Ottawa gives Stelco 15 days to reverse Hamilton layoffs or face lawsuit

Industry Minister Melanie Joly has written to Canadian steel maker Stelco warning if they do not reverse the layoffs of up to 500 workers at their Hamilton steel plant within 15 days, the federal government will start legal action against the company, according to a letter obtained by Global News.

The government maintains Stelco’s U.S. parent company, Cleveland-Cliffs, has broken a 2024 agreement with Ottawa that stated they would not lay off anyone in Canada until 2029.

The text of that agreement had not been made public until Joly’s letter, which states the company agreed that “the average aggregate annual employment” of unionized employees in Canada would be “no lower than 1,766, representing 100% of the average aggregate annual full-time equivalent employment of the 12 months ending June 30, 2024.”

Stelco has maintained that they have not broken that agreement, writing to the minister saying Stelco does not need to maintain the same employment level for each day of the agreement with Ottawa.

If the company does not reverse the layoffs, which they have said publicly said multiple times they will will not, Joly warns she will proceed with court action that could see the company be forced to sell their Canadian operations.

A senior government source has told Global News that while legal action is an option, the Carney government recognizes the legal process will take too long to save the jobs in Hamilton and keep the plant fully functioning, leaving Ottawa looking for a faster solution.