OTTAWA — A legal battle is brewing between the Canadian government and the U.S. owner of Hamilton-based steelmaker Stelco over plans to lay off hundreds of workers. Lourenco Goncalves, CEO of Cleveland-Cliffs—the American parent company of Stelco—announced that he is prepared to fight the Canadian government in court to proceed with the job cuts.
Canadian Industry Minister Mélanie Joly stated that under binding commitments made during the 2024 acquisition via the Investment Canada Act, Cleveland-Cliffs is obligated to maintain unionized and non-unionized employment levels through 2029. However, Goncalves rejected this interpretation, arguing there is no provision requiring employment levels to remain identical every single day over five years, adding he would not have acquired the company under such conditions. He described the layoffs as a temporary measure until a U.S.-Canada trade deal is finalized.
The Canadian government, backed by Prime Minister Mark Carney and Minister Joly, issued an ultimatum urging the company to present a plan to save up to 500 jobs at the Hamilton plant or face legal action to the fullest extent of the law. In response, Stelco cited financial pressures caused by U.S. President Donald Trump’s 50 percent tariffs on Canadian steel as factors beyond its control. Notably, Goncalves reiterated his support for the U.S. tariff policy and indicated he is open to selling Stelco if a good offer is made.
Layoffs are already underway across Stelco’s Hamilton and Lake Erie Works plants, with unions expecting 300 to 350 job cuts in Hamilton alone. The United Steelworkers Local 1005 called on Ottawa to hold Cleveland-Cliffs accountable, accusing the CEO of using Canadian workers to make Trump’s trade tariffs appear successful.
