Joly escalates lawsuit threat against Stelco owner Cleveland Cliffs

Industry Minister Mélanie Joly has escalated her threats to take legal action against United States-based Cleveland Cliffs Inc., the parent company of Hamilton-based Stelco Holdings, which last month laid off hundreds of steelworkers.

In a letter publicly released on Thursday, she said the company has violated the agreement it made with the federal government in 2024 to obtain approval under the Investment Canada Act for its $3.4-billion purchase of Stelco.

In addition to agreeing to preserve the size of Stelco’s workforce, Joly said Cleveland Cliffs agreed to be a “strong advocate” for policies that benefit both the U.S. and Canadian steel sectors, including working to maintain Canada’s exemption from U.S. steel tariffs.

She said Cleveland Cliffs chief executive Lourenco Goncalves did the exact opposite and advocated for tariffs on Canadian steel and for the failed review of the Canada-U.S.-Mexico Agreement (CUSMA) this summer, pointing to his testimony in January to the Congressional Steel Caucus of the U.S. Congress.

“I am glad that there is a good chance that (CUSMA) will not survive the 2026 review. We need manufacturing in the United States. Not in Canada; not in Mexico,” Goncalves said, according to Joly’s letter.

Neither Goncalves nor Cleveland Cliffs returned requests for comment.

According to Joly’s letter, Cleveland Cliffs has denied breaching its agreement through either its layoffs or its advocacy for U.S. tariffs on Canadian steel.

Through mid-October, approximately 175 union members at Stelco had received layoff notices, according to the letter.

Joly also said Cleveland Cliffs has breached its commitment to spend approximately $2 million per year on charitable and community support for programs such as high school mentoring.

She has given the company 15 days to remedy the situation or else she said her office may take legal action, including seeking an order forcing the company to comply with the agreement or “divest itself of control” of Stelco or face a penalty of not more than $10,000 per day, among other remedies.

The letter comes one day after Prime Minister Mark Carney announced that the federal and Ontario governments would create a $5.22-billion fund to help steel mills upgrade their equipment. It also said it would step up protections against the dumping of unfairly subsidized foreign steel into Canada.