Hamilton: Canadian Industry Minister Mélanie Joly has given American parent company Cleveland-Cliffs a 15-day deadline to reverse layoffs at the Stelco steel company. The minister warned that the government would proceed with legal action if the decision is not withdrawn.
The company plans to temporarily lay off up to 500 workers at the Stelco plant in Hamilton, citing the impact of U.S. steel tariffs on sales. However, the federal government maintains that this is a violation of employment protection guarantees provided when Stelco was acquired in 2024.
The government pointed out that the company had promised to maintain the number of unionized workers and the jobs of a majority of non-unionized employees from 2024 to 2029.
Possibility of Legal Action
The minister set the 15-day deadline in an official letter sent to Cleveland-Cliffs on Thursday. The letter makes it clear that if the directive is not complied with, the government will approach the court under the Investment Canada Act to seek measures including financial penalties. There is also a possibility of directing the company to divest its ownership of Stelco.
Meanwhile, Cleveland-Cliffs argues that reducing the workforce is necessary to ensure the company’s survival. However, Joly stated that market changes or economic downturns do not exempt the company from the commitments made to Canada.
Earlier, Lourenco Goncalves, head of Cleveland-Cliffs, reported that Stelco recorded its best third-quarter performance since the acquisition this year. Consequently, arguments regarding the company’s financial condition have also become a subject of discussion.
