Stelco says it is laying off up to 500 workers at its Hamilton and Lake Erie facilities as tariffs and trade pressures ripple through Canadian manufacturing, experts said.
The Story
Stelco Holdings Inc. said Monday it is laying off up to 500 workers at its Hamilton and Lake Erie facilities, citing the ongoing trade crisis, weak demand and continued import pressure.
Prime Minister Mark Carney said at a news conference Tuesday that workers have been “betrayed by the company,” adding that Ottawa was prepared to use “all powers that we have” and “pursue them to the fullest extent of the law.”
Carney said there is “money on the table from the federal government” and referenced legal obligations for employment.
He also linked the situation to U.S. tariffs, saying it was caused by the tariffs and that Cleveland-Cliffs’ CEO had “applauded (U.S. President Donald Trump) for putting those tariffs on.”
Alan Arcand, chief economist at Canadian Manufacturers and Exporters, said the impact of tariffs is working through integrated supply chains, where companies using steel lose U.S. sales and cut production, reducing how much steel they buy from Canadian producers.
Arcand said, “Supply chains have been optimized on the assumption that we would have free trade with the U.S. and you yank that away suddenly without warning and these are the consequences,” adding that companies can face “impacts within the firm being directly hit by the tariff and the firms within the broader supply chain.”
Stelco said the layoffs are “unfortunate but necessary” to ensure its survival and said U.S. tariffs have “significantly shrunk the market” for its cold-rolled and galvanized products.
The company said end users for those products can include automotive and parts manufacturers, machinery and fabricated metal producers, appliance makers, and construction and electrical equipment manufacturers.
Arcand said there is “significant overproduction” of steel globally and described it as “mainly a China story,” while saying the government has responded with anti-dumping duties and other measures and needs to keep monitoring import volumes and adjust policies as needed.
Ron Wells, president of United Steelworkers Local 1005, which represents workers at Stelco’s Hamilton plant, said the union was disappointed and wants tariff issues settled so members can return to work, adding, “We’re hoping this trade situation resolves itself so our members can get back to work.”
Wells said Lourenco Goncalves, CEO of Cleveland-Cliffs, commented on a recent earnings call that coated steel prices in Canada are significantly lower than in the United States.
Stelco said it is indefinitely idling its Hamilton facility and concentrating production at its Lake Erie Works in Nanticoke, Ont., and said parent company Cleveland-Cliffs expects overall steel tonnage will not be affected.
Stelco said it expects a significant number of affected Hamilton employees will be offered jobs at Lake Erie Works.
The company said demand for its products fell nearly 25 per cent in the second quarter compared with the 2024 quarterly average, including a 10 per cent decline in Canadian demand as steel customers and manufacturers faced trade-related pressures.
Stelco said federal measures have reduced imports but that volumes remain too high to offset the market gap created by trade tensions.
← More stories