Industry Minister Mélanie Joly has given Cleveland-Cliffs 15 days to address alleged violations tied to its Stelco purchase or face potential court action.
The Story
Industry Minister Mélanie Joly has given Cleveland-Cliffs 15 days to address alleged violations of six binding commitments made when the U.S. company bought Stelco Inc. in 2024 or face potential legal action.
In an 11-page letter issued Thursday, Joly accused Cleveland-Cliffs of failing to honour the commitments, including employment guarantees. She said the company must address its alleged violations, prove it has not broken its commitments or explain why it has failed to meet them.
Joly said that if Cleveland-Cliffs does not comply, the federal government may apply to a superior court for remedies. Those remedies could include an order requiring the company to divest control of Stelco, or a court order requiring Cleveland-Cliffs to honour its commitments, and fines of up to $10,000 for each day it fails to comply.
Ron Wells, president of United Steelworkers Local 1005, which represents workers at Stelco’s Hamilton plant, said Joly’s letter was “compelling.” He said, “We support the letter … we just wish the process could be faster because unfortunately our members are on the street.”
Joly also accused Cleveland-Cliffs of supporting U.S. tariffs on Canadian steel despite a commitment to support Canada’s steel industry, and then using those tariffs to justify layoffs. In the letter, she said the company “has both championed and taken credit for the U.S. tariffs, while simultaneously pointing to them to justify its actions that are resulting in its failure to comply with its undertakings.”
The letter quotes Cleveland-Cliffs chief executive Lourenco Goncalves’ written testimony to the U.S. Congressional Steel Caucus in January, in which he supported the failure of the free trade agreement between the United States, Mexico, and Canada and advocated against manufacturing in Canada. The letter includes Goncalves saying, “Since we acquired Stelco in 2024 — before President Trump was back in office — we blocked Stelco from selling steel into the U.S. market,” and, “I am glad that there is a good chance that the USMCA will not survive the 2026 review.” It also includes, “We need manufacturing in the United States. Not in Canada; not in Mexico.”
Cleveland-Cliffs announced plans on Sept. 28 to lay off up to 500 workers at Stelco’s Hamilton Works and Lake Erie Works in Ontario, citing U.S. tariffs and challenging market conditions. The company said the Canadian galvanized steel market is too small to support two domestic producers—Stelco and ArcelorMittal Dofasco—alongside steel imports, and it has asked Ottawa to tighten import restrictions to protect Canadian production.
Wells accused Cleveland-Cliffs of using the planned layoffs to pressure Ottawa over import restrictions. He said, “They took this extreme approach to try to put pressure on Ottawa and use our members as pawns to try to blackmail the government into adjusting imports.”
Joly’s letter discloses the employment commitments Cleveland-Cliffs agreed to, including maintaining an annual average of at least 1,766 full-time-equivalent unionized workers and 603 full-time-equivalent salaried workers.
The letter also says concerns about Cleveland-Cliffs’ compliance predate the Sept. 28 layoff announcement, adding that the company admitted in November 2025 to breaching two other undertakings related to maintaining co-op and summer student programs and supporting the community through charitable contributions.
Stelco’s Lake Erie Works produces hot-rolled steel used in construction and manufacturing. Hamilton Works processes steel into cold-rolled and galvanized products, including rust-resistant zinc-coated steel used in automobiles, appliances and construction.
← More stories