Oct 29, 2026
If you work at Stelco, the past month has delivered mixed messages. Ottawa says jobs at the Hamilton steelmaker are protected by binding promises its Ohio-based owner, Cleveland-Cliffs, made when it acquired the company in 2024. Its CEO, Lourenco Goncalves, says the company has kept those promises, and on Oct. 27 he told CBC’s Power & Politics he plans to sell Stelco in about a year.
Goncalves also said he bought Stelco to stop it from flooding the U.S. market with cheaper steel. On Oct. 28, Industry Minister Mélanie Joly said that the government has contacted its lawyers about what she called these “confessions,” and questioned whether the company made its takeover commitments in good faith.
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Meanwhile, the layoffs are moving ahead. Cleveland-Cliffs has laid off 175 workers in Hamilton so far, out of up to 500 planned cuts in Hamilton and Nanticoke, Ontario.
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Why Ottawa’s job promises may not protect your paycheque
Cleveland-Cliffs bought Stelco in a $3.4-billion deal. Federal approval came under the Investment Canada Act, the law governing foreign takeovers, and it was conditional on five years of binding commitments. Joly has accused the company of breaking six of those promises and says Ottawa could go to court, seek financial penalties or force a sale. In an Oct. 22 demand letter, she gave the company 15 days to resolve the issue, which puts the deadline around Nov. 6.
Among those commitments, according to Joly’s letter, was keeping Stelco’s average unionized workforce at no fewer than 1,766 and its salaried workforce at no fewer than 603. Cleveland-Cliffs says it’s in full compliance and that a review of all 34 undertakings shows Stelco has met each one. The company blames U.S. tariffs and weak demand for the cuts, though it said just days before Joly’s letter that Stelco had its strongest quarter since the acquisition.
Either way, those commitments are between the company and the federal government, and workers aren’t a party to them. Stelco has also told Ottawa the undertakings don’t include a commitment to avoid layoffs.
A superior court can order a buyer to honour its undertakings, with penalties of up to $10,000 a day. But union officials worry the legal process could take months. Any legal victory may arrive long after the last paycheque.
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What would a sale mean for Stelco workers?
On Power & Politics, Goncalves said he would sell Stelco after Cleveland-Cliffs operates it for a while longer: “…now that I know that I’m persona non grata in Canada, I will do that.”
Goncalves also objected to Joly publicly discussing potential buyers and insisted the company isn’t on the market. “The Minister of Industry is not a realtor of companies,” he said.
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A new owner isn’t automatically bad news, since a buyer committed to Canadian production could bring jobs back. But a sale would add another layer of uncertainty on top of the layoffs and any resulting court battles. The safer assumption is that nothing will be settled quickly.
Earlier in October, Ron Wells, president of United Steelworkers Local 1005, the union representing Stelco’s Hamilton workers, said only 46 positions are open at Nanticoke for displaced Hamilton workers.
How long can a temporary layoff last in Ontario?
Many of the cuts are tied to idling the cold mill and coating departments in Hamilton. Stelco describes the layoffs as indefinite, while the union considers them temporary under its collective agreement.
That difference matters. Under Ontario’s Employment Standards Act, a temporary layoff for most workers is limited to 13 weeks in any 20 consecutive weeks. It can last longer, but under 35 weeks in any 52, if the employer meets certain conditions, such as continuing substantial payments. For unionized workers, though, a layoff can run longer if the employer recalls them within the time set out in the collective agreement.
For Stelco’s unionized workers, that means the recall rights in their collective agreement will likely decide how long a layoff can last. Goncalves has said he hopes to bring laid-off workers back before Christmas if a plan to boost Canadian sales works out.
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Writer and editor based in Toronto with experience in personal finance, insurance, arts and culture and branded content.
