Canada’s federal government has formally demanded that Cleveland Cliffs abandon plans to lay off Canadian workers, giving the company 15 days to comply or face hefty fines or a forced sale of its Canadian assets. Industry Minister Melanie Joly said the layoff plans, affecting workers at two Ontario plants of Stelco, would violate commitments the United States company made when it secured Canadian approval for its 2024 takeover of Stelco.
Joly’s letter was blunt. No act of God or change in market conditions can relieve Cleveland Cliffs of the commitments it made to Canada, she said, adding that those commitments are not optional.
Cliffs chief executive Lourenco Goncalves told the Wall Street Journal last week that the company has not breached the law and that a temporary reduction in headcount is needed as it refocuses operations to counter pressure on the industry from United States tariffs. The company did not immediately respond to a request for comment on the formal threat. Stelco plans to idle cold rolled and coated operations at Hamilton Works indefinitely, with as many as 500 unionised workers affected in earlier reporting of the plan.
Jurisdiction watch: this is an investment review commitment being enforced as an industrial policy tool, in the same week Ottawa matched a billion dollars for Ring of Fire roads and joined an 8.7 billion dollar Ontario steel, auto and critical minerals package. The legal fight will be slow by precedent, but the 15 day deadline makes the company’s response the next catalyst, for the workers and for Cliffs’ Canadian asset base.