'This is an unfortunate but necessary action,' says VP of sales
Stelco Holdings Inc. will be laying off up to 500 employees amid trade war tensions. This comes as the company indefinitely idles cold-rolled and coated operations at its Hamilton Works plant.
The wind-down begins Oct. 9, according to a company memo obtained by CBC News.
"This is an unfortunate but necessary action to help ensure the survival of Stelco in what has become a challenging and unsustainable market for cold-rolled and coated products caused by the ongoing and sustained trade disruptions impacting the Canadian steel industry," said vice-president of sales Frederic Fafard in the memo.
The memo blames U.S. tariffs and says demand for Stelco's cold-rolled and galvanized products in its traditional markets fell by almost 25 per cent in the second quarter of 2026 compared with the 2024 quarterly average. The layoffs involve the Hamilton and Lake Erie facilities.
"While the measures taken by the federal government in Canada have served to reduce imports into Canada overall, import volumes remain at levels that prevent Stelco from being able to bridge the gap in the market created by the trade crisis," said Fafard.
The cuts follow Algoma Steel layoffs announced in December 2025 of more than 1,000 layoffs in Sault Ste. Marie, Ont.
Stakeholders react to Stelco layoffs
Ron Wells, president of United Steelworkers (USW) Local 1005 in Hamilton, estimates 350 steelworkers will be laid off. "Christmas ain't that far away, and we have no idea the duration of these layoffs," he tells CBC News.
Ohio-based Cleveland-Cliffs Inc. bought Stelco in November 2024. Federal approval required it to keep employing at least the same number of unionized employees for five years, according to an October 2024 ministerial statement.
Industry Minister Mélanie Joly says Ottawa offered Stelco financial support: "Its decision to reject these practical proposals and continue with layoffs is extremely disappointing," she said in a statement reported by CBC News.
"Days like today demonstrate how challenging the tariff situation is, and provide a stark reminder as to the urgency of finding a solution," Blair Dickerson, president of the Canadian Steel Producers Association, told the media outlet.
Cleveland-Cliffs says output will not change as production consolidates at Lake Erie Works in Nanticoke, Ont. "We expect that a significant number of employees affected by the indefinite idle at Hamilton should be absorbed at Lake Erie Works," spokesperson Pat Persico says in an email to CBC News.
For laid-off workers, Ottawa's August 2026 tariff package extends by one year the temporary Employment Insurance (EI) waiver of the one-week waiting period.
