The federal government isn’t taking a lawsuit against Stelco off the table despite a company letter to industry minister Melanie Joly late last week explaining its rationale for hundreds of layoffs.
The federal government had initially given the company until Tuesday night to respond to a request for more information about its plans to lay off up to 500 workers, or face the possibility of legal action.
Stelco president Paul Simon sent Joly a letter Friday night blasting the federal government, saying that it knew for months about the potential for layoffs at the company’s Hamilton plant, and that offers of federal financial support were too little, too late.
“The offer of funding … was a last-ditch effort to cover for an inadequate Canadian trade regime that has failed to create a viable market for the products manufactured at Hamilton Works,” Simon wrote. “The proposal was ill-conceived and will not resolve the situation facing our finishing operations in Hamilton.”
In a post on X over the weekend, Joly made clear that the government was keeping its options open.
“The government of Canada continues to expect Stelco to meet its legally binding commitments to employees,” Joly wrote. “These commitments…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.”
In response to a request for comment, Joly’s office pointed to her weekend statement.
Neither Stelco nor its parent company Cleveland-Cliffs responded to repeated requests for comment.
The government has said that Stelco’s layoffs break commitments the company made under the Investment Canada Act when it was taken over in 2024 by U.S.-based Cleveland-Cliffs.
Stelco continues to hand out layoff notices to affected workers this week, something that makes it likelier the government will take the company to court, argued union leader Marty Warren.
“I would hope and think so unless some type of agreement is possible to achieve,” said Warren, head of the Canadian division of the United Steelworkers.
An agreement, admitted Warren, seems less likely than a lawsuit given Stelco’s letter, and the continued layoffs.
In the letter, Stelco’s Simon cited changing market conditions, including tariffs from U.S. president Donald Trump for its decision to cut jobs at its Hamilton plant.
“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 currently in Canada and those the government of Canada seeks to court for new investments, including those recently in attendance at the Canada Investment Summit held on September 14–15, 2026, 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.”
At Queen’s Park, Ontario NDP Leader Marit Stiles urged Premier Doug Ford and Prime Minister Mark Carney to nationalize Stelco to save the Hamilton jobs.
“Make no mistake, this is a tragedy and it is an attack on our workers and on our economy from an American company who is acting in bad faith in the middle of a trade war,” Stiles told reporters Tuesday.
“I’m writing today to the premier, calling on him to make good on his earlier remarks about buying Stelco. It’s time to turn that conversation into a serious plan,” she said.
“I’m calling on the premier to work with the federal government to push Cleveland-Cliffs to give up their ownership interest in Stelco and establish public ownership and Canadian management.”
Stiles dismissed Cleveland-Cliffs CEO Lourenco Goncalves as “an ideologue who has supported the tariffs of Donald Trump.”
With files from Robert Benzie
