Joly Rejects Cleveland-Cliffs' Stelco Compliance Report, Demands Recall of 175 Laid-Off Workers Before Any Meeting

Since Stelco announced on Sept. 28 that up to 500 workers could be affected by idled finishing operations in Hamilton and reduced output in Nanticoke, the dispute between Ottawa and the mill's Ohio-based owner has hardened into a standoff. As of Oct. 29, neither side has moved on the central demand.

Joly's second letter

On Thursday, Oct. 29, Industry Minister Mélanie Joly sent Cleveland-Cliffs a new letter rejecting its latest compliance report as "far from satisfactory."

"It does not alter my belief that Stelco and Cleveland-Cliffs are not in compliance with their undertakings under the Investment Canada Act," Joly wrote. "Assertions of compliance are not a substitute for the information and evidence necessary to establish compliance."

She also demanded the immediate recall of laid-off workers before she will meet CEO Lourenco Goncalves. "My message to him is first bring back the jobs and then we'll meet," Joly told reporters. "I want a plan, I want a timeline, and I'm serious about it."

That follows the 15-day deadline she set last week for the company to reverse the layoffs before Ottawa turns to the courts.

What Cleveland-Cliffs says

In a news release issued Oct. 26, Cleveland-Cliffs said that after an "exhaustive review" with legal counsel, Stelco is in full compliance with each of its 34 undertakings made when it bought the steelmaker in 2024.

The company pointed to its employment numbers. For the current reporting period, Stelco expects average annual employment of at least 1,879 bargaining unit full-time equivalents, 113 above the required 1,766. It expects salaried employment to average at least 627, against a required 603.

Those are company projections for a period that closes Oct. 31, not audited results. Stelco is required to update its compliance report after that date, the company said.

The company also noted that on Oct. 23 Stelco asked for a meeting between Joly and Goncalves to discuss resuming full employment of the 175 Hamilton workers it calls "temporarily laid off." The company said Joly had not yet responded. Joly has said she is "always willing to sit down," but only with a plan to bring the jobs back.

Goncalves blames an "avalanche" of imports, specifically non-automotive galvanized steel. The release also took a shot at Ottawa, noting that one element of undertaking 13, on trade advocacy, calls on Cliffs to confront Chinese electric vehicle subsidies. The company said that goal has been "complicated by the Government of Canada's own change in policy toward Chinese EVs."

The 175 versus the 500

The headcount is part of the confusion. Stelco's Sept. 28 announcement said up to 500 workers could be affected. Cleveland-Cliffs and the union have confirmed 175 layoffs so far, all in Hamilton.

United Steelworkers Local 1005 president Ron Wells earlier told CBC that 333 layoffs were expected in Hamilton. Local 8782 president John McElroy said up to 50 were expected at Lake Erie Works in Nanticoke. Those projections have not materialized as confirmed layoffs.

On Wednesday, Oct. 28, Goncalves said he hopes to recall all 175 workers before Christmas if a plan to boost sales of Canadian-made steel to domestic customers works. "It will depend on Canadian customers buying Canadian steel, made by Stelco," he said. "If our plan works, my intention is to call back all the 175 workers before Christmas."

The company cites U.S. tariffs, weak demand and competing imports for the cuts. It said earlier the layoffs would help "ensure the survival" of the business.

The union's view

United Steelworkers national director Marty Warren rejects the market-conditions explanation. "I would say the Cleveland-Cliffs owner is using our plant, our members, as a pawn in the bigger trade deal," he told reporters Thursday.

Warren also disputed Goncalves' account of offshore dumping, saying the United States accounts for the largest share of imported steel competing with Stelco's Hamilton operations.

Tensions rose further after Goncalves told CBC News that the company bought Stelco in part to prevent Canadian steel from flooding the U.S. market. Cleveland-Cliffs separately says it remains a "strong advocate" for the U.S. Section 232 steel tariff policy and favors a "Fortress North America" approach. Goncalves says he wants the same things as Joly and Ontario Premier Doug Ford: a strong Stelco, good jobs in Hamilton and a competitive Canadian steel industry.

Carney weighs in

Prime Minister Mark Carney said at a Montreal news conference Thursday that it would be a mistake for Cleveland-Cliffs to fail to honour the commitments it made when it bought Stelco.

He declined to comment on the possibility of forcing the company to sell Stelco, saying a legal process is underway. The undertakings are legally binding under the Investment Canada Act and include maintaining employment levels for unionized workers and most salaried employees for five years.

Joly said earlier in the week, "we have a very strong case."

What comes next

The two sides now disagree on both the facts and the order of operations. The company says it has met every commitment and wants a meeting first. The minister says the evidence has not been provided and wants jobs restored first.

The next concrete marker is the updated compliance report Stelco must file after the reporting period closes Oct. 31. That filing, and whether Joly's 15-day deadline passes without a recall, will show whether this heads to court.

SteelOrbis reports that Joly said on Oct. 27 she is willing to meet with the company, but only after it presents "a plan to bring the jobs back," and that Cleveland-Cliffs had not yet responded.