Ottawa gives Stelco owner 15 days to address alleged violations or face legal action

OTTAWA — Ottawa has given the U.S. owner of Stelco Inc. a 15-day deadline to address alleged violations of commitments made when it purchased the Ontario steelmaker two years ago or face potential legal action.

In a sweeping 11-page letter Thursday, Industry Minister Mélanie Joly accused Cleveland-Cliffs of failing to honour six binding commitments, including employment guarantees.

Joly said the company must address its alleged violations, prove it has not broken its commitments or explain why it has failed to meet them.

If the company fails to comply, she said the federal government may apply to a superior court for remedies including an order requiring Cleveland-Cliffs to divest control of Stelco.

Other possible outcomes include asking for a court order requiring the company to honour its commitments or impose fines of up to $10,000 for each day it fails to comply.

Ron Wells, president of United Steelworkers Local 1005, which represents workers at Stelco’s Hamilton plant, called Joly’s letter compelling.

“She did a good job of explaining our position,” Wells said. “We support the letter … we just wish the process could be faster because unfortunately our members are on the street.”

Meanwhile, Joly accused Cleveland-Cliffs of advocating for U.S. tariffs on Canadian steel despite its commitment to support Canada’s steel industry, then using those same tariffs to justify layoffs.

The U.S. steelmaker “has both championed and taken credit for the U.S. tariffs, while simultaneously pointing to them to justify its actions that are resulting in its failure to comply with its undertakings,” she said.

The letter quotes Cleveland-Cliffs chief executive Lourenco Goncalves’ written testimony to the U.S. Congressional Steel Caucus in January, in which he supported the failure of the free trade agreement between the United States, Mexico, and Canada and advocated against the manufacturing industry in Canada.

“Since we acquired Stelco in 2024 — before President Trump was back in office — we blocked Stelco from selling steel into the U.S. market,” Goncalves said.

“I am glad that there is a good chance that the USMCA will not survive the 2026 review,” he said at the time. “We need manufacturing in the United States. Not in Canada; not in Mexico.”

Cleveland-Cliffs announced plans on Sept. 28 to lay off up to 500 workers at Stelco’s Hamilton Works and Lake Erie Works in Ontario, citing U.S. tariffs and challenging market conditions.

The company argued that Canada’s galvanized steel market is too small to support two domestic producers, Stelco and ArcelorMittal Dofasco, alongside steel imports.

It has called on Ottawa to tighten import restrictions to protect Canadian production.

Wells accused Cleveland-Cliffs of using its workers as leverage to pressure the federal government into tightening steel import restrictions.

“They took this extreme approach to try to put pressure on Ottawa and use our members as pawns to try to blackmail the government into adjusting imports,” he said.

The letter discloses the exact employment commitments Cleveland-Cliffs agreed to, including maintaining an annual average of at least 1,766 full-time-equivalent unionized workers and 603 full-time-equivalent salaried workers.

Meanwhile, the letter also reveals that concerns about Cleveland-Cliffs’ compliance with its commitments predate the recent layoff announcement.

The letter said Cleveland-Cliffs admitted in November 2025 to breaching two other undertakings related to maintaining co-op and summer student programs and supporting the community through charitable contributions.

Stelco’s Lake Erie Works produces hot-rolled steel used in construction and manufacturing, while Hamilton Works processes steel into cold-rolled and galvanized products, including rust-resistant zinc-coated steel used in automobiles, appliances and construction.

This report by The Canadian Press was first published Oct. 22, 2026.

Brett Bundale, The Canadian Press