco flooding the market here in the United States to the detriment of my own company,” Goncalves told CBC.
That admission, said trade lawyer Nicholas Lamp, may have been a mistake.
“He bought Stelco to block it from selling into the U.S.,” said Lamp, an associate professor at Queen’s University’s Faculty of Law and a former dispute settlement lawyer at the World Trade Organization. “That really changed the dynamic. The layoffs were never about the tariffs.”
And, Lamp added, it’s clear from Joly’s letter that the government’s patience is wearing thin, and that the dispute is looking likelier than ever to wind up in court.
“The only way is if the government sees a plan from Goncalves. Unless he’s made a firm commitment with timelines for rehiring, the government really has no choice but to go to court,” Lamp said.
In a written statement, the head of the Canadian branch of the United Steelworkers union supported Joly’s tough talk.
“No meeting is needed to hear excuses from Cliffs. A meeting is needed when he has a concrete plan to bring our members back to work. Nothing to talk about until a worker plan is delivered to Joly,” said USW’s Marty Warren.
Goncalves also blasted Joly and Warren’s public criticism.
“I also don’t believe that engaging with the union to jointly attack in the media both the parent company and its CEO is constructive to attract foreigners to invest in Canada,” Goncalves said.
The Oct. 22 demand letter sent to Simon said the layoffs break job commitments Cleveland-Cliffs made when it took Stelco over in 2024. The company has blamed the cuts on market conditions, including Donald Trump’s 50 per cent tariffs on Canadian steel, and what it says are too many cheap imports.
The letter notifies Cleveland-Cliffs that Joly could ask a judge to force the company to undo the layoffs or force a sale of its Canadian assets, and also face a $10,000 fine for each day it’s in breach of commitments it made when buying Stelco.
The demand letter also said Goncalves lobbied the U.S. government to impose heavy tariffs on Canadian steel, and diverted production from Stelco to U.S. operations before the tariffs were imposed.
“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,” Joly wrote in the letter.
In a letter to Joly late Oct. 9, Stelco’s 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.
