Joly warns Stelco owner of forced sale over layoffs

Industry Minister Mélanie Joly said Wednesday that Stelco’s U.S. owner could be forced to sell its Canadian assets or pay financial penalties if layoffs at the Hamilton, Ont., steel plant go ahead, after more layoff notices went out to unionized workers.

Updated Oct. 15, 2026. Joly told reporters that “everything is on the table” and that Ottawa expects Stelco “to follow the undertakings they’ve committed to the government of Canada,” according to BNN Bloomberg. The commitments were made under the Investment Canada Act when Cleveland-Cliffs bought Stelco in 2024.

Joly said a business decision or a change in market conditions cannot be used to get out of those promises. She said she is open to meeting the company to find a solution and is “looking at everything to keep jobs in Canada,” BNN Bloomberg reported.

Cleveland-Cliffs announced last month that it would idle part of the Hamilton operation, including its cold mill and coating departments, and cut up to 500 jobs. Global News reported the company is concentrating production at its Lake Erie Works plant in Haldimand County, and that some workers may be offered jobs there while hundreds are still expected to be out of work.

The company blames low steel prices and the U.S. tariffs of up to 50 per cent on Canadian steel. Ottawa has rejected that argument, noting that Cleveland-Cliffs chief executive Lourenco Goncalves has publicly supported the tariffs, so the company cannot call the layoffs an act of God.

The government’s warning follows an exchange of letters. Joly wrote to Stelco on Oct. 5, giving it five days to explain how it would meet its job guarantees, as we reported on Oct. 7. Stelco president Paul Simon replied in a seven-page letter on Oct. 9 that the breach claim is “false” and that the undertakings do not require the company to avoid layoffs, as we reported on Oct. 11. Global News said Simon wrote that Stelco “will continue with the idling of Hamilton Works” and that its exports of cold-rolled and coated steel to the U.S. have fallen 58 per cent from levels before the trade war.

Global News reported that Joly’s office has said its legal team is reviewing Stelco’s letter. A business lawyer quoted by Global said the undertakings “are binding” and that a dispute could end up in court if the company relies only on tariffs as its defence. Neither outlet reported a court date or a dollar figure for any penalty, and Canada News Media has not seen the letters.

The conditions attached to the 2024 deal require Stelco to keep its head office in Hamilton, employ at least the same number of unionized workers it had when the deal was announced, and keep most of its non-unionized workers. They also require it to honour existing collective agreements and pension and benefit commitments, according to Global News, which attributed the terms to the government.

Ron Wells, president of United Steelworkers Local 1005, called the situation “a manufactured crisis” created by Cleveland-Cliffs to pressure Ottawa into a trade deal, according to BNN Bloomberg. He said the company had told the union there would be essentially no job losses for five years.

The union welcomes the federal enforcement effort, but Wells warned that a court process could take months or years, and said members want to return to work now. Goncalves has said laid-off Canadian workers would be recalled if Ottawa reaches a trade pact with the United States, BNN Bloomberg reported.

The timing is the central question for the workers affected. Ottawa has precedent on its side: according to the Globe and Mail, the federal government sued U.S. Steel after layoffs during the 2008 financial crisis, when it owned Stelco, and a 2011 settlement brought new commitments on production and investment. That case took years to resolve. The layoffs at Hamilton, by contrast, are already under way.

The fight comes as Statistics Canada reported that the economy lost 68,000 jobs in September, erasing the employment gains recorded so far in 2026. This story is developing, and neither the government nor Cleveland-Cliffs has said what happens next.

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Via BNN Bloomberg (original) and Global News (original). The 2008 and 2011 history is from the Globe and Mail.