Canada Gives Cleveland-Cliffs 15 Days to Address Alleged Stelco Deal Violations

The Canadian government has given Cleveland-Cliffs 15 days to address alleged violations of commitments made when it acquired Ontario steelmaker Stelco Inc. in 2024, warning that failure to comply could lead to legal action. In an 11-page letter issued Thursday, Industry Minister Melanie Joly accused the United States-based steel company of failing to honour six binding commitments, including guarantees related to employment and support for Canada's steel industry.

Layoffs Spark Government Concerns

The dispute follows Cleveland-Cliffs' announcement on September 28 that it planned to lay off up to 500 workers at Stelco's Hamilton Works and Lake Erie Works in Ontario. The company cited U.S. tariffs and difficult market conditions as reasons for the planned job cuts. Joly also accused Cleveland-Cliffs of supporting U.S. tariffs on Canadian steel despite its commitment to back Canada's steel industry, and subsequently using those tariffs to justify layoffs.

Employment Commitments Under Scrutiny

The letter details employment guarantees included in the 2024 acquisition agreement. These required Cleveland-Cliffs to maintain an annual average of at least 1,766 full-time-equivalent unionized workers and 603 full-time-equivalent salaried workers. The federal government has asked the company to address the alleged violations, demonstrate that it has complied with its commitments or explain why it has failed to meet them.

Possible Legal Action

Joly warned that if Cleveland-Cliffs fails to satisfy the government's demands within 15 days, Ottawa could seek remedies through a superior court. One possible remedy outlined in the letter is an order requiring the company to divest control of Stelco. The dispute places the company's employment plans and its obligations under the acquisition agreement at the centre of a growing disagreement with the Canadian government.

CTV News