Canada gives Stelco owner 15 days to protect jobs or face legal action

ASM, Philippine Canadian Inquirer
October 23, 2026

Photo courtesy: The Globe and Mail

OTTAWA, Canada — The Canadian government has given US steelmaker Cleveland-Cliffs 15 days to address alleged violations of its employment commitments after announcing plans to lay off hundreds of workers at Stelco’s Ontario facilities.

Industry Minister Mélanie Joly issued the demand in an 11-page letter dated October 22, warning that Ottawa could pursue legal action if the company fails to meet the conditions attached to its 2024 acquisition of Stelco.

The dispute centres on Cleveland-Cliffs’ plan to cut up to 500 jobs at its Hamilton Works and Lake Erie Works facilities, citing US tariffs and difficult market conditions.

However, Ottawa maintains that the company’s employment obligations remain legally binding despite changes in the steel market.

Under the 2024 agreement, Cleveland-Cliffs committed to maintaining an annual average of at least 1,766 full-time-equivalent unionized employees and 603 salaried employees in Canada.

Joly alleges that the company has failed to honour six commitments made when the federal government approved the acquisition under the Investment Canada Act.

The minister is now requiring Cleveland-Cliffs to address the alleged violations, provide evidence that it remains compliant or explain why it has failed to meet its obligations.

If the company does not satisfy those demands within 15 days, Ottawa could ask a superior court to enforce the agreement.

Possible measures include financial penalties of up to C$10,000 for each day of non-compliance, a court order requiring the company to honour its commitments or an order forcing it to sell its Canadian operations.

These actions would require further legal proceedings and have not yet been imposed.

The dispute has also raised questions about Cleveland-Cliffs’ position on US trade restrictions.

Joly accused the American steelmaker of supporting tariffs on Canadian steel while using those same trade barriers to justify reductions in its Canadian workforce.

Cleveland-Cliffs has rejected Ottawa’s allegations, maintaining that it has not breached its employment commitments.

The company argues that its agreement requires it to maintain specified average annual staffing levels rather than a fixed number of employees every day.

It has also pointed to US tariffs, weaker demand and challenges in Canada’s steel market as reasons for adjusting operations.

Concerns over the acquisition agreement extend beyond the latest layoffs.

Joly’s letter also identified earlier compliance issues involving student employment programs and charitable contributions. According to the federal government, Cleveland-Cliffs acknowledged in November 2025 that it had failed to meet commitments in those areas.

The latest developments have added uncertainty for workers at Stelco’s Ontario operations.

United Steelworkers Local 1005 president Ron Wells welcomed the government’s intervention but expressed concern about the time required to resolve the dispute, particularly for employees already affected by job losses.

Stelco’s Hamilton Works produces processed steel products used in automobiles, appliances and construction, while Lake Erie Works manufactures hot-rolled steel for industrial applications.

Both facilities are part of Canada’s domestic steel supply chain, which has faced mounting pressure from tariffs and changing market conditions.

Joly has maintained that the federal government remains open to discussions with Cleveland-Cliffs to resolve the dispute and protect Canadian jobs.

The company faces a 15-day deadline to respond to Ottawa’s demands, with the possibility of court proceedings if the government determines that its legally binding commitments remain unmet.