Stelco, a steelmaker based in Hamilton, has announced its decision to move forward with significant job cuts, despite facing potential legal repercussions from the Canadian government. In a letter obtained by CBC News, Stelco Inc., a subsidiary of Cleveland-Cliffs based in Ohio, refuted Ottawa’s claims that it is breaching its binding job commitments under the Investment Canada Act (ICA).
Paul Simon, the president and general counsel at Stelco Inc., dismissed the allegations in the letter addressed to Industry Minister Mélanie Joly. Simon clarified that the planned layoffs do not violate the stipulations outlined in the ICA, emphasizing that the commitments do not mandate avoiding layoffs or maintaining specific employment levels throughout the five-year period.
The dispute escalated after Joly issued an ultimatum to Stelco, demanding a viable plan to safeguard the jobs of up to 500 workers at the Hamilton facility. Ron Wells, the president of United Steelworkers Local 1005, expressed disappointment with Stelco’s response, highlighting the lack of consultation with the union regarding the original agreement.
Cleveland-Cliffs acquired Stelco in a $3.4 billion transaction, emphasizing the preservation of national interests and the workforce’s significance. Joly’s office reiterated the government’s expectation for Stelco to uphold its legally binding commitments to its employees, emphasizing that these obligations remain in effect despite changing market dynamics.
Prime Minister Mark Carney affirmed the government’s determination to enforce compliance with employment obligations, signaling potential legal actions against Cleveland-Cliffs. Stelco’s previous owner, U.S. Steel, faced legal action from Industry Canada in 2009 over job protection issues, which were eventually resolved outside the courtroom in 2011.
In response to Joly, Stelco attributed its current circumstances to external factors beyond its control, such as tariffs imposed by U.S. President Donald Trump and trade disputes. The company contended that the government’s financial support offers were inadequate and failed to address the root causes behind the decision to idle the finishing lines at the Hamilton Works.
Stelco emphasized ongoing communication with the federal government regarding financial concerns, disputing claims of non-cooperation and lack of transparency. The company submitted a plan to adhere to the ICA job commitments in its response to Joly and reiterated its intention to proceed with the Hamilton layoffs due to challenging market conditions.
Stelco proposed potential job opportunities for laid-off workers at its Lake Erie plant and expressed a commitment to engage with the government. The company urged the government to impose stricter restrictions on steel imports to support domestic producers like Stelco.