What happens next with Stelco layoffs as Ottawa threatens legal action? - BERITAJA

Industry Minister Mélanie Joly is expected to speak Wednesday day — her first nationalist quality since Stelco answered Ottawa’s ineligible threat complete layoffs of up to 500 workers.

Stelco’s letter, obtained by BERITAJA, was dated Oct. 9 successful consequence to 1 sent by Joly connected Oct. 5, successful which she gave the institution an ultimatum and 5 days to respond.

Joly’s missive to the institution expressed “extreme disappointment” and claimed the layoffs represent a nonstop breach of the company’s commitments nether the Investment Canada Act.

Stelco maintained successful its consequence that it hasn’t done thing incorrect and claims the accusations from the national authorities are “false.”

The Ontario-based alloy shaper announced past period that unit from U.S. tariffs forced it to ore alloy accumulation astatine its Lake Erie Works works successful Haldimand, and halt accumulation astatine its works successful Hamilton. Although the institution said immoderate of those workers would beryllium offered positions astatine the Haldimand facility, hundreds are still expected to beryllium retired of work.

U.S. President Donald Trump levied tariffs connected alloy products from Canada of up to 50 per cent nether its Section 232 duties about a year-and-a-half ago, pinch different products for illustration aluminum and autos besides facing tariffs.

Here’s wherever things stand.

Joly claimed successful her missive to Stelco connected Oct. 5 that the marketplace dynamics surrounding Trump’s tariff policies do not excuse Stelco from its commitments nether the Investment Canada Act, and that the national authorities would beryllium utilizing the “full unit of the law” if those jobs are not preserved.

Joly told reporters past week that the main executive of U.S.-based Cleveland-Cliffs, which acquired Stelco successful 2024, has supported alloy tariffs and truthful cannot qualify the company’s scheme to laic disconnected up to 500 workers owed to tariffs and marketplace pressures arsenic beyond its control.

“He’s successful favour of these U.S. tariffs against steel,” she said, referring to Cleveland-Cliffs CEO Lourenco Goncalves’ nationalist support of American alloy tariffs.

“They cannot opportunity that this is now an enactment of God aliases unit majeure.”

The authorities says Cleveland-Cliffs made a bid of commitments erstwhile it acquired the Ontario steelmaker, including preserving jobs and the Stelco name, maintaining and expanding its Canadian operations, generating costs savings, broadening its customer guidelines and supporting unionized alloy jobs.

In a merchandise from 2024, Cleveland-Cliffs announced the agreed acquisition of Stelco and said they would “maintain important employment levels successful Canada and Canadian practice connected the guidance team.”

Business lawyer Nassira El Hadri said the authorities appears to person moved past asking Cleveland-Cliffs to warrant the layoffs, and is besides asking for a scheme outlining really it will comply pinch each of its undertakings.

“They are not asking for an explanation,” said El Hadri, laminitis of Hadri Law successful Toronto. “They’re saying, ‘You person to springiness america a scheme connected really you are going to comply.’”

“These undertakings are not goodwill gestures,” El Hadri said. “They are binding.”

If the institution responds by simply reiterating that the layoffs are basal because of U.S. tariffs, she said the conflict could extremity up successful court.

According to the national government, the binding undertakings successful the statement from 2024 include:

• To respect Stelco’s historical marque by carrying connected operations nether the name, “Stelco, a Cleveland-Cliffs Company”;
• To support Stelco’s caput agency successful Hamilton, pinch work for Stelco’s day-to-day operations;
• To proceed to employment astatine slightest the aforesaid number of unionized labor and the immense mostly of non-unionized labor arsenic were employed erstwhile the transaction was announced;
• To honour each existing corporate bargaining agreements and Stelco’s worker use and pension commitments;
• To make important superior and investigation and improvement expenditures successful support of Stelco’s operations; and
• To guarantee Stelco’s Scope 1 and Scope 2 greenhouse state emanation strength do not summation and proceed to beryllium astatine slightest 25 per cent beneath the world mean for integrated alloy mills.

Stelco’s missive successful consequence to Joly from Oct. 9 was authored by Stelco’s president, Paul Simon.

According to the seven-page letter, exports of cold-rolled and coated alloy to the United States person plunged 58 per cent from pre-trade-war levels arsenic overseas imports proceed to undercut Canadian-made steel.

Simon besides claimed successful the missive that the institution was unfastened and transparent pinch the national authorities for respective months about its struggles.

“Our early September meetings pinch respective elder authorities officials, including representatives from your office, led Stelco to judge that the authorities understood the marketplace realities confronting Stelco’s Hamilton Works finishing lines,” the missive said.

“Stelco submitted its yearly study confirming its compliance pinch the employment undertakings successful November 2025. That study highlighted that Stelco was facing important challenges owed to the unforeseen consequences stemming from unprecedented U.S. tariffs and Canada’s nonaccomplishment to beforehand an effective ‘Fortress North America’ waste and acquisition regime.”

“Your practice that Stelco’s planned layoffs origin it to breach its undertakings is mendacious arsenic the undertakings do not stipulate a committedness to debar layoffs.”

In the letter, Simon described an manufacture upended by U.S. tariffs, weakening request and continued overseas alloy imports.

“Stelco cannot proceed to nutrient cold-rolled and coated alloy products without incurring important losses that are not sustainable,” Simon said successful the letter. “As such, we will proceed pinch the idling of Hamilton Works.”

Over the weekend, Joly issued a connection successful a societal media station acknowledging she had received the missive from Stelco, and maintained the national government’s stance.

“The Government of Canada continues to expect Stelco to meet its legally binding commitments to employees. These commitments were agreed upon arsenic undertakings nether the Investment Canada Act and do not cease to use because of changing business strategy aliases marketplace conditions,” said Joly successful the statement.

“As our ineligible squad reviews the Stelco letter, each options are connected the table.”

– pinch files from BERITAJA’ Sean Prevail and the Canadian Press