‘Stelco’s situation is a result of factors beyond its control’
The chief executive of Stelco’s U.S. owner says he is prepared to take the federal government to court rather than reverse the Stelco layoffs underway in Hamilton, Ont.
Lourenco Goncalves, CEO of Ohio-based Cleveland-Cliffs Inc., told CBC’s Rosemary Barton Live that he would fight Ottawa in court to keep the job cuts in place, CBC News reported.
The dispute could become a legal test of the Investment Canada Act. Days earlier, Industry Minister Mélanie Joly gave the company five business days to explain how it would honour its takeover commitments or face a court application, The Canadian Press reported.
Investment Canada Act commitments
Goncalves rejected Ottawa’s reading that the company has breached their contract with the layoffs.
“There is no provision in the contract that I have to keep employment at a certain level every single day of the five years,” he said. “If that was an imposition of the Canadian government, I would not have accepted.”
Joly said the 2024 purchase came with “undertakings to continue to employ at least the same number of unionized employees and the vast majority of non-unionized employees as were employed when the transaction was announced” through 2029, according to CBC News.
In her letter to Stelco president Paul Simon, Joly wrote that the conditions do not lapse just because “business strategy or market conditions have changed,” CP reported. Under the Investment Canada Act, which governs foreign takeovers, a superior court can order a buyer to honour its undertakings and impose penalties of up to $10,000 a day.
Tariff stance complicates defence
Stelco told Joly it would proceed with the layoffs. It called the breach allegation “false” and said that “Stelco’s situation is a result of factors beyond its control,” citing U.S. President Donald Trump’s 50% steel tariffs, CBC News reported.
Goncalves supports those tariffs. “I am in favour of tariffs against all the countries in the entire world that dump steel into the United States,” he told CBC. Asked about selling Stelco, he said: “For a good offer, yes.”
Joly said that undercuts the company’s position. “He’s in favour of these U.S. tariffs against steel,” she told reporters on Oct. 7, 2026, according to CP. “They cannot say that this is now an act of God or force majeure.”
Goncalves made a similar case when the cuts were announced, as detailed in our report on the Cleveland-Cliffs CEO defending the idling of the Hamilton plant.
Workers press Stelco for a recall plan
Hamilton Mayor Andrea Horwath questioned the timing. “It was a five-year agreement, so it’s not even halfway through yet, and here we are with the threat of layoffs literally in a couple of days,” she said, according to BNN Bloomberg.
Ron Wells, president of United Steelworkers (USW) Local 1005 in Hamilton, told CBC News that 300 to 350 Hamilton layoffs will roll out over three weeks, with more at Lake Erie Works in Nanticoke, Ont. “I hope, basically, the federal government makes an example out of them,” he said.
Wells told CP that the company calls the cuts indefinite, while the union treats them as temporary under its collective agreement – a distinction that can shape recall rights and termination obligations.
The cuts follow Algoma Steel’s decision to issue about 1,000 layoff notices in Sault Ste. Marie, as Canada’s broader trade war with the United States continues.
