Ottawa gives Stelco owner 15 days to reverse layoffs or face court

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OTTAWA — Canada is through with asking nicely.

On Thursday, Industry Minister Melanie Joly fired off a formal demand letter to Stelco owner Cleveland-Cliffs, giving the Ohio-based steelmaker 15 days to reverse plans to cut up to 500 jobs or face the consequences.

“Let me be clear: no act of god or change in market conditions can relieve Cleveland-Cliffs of the commitments it made to Canada,” Joly said in a statement posted to social media.

“Those commitments are not optional.”

CEO said layoffs inevitable, prepared to take Ottawa to court

On Sept. 28, Cleveland-Cliffs announced plans to lay off up to 500 workers at Stelco’s Hamilton and Nanticoke operations, with the first notices being sent to workers on Oct. 7.

Blaming economic strain caused by U.S. President Donald Trump’s trade war against Canada, Cleveland-Cliffs CEO Lourenco Goncalves said the company had no choice but to cut jobs.

But Joly says Cleveland-Cliffs promised Ottawa in 2024, under the Investment Canada Act, to keep at least 1,766 unionized workers and 603 salaried staff on the job for five years.

“There is no provision in the contract that I have to keep employment at a certain level every single day of the five years,” Goncalves said last week during a televised interview with CBC News, saying he never would have accepted the deal under such terms.

Joly demanded Cliffs find a way to save those 500 jobs or face legal action.

During the CBC interview, Goncalves said he’d consider selling Stelco if the right offer was made.

Company could be forced to sell Stelco

Thursday’s demand letter from Joly, issued under Sec. 39 of the Investment Canada Act, is the government’s first step towards enforcing their deal with Cliffs.

If Cleveland-Cliffs doesn’t comply, Ottawa can take the matter to court, where a judge could impose fines of up to $10,000 a day, order the company to honour its obligations, or force a sale of its Canadian assets.

The Toronto Sun has reached out to Cleveland-Cliffs for comment.

“Despite being given multiple opportunities, Cleveland-Cliffs has repeatedly failed to demonstrate that they are compliant with their undertakings. This is unacceptable,” Joly wrote in her statement Thursday.

“Moreover, the leadership of Cleveland-Cliffs has made extensive comments championing and taking credit for the very same US tariffs that caused this change in market conditions. I would also note that the advocacy for those tariffs goes against the interests of his employees, on both sides of the border, and is in direct violation of their undertakings.”

This isn’t the first time Stelco’s been involved in a cross-border tug-of-war.

In 2009, then-industry minister Tony Clement sent a similar demand to the plant’s previous American owner, U.S. Steel.

That dispute, which was settled two years later, involved U.S. Steel’s plans to lay off around 1,500 Stelco workers in response to the 2008-09 recession.

Joly said she remains willing to meet with the company.

bpassifiume@postmedia.com
X: @bryanpassifiume

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