Hamilton-based steel manufacturer Stelco has announced its decision to move forward with a significant number of job cuts, despite facing legal threats from the Canadian government. The company, owned by Cleveland-Cliffs based in Ohio, refutes claims made by Ottawa that it is breaching employment commitments outlined in the Investment Canada Act (ICA).
In a letter addressed to Industry Minister Mélanie Joly, Paul Simon, the president and general counsel of Stelco, dismissed the allegations, stating that the planned layoffs do not violate any binding undertakings as per the ICA guidelines. The letter comes in response to an ultimatum issued by Joly, demanding Stelco to present a plan to safeguard the approximately 500 jobs at risk in its Hamilton facility.
United Steelworkers Local 1005 President Ron Wells expressed dissatisfaction with Stelco’s response, highlighting that the union, representing the affected workers, was not involved in the agreement discussions. Cleveland-Cliffs acquired Stelco in a $3.4 billion deal, emphasizing the preservation of national interests and the importance of the workforce.
The government insists that Stelco must honor the commitments to maintain the same number of unionized and non-unionized employees as when the acquisition was announced, regardless of changing market conditions. Prime Minister Mark Carney affirmed that legal actions will be pursued against Cleveland-Cliffs to ensure compliance with the law.
Stelco claims that Ottawa was aware of its circumstances, attributing the situation to external factors beyond its control, such as the impact of tariffs and trade disputes. The company rejected financial support offers from the government, asserting that they did not address the underlying reasons for the decision to idle its Hamilton operations.
Stelco alleges that the government’s public statements were inaccurate and misleading, asserting ongoing communication with federal officials regarding financial concerns. The company reiterated its commitment to proceed with the layoffs in Hamilton due to challenging market conditions and offered affected workers the opportunity to transfer to positions at its Lake Erie plant.
Stelco presented a plan to fulfill its ICA job commitments and emphasized the need for government intervention to restrict steel imports and support domestic producers like Stelco. Joly’s office has been approached for comment, and further updates will be provided as necessary.