Canada threatens legal action against Stelco owner over planned layoffs

OTTAWA · The federal government has warned it will take legal action against the U.S. owner of Stelco Holdings Inc. if it proceeds with planned layoffs at its Hamilton steel plant. Industry Minister Mélanie Joly said Wednesday that Cleveland-Cliffs cannot blame American steel tariffs for cutting up to 500 jobs when its own chief executive has publicly supported those trade measures. Joly referred to Cleveland-Cliffs CEO Lourenco Goncalves's stance. "He's in favour of these U.S. tariffs against steel," she told reporters. "They cannot say that this is now an act of God or force majeure."

Joly said the company must provide a plan to meet its commitment to maintain more than 1,500 jobs, a condition of its 2024 takeover of Stelco under the Investment Canada Act. She sent a formal demand letter to Stelco president Paul Simon on Monday. "They need to comply," Joly said. "If not, we will use the full force of the law." The approval for the purchase required the new owner to keep the existing number of union jobs and most non-union positions.

Conservative labour critic Kyle Seeback called on the minister to act swiftly to protect workers. "When the minister is writing letters to actually say that she is going to sue, to enforce the covenants and contracts she has made with companies; we expect her to do that," Seeback said after question period. "Because workers at Stelco cannot afford to wait." Joly noted that, unlike recent disruptions in the auto sector, Cleveland-Cliffs's job promises were legally binding commitments made during the acquisition. The minister said the government has not yet received a reply from Stelco regarding its demand letter. She emphasized that the company's obligations are distinct from other market pressures due to the specific undertakings it made to secure Ottawa's approval for the sale.

With files from The Canadian Press, Global News and iPolitics