Joly gives Stelco 15 days to comply with job commitments or face court action

OTTAWA – Industry Minister Mélanie Joly has sent a second letter to Stelco, demanding the steelmaker reverse its layoffs or provide detailed responses that justify its non-compliance under the Investment Canada Act.

Joly gave Stelco’s president Paul Simon 15 days to comply or face legal action.

Stelco is owned by Ohio-based Cleveland-Cliffs Inc., which signed several undertakings when the acquisition was approved in 2024 under the ICA, which included a commitment to maintain the same number of unionized employees for a period of five years.

Last month, the company confirmed it intended to lay off 500 workers at its Hamilton plant and Lake Erie Works in Nanticoke, Ont. Cliffs CEO Lourenco Goncalves has cited U.S. tariffs as the reason for the “temporary” job cuts.

“In the event Cliffs fails to comply with this demand, the Minister may, pursuant to section 40 of the Act, make an application to the superior court,” the letter read.

The letter also took aim at several instances where Goncalves has endorsed U.S. President Donald Trump’s Section 232 tariffs, which amount to 50 per cent on Canadian steel and aluminum.

Prime Minister Mark Carney has called the layoffs a “betrayal” to Stelco workers.

In an interview with CBC News earlier this month, Goncalves disputed the government’s claims.

“There is no provision in the contract that I have to keep employment at a certain level every single day of the five years,” he said. “If that was an imposition of the Canadian government, I would not have accepted.”

Joly’s letter demands that if the company would like to contest or justify non-compliance, it must provide monthly employment numbers for unionized and salaried employees from Nov. 1, 2023, to October 2026.

The letter outlined possible outcomes of court action including Cliffs’ divestiture from Stelco, a directive to comply with the undertakings, a penalty of $10,000 each day Cliffs is not in compliance or suspending Cliffs’ voting rights in the company.

Speaking to reporters in Toronto on Thursday, Joly said the demand letter is an important step in the legal process and represents “concrete action.”

“It is a letter of demand that presents not only the fact that we, as a government, have determined, and I, as Minister of Industry, under the Investment Canada Act, I have determined that there is a breach of the undertakings,” she said. “But also, we detail how and we present the evidence, and so that’s why it’s a necessary process to force them to comply, and that’s why it was so important to send that letter of demand.”

Joly said divestiture is one of the outcomes that is on the table and said there are some potential buyers interested in purchasing Stelco’s Canadian assets.

This is the second letter Joly has sent to the company, after receiving a response on Oct. 9.

Joly’s letter on Wednesday also disputed that Cliffs was unaware of the possibility of U.S. tariffs when it acquired Stelco and signed onto to its commitments.

“The possibility of tariffs on Canadian steel was foreseeable in October 2024, and the Undertakings specifically reflect that possibility,” the letter said. “However, Cliffs’ Chief Executive Officer subsequently advocated for the very tariffs that Cliffs is now relying on as a basis for non-compliance with the Undertakings.”

On Thursday, the Conservative Party’s steel caucus took aim at Joly’s handling of Stelco and noted timelines keep changing.

“Now, 13 days ago, Cleveland Cliffs had basically rejected what the minister had claimed and said that they’re not in breach,” said Conservative MP Michael Guglielmin, during a press conference on Parliament Hill. “Six days ago, Minister Joly had said that we’re only days away from resolving the issue with Stelco and the Stelco workers…today we hear they have 15 days to rehire the workers.”

“Timelines keep shifting, and at the end of the day, workers … can’t deal with warnings,” he added.

Conservative MP Ned Kuruc said he spoke with Stelco workers on Thursday morning.

“Some of the words they were using was ‘Ned, why are these love letters being passed around?’ The workers want action, and I agree,” he said.

Kuruc said the time for letters is over and the government should take Cliffs to court.

National Post

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