Hamilton-based steel manufacturer Stelco has confirmed plans for significant job cuts, disregarding warnings of legal repercussions from the Canadian government. In correspondence obtained by CBC News, Stelco Inc., under the ownership of Cleveland Cliffs based in Ohio, refutes allegations by Ottawa that it is breaching employment commitments outlined in the Investment Canada Act (ICA).
In a letter addressed to Industry Minister Mélanie Joly, Paul Simon, president, and general counsel at Stelco Inc., disputes the assertion that the planned layoffs violate the company’s obligations. Simon points out that the ICA does not mandate avoiding layoffs or maintaining specific employment levels throughout the commitment period.
Following an ultimatum issued by Joly to Stelco last week, demanding a viable strategy to safeguard the potential loss of 500 jobs at the Hamilton facility, the company defended its position. Cleveland Cliffs acquired Stelco in a $3.4 billion transaction, emphasizing the preservation of national interests and workforce significance.
Joly’s stipulation includes commitments to retain a comparable number of unionized and non-unionized workers as at the transaction announcement. Stelco attributes the layoffs to uncontrollable factors, specifically citing the adverse impact of the 50% tariffs imposed by U.S. President Donald Trump.
The federal government alleges that Stelco turned down financial aid offers before announcing the decision to idle its Hamilton plant. Despite presenting a plan to meet ICA employment obligations, Stelco reiterates its intent to proceed with the Hamilton layoffs, citing challenging external conditions hindering steel production and profitability.
Stelco suggests that laid-off employees may have the option to fill vacancies at its Lake Erie facility and expresses willingness to collaborate with the government further. The company advocates for stricter regulations on steel imports into Canada to support domestic producers, including Stelco.
CBC News has sought comments from Joly’s office for additional insights on the matter.
