Federal Industry Minister Melanie Joly has given Stelco’s parent company Cleveland-Cliffs formal notice it has 15 days to undo layoffs, provide hard evidence to justify them, or wind up in court.
The notice, in a “demand letter” sent to Stelco CEO Paul Simon Thursday morning, says 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 its in breach of commitments it made when buying Stelco.
The letter also says Cleveland-Cliffs CEO Lourenco 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.
The letter also cited Goncalves’ testimony before U.S. legislators in January.
“He took credit for blocking Stelco from selling steel into the U.S. market. He stated that the increase in Section 232 tariffs to 50 per cent was ‘absolutely necessary,’” the letter said of Goncalves’ testimony before the Congressional Steel Caucus.
In a press release, Joly blasted Cleveland-Cliffs.
“Let me be clear: no act of God or change in market conditions can relieve Cleveland-Cliffs of the commitments it made to Canada. Those commitments are not optional,” Joly said. “I remain prepared to sit down with Cleveland-Cliffs to find a solution. But our bottom line is clear: protect Canadian jobs, defend our steel industry and ensure that commitments made to Canada are respected.”
In a letter to Joly late last Friday, 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.
More to come.
