Industry Minister Mélanie Joly has issued a 15-day ultimatum to the American parent company of Hamilton-based Stelco to reverse recent layoffs or face legal action. In a formal “demand letter” directed at Ohio-based Cleveland-Cliffs, Joly alleges a breach of obligations outlined in the Investment Canada Act. If Cleveland-Cliffs fails to comply, the Minister reserves the right to seek judicial intervention, potentially resulting in financial penalties and a directive for divestment from Stelco.
Joly emphasized a willingness to engage in dialogue with Cleveland-Cliffs to reach a resolution, but stressed the government’s core objectives of safeguarding Canadian jobs, supporting the steel industry, and upholding commitments made to Canada.
Cleveland-Cliffs had announced intentions to lay off up to 500 employees as part of a strategy to halt specific steel production at Stelco, a move deemed by the federal government as a violation of contractual assurances made during the company’s acquisition in 2024. The government asserts that the purchase agreement included stipulations to maintain consistent employment levels from 2024 to 2029.
While Cleveland-Cliffs cited the necessity of layoffs to ensure the company’s viability amidst challenging market conditions exacerbated by U.S. steel tariffs, Joly dismissed this rationale, asserting that the commitments made by the company to Canada are non-negotiable and must be honored regardless of external factors.
