Stelco has denied allegations that it violated its agreement with the federal government, describing them as untrue, even as the company proceeds with layoffs affecting hundreds of workers and the government has indicated it may pursue legal action if those positions are not retained.
A written reply from the Ontario-headquartered steelmaker reached Industry Minister Melanie Joly following her own correspondence directed at Cleveland-Cliffs, the American firm that acquired Stelco in 2024. Joly had set a five-day window for the company to submit a response.
A written reply from Cleveland-Cliffs to Joly's office, dated Oct. 9, was initially withheld from public view, though the company confirmed its existence to a broadcast outlet.
A letter from Stelco's president and general counsel, Paul Simon, addressed to Joly and passed to a news outlet by an unnamed source, stated that the company had kept the government informed of deteriorating market conditions through ongoing contact and communications stretching back to July 2026, and that meetings held in early September with senior government representatives — including those from Joly's office — had left Stelco with the understanding that officials were aware of the market pressures affecting the Hamilton Works finishing lines. Stelco, alongside Algoma and other Canadian steel producers, has faced a steep drop in sales to American buyers following the imposition of U.S. tariffs of 50 per cent on Canadian steel imports.
Up to 500 jobs are at risk, with the company pointing to prevailing market conditions as the driving factor behind the decision.
On Oct. 10, after receiving Stelco's letter, Joly posted on social media that the federal government would hold Stelco to the obligations it had made to its workforce under law. The minister stated that the commitments formalised as undertakings under the Investment Canada Act remain binding regardless of shifts in business strategy or prevailing market conditions, and that legal advisers were reviewing correspondence from Stelco while all available courses of action remained under consideration. That statement came against the backdrop of federal approval granted in 2024 for Cleveland-Cliffs, a United States-based company, to acquire Stelco under the same legislation governing foreign takeovers.
In her letter addressed to Stelco, Joly outlined that federal approval of the transaction was conditional on the incoming owner preserving existing union positions and keeping the bulk of non-union roles intact. Joly stated that such obligations remain in force regardless of shifts in business strategy or prevailing market conditions, and noted that this principle carries particular weight in the present matter, given that Cleveland-Cliffs has pointed to trade disruptions as a factor affecting operations at Hamilton Works — even as the company's chief executive has publicly backed Section 232 tariff measures.
In its written response to Joly's allegations, Stelco maintained that its obligations under the 2024 agreement are being met, pointing to an annual report filed in November 2025 as documentation of its adherence to the employment undertakings outlined in that deal. Stelco's position, as set out in the letter, held that its workforce reductions fell within the bounds of its undertakings — none of which contained language prohibiting layoffs — and attributed the company's difficulties to unanticipated consequences of U.S. tariffs and the absence of a functioning continental trade framework.
That framing drew a direct response from Prime Minister Mark Carney at the time the layoffs were announced, when he stated that the company had failed Canadian workers and pointed to funding that he said was available to keep them employed.
Cleveland-Cliffs chairman and CEO Lourenco Goncalves attributed the company's move to market conditions rather than financial factors, telling reporters that no level of incentives would address the underlying structural problem — namely, that Canadian demand for the volume of galvanized steel the company produces there falls well short of what the operation requires to be viable.
USW Local 1005, the union representing approximately 500 steelworkers facing potential job losses, stated that it had no involvement in reviewing the undertakings contained in the Investment Canada Act agreement, adding that both Cleveland-Cliffs and the federal government had given assurances that bargaining unit employment levels would hold steady for five years. Union president Ron Wells, in a written statement, described the arrangement as a guarantee against job losses, while also noting that the union had not been given access to the signed agreement between Cliffs and the government, and that the company's reliance on U.S. steel tariffs as a justification had not held up to scrutiny.
Stelco, for its part, wrote to Joly disputing any wrongdoing, arguing that the circumstances created by the trade dispute — measured against the federal government's own guidelines and the information it had received throughout that period — meant the company bore no responsibility for any failure to meet its undertakings. The company indicated it will act in line with the Investment Canada Act and its associated guidelines to defend its position.
