Carney says U.S. owner has legal employment obligations, while CEO insists ‘no amount of money’ could have changed decision
A dispute over the future of up to 500 Stelco jobs has escalated into a public confrontation between the federal government and the steelmaker's U.S. parent, Cleveland-Cliffs, with Prime Minister Mark Carney threatening legal action and the company's chief executive saying federal money could not have prevented the cuts.
Stelco announced Monday that it will indefinitely idle the cold mill and galvanized, or coated, steel operations at its Hamilton plant on Oct. 9, citing U.S. tariffs and low steel prices in Canada. The company said up to 500 workers across its Hamilton and Nanticoke, Ont., facilities could be affected, and that production will be concentrated at its Lake Erie Works in Nanticoke.
Union leaders estimate about 350 of the affected workers are in Hamilton. John McElroy, president of the Nanticoke local, said that facility is expected to lose 60 to 80 members, according to the Hamilton Spectator.
Carney says workers ‘betrayed’
Finance Minister Peter Bethlenfalvy said Tuesday that Stelco did not apply for provincial tariff relief before it plans for Oct. 9, according to the Western Standard. He told reporters the US-owned mill never requested aid offered to companies hit by President Donald Trump’s tariffs.
The Protect Ontario Financing Program was built for steel, aluminum, copper, and auto firms facing Section 232 and later US measures, says the report. It has been widened it this week to alcohol, dairy, and motorcycle shops.
The office of Industry Minister Mélanie Joly said in an email to The Spectator that the government had made clear to the company for some time that it was prepared to provide financial support to sustain operations and protect jobs, and described the company's decision to reject those proposals as "extremely disappointing."
Speaking at a press conference in North Vancouver on Tuesday, Carney accused Cleveland-Cliffs of betraying Canadian workers and singled out its chairman and CEO, Lourenco Goncalves, for having applauded Trump's 50 per cent steel tariffs, according to the Associated Press.
"Our thoughts are with the workers and the families who have been betrayed by the company," Carney said.
The prime minister said Ottawa had offered financial support to keep workers on the job, though he did not disclose the amount or terms.
"There's money on the table from the federal government, number one, and the company made representations and has legal obligations for employment," Carney said. "We intend to use all powers that we have and pursue them to the fullest extent of the law.”
The 2024 takeover conditions
At the centre of the dispute are the conditions Ottawa attached when it approved Cleveland-Cliffs' purchase of Stelco in October 2024. According to The Spectator, François-Philippe Champagne, then the industry minister, said at the time that the sale came with conditions the company was legally bound to follow for five years. Among them, Cleveland-Cliffs was required to maintain at least as many unionized workers — and the vast majority of non-unionized workers — as Stelco employed when the deal was announced. The full list of conditions was never made public.
John-Paul Danko, Liberal MP for Hamilton West—Ancaster—Dundas, said Monday that "if there are obligations that Stelco and Cleveland-Cliffs are not meeting, absolutely we will take every measure necessary to hold them accountable."
A spokesperson for Vic Fedeli, Ontario's minister of economic development, said the federal government was reviewing its legal options to protect Stelco's workers, according to the Hamilton Spectator.
Colin Mang, an assistant professor of economics at McMaster University, told The Spectator that even if Cleveland-Cliffs is found to have breached the conditions, the only available recourse would be fines, which could be appealed.
"If they challenge the fines in court on the argument that the entire economic environment has changed and that it's not viable to continue, I think they would have a strong case," Mang said.
Goncalves: 'There's no market in Canada'
In an interview with Global News, Goncalves said the decision was purely market-driven and that no financial incentive could resolve the underlying problem.
"I'm not shutting down, I'm not dismantling," he said. "There's no market in Canada for the amount of galvanized steel we produce in Canada. We need to export… to the United States."
He said that even a complete ban on galvanized steel imports into Canada would leave domestic production exceeding domestic demand. "There's only one solution. We need to be able to export."
Sources with knowledge of the talks told Global News that Ottawa offered short-term bridge financing, longer-term loans, retrofitting support and access to new Canadian markets in an effort to delay the layoffs. One source, speaking on condition of anonymity, alleged Goncalves rejected the offers and would accept help only in the form of "a blank cheque to the tune of billions with no conditions."
Goncalves denied the claim. "That's not true. That's a completely untruthful statement," he told Global News.
The CEO rejected suggestions, attributed by Global News to federal sources, that his relationship with the Trump administration was a factor in the decision. "That's a fallacy, that's absurd," he said, noting he has worked with both Republican and Democratic administrations over 45 years in the industry.
"I bought Stelco based on the premise that Canada and the United States are friends. They were friends, when I closed the deal," he said. "[Now] they are no longer friends."
