Industry Minister Mélanie Joly has issued a warning to the American parent company of Stelco, based in Hamilton, giving them a 15-day ultimatum to reverse recent layoffs or face legal action. In a formal “demand letter” directed at Ohio-headquartered Cleveland-Cliffs, Joly asserts that the company is breaching its obligations as outlined in the Investment Canada Act. If Cleveland-Cliffs fails to comply with the directive, the Minister reserves the right to seek legal recourse through the courts, potentially resulting in financial penalties and a mandate for the company to divest from Stelco.
Joly has expressed willingness to engage in discussions with Cleveland-Cliffs to reach a resolution, emphasizing the government’s priority to safeguard Canadian jobs, uphold the steel industry, and ensure that commitments made to Canada are honored. The Minister’s statement highlights the firm stance on protecting the interests of Canadian workers and industries.
Cleveland-Cliffs recently announced plans to lay off up to 500 employees as part of operational adjustments at Stelco, a move that contradicts the “binding commitments” made during the company’s acquisition in 2024. The federal government insists that the acquisition agreement included provisions to maintain a certain level of unionized and non-unionized staff from 2024 to 2029, which the layoffs jeopardize.
While Cleveland-Cliffs justifies the layoffs as necessary for the company’s viability amid challenges like U.S. steel tariffs impacting sales, Joly has rejected this rationale. She underscores that external factors or market dynamics cannot excuse Cleveland-Cliffs from fulfilling its obligations to Canada, emphasizing the non-negotiable nature of the commitments made to support Canadian employment.
The situation underscores a critical point of contention between the government and the company, with potential legal action looming if the layoffs are not reversed within the stipulated timeframe. The Minister’s proactive stance signals a firm commitment to upholding the integrity of agreements and protecting the workforce in the face of corporate decisions that undermine prior commitments.
Image: Industry Minister Mélanie Joly addressing questions from the media in Ottawa on October 14.
