Joly warns Stelco could be forced to sell Canadian assets if layoffs continue

More layoff notices have been issued to unionized workers at Stelco’s Hamilton, Ont., plant as the company moves ahead with idling its cold mill and coating departments. Ottawa has threatened to take the company to court if the layoffs proceed.

Industry Minister Mélanie Joly said “everything is on the table,” including forced divestment of assets or financial penalties if Stelco does not heed federal warnings to stop the cuts. She told reporters Wednesday that the government expects the company to honour its commitments to Canada. A business decision, or a change in market conditions, cannot be used as a reason to disregard them, she said.

Last month, Cleveland-Cliffs, Stelco’s U.S. owner, announced it would shut down part of its Hamilton operation and cut up to 500 jobs. The federal government says the move breaks commitments Cleveland-Cliffs made under the Investment Canada Act when it bought Stelco in 2024, including a pledge to protect jobs.

The company says it has no choice, citing low steel prices and U.S. President Donald Trump’s tariffs. Ottawa rejected that argument, noting that Cleveland-Cliffs’ CEO has publicly supported the tariffs. Joly said she is not backing down, but remains open to meeting with the company to find a solution. The government is looking at every option to keep jobs in Canada, she said.

Cleveland-Cliffs did not immediately respond to a request for comment. In a letter to Joly, however, the company said it does not believe the layoffs breach any undertakings Stelco agreed to in 2024.

Hundreds of workers are caught in the middle as the two sides trade blame. Ron Wells, president of United Steelworkers Local 1005, called the situation a manufactured crisis by Cleveland-Cliffs to pressure the federal government into securing a trade deal. He said workers do not feel appreciated and do not want to be used as pawns.

Hamilton Mayor Andrea Horwath echoed those concerns. She is running for re-election in the upcoming municipal election. Horwath said her biggest concern is that Hamilton’s steelworkers are becoming casualties of the tariff war Trump started. She said she would do everything she could to protect their jobs and described this as an existential moment for the city’s steel industry.

Union officials welcome the government’s enforcement of the Investment Canada Act, but say the situation is urgent and worry legal proceedings could take months or even years. Wells said Cleveland-Cliffs had told the union there would be essentially no job losses or layoffs for five years. The union is glad the government has started the process, he said, but taking the company to court could be a long, drawn-out process. “Our members, they want to get back to work now,” he said.