Ottawa demands timeline for Stelco job guarantees as recall plan emerges

HAMILTON · The federal government is demanding a firm timeline from Cleveland-Cliffs to recall 175 laid-off Stelco workers and is considering legal action over alleged breaches of job guarantees made during its 2024 acquisition of the Canadian steelmaker. Industry Minister Mélanie Joly has warned the company could be forced to sell Stelco if it fails to honour its commitments. The dispute centres on binding undertakings Cleveland-Cliffs made under the Investment Canada Act. CEO Lourenco Goncalves has said a recall of all 175 workers before Christmas is possible, but it depends on stronger domestic steel sales.

Goncalves outlined the conditional recall plan in a statement. “It will depend on Canadian customers buying Canadian steel, made by Stelco. If our plan works, my intention is to call back all the 175 workers before Christmas,” he said. The company later confirmed the layoffs, which all occurred at the Hamilton Works facility, after initially warning in September that up to 500 workers at Hamilton and Lake Erie Works could be affected. Ron Wells, president of United Steelworkers Local 1005, confirmed the figure and said no layoffs happened at Lake Erie Works.

Joly has demanded a concrete plan from the company. “We need a real plan from them to show us they are working in good faith. The clock is ticking,” she said. Under the Investment Canada Act's enforcement provisions, unresolved breaches can lead to court proceedings, financial penalties or divestiture orders. Federal officials are also consulting lawyers about implications from Goncalves's recent remarks to CBC News, where he said, “I bought Stelco because I could not afford anymore having Stelco flooding the market here in the United States to the detriment of my own company.”

Goncalves said sales expectations following the acquisition have not been met. He told The Canadian Press that the company believed it could sell cold rolled and galvanized steel within the Canadian domestic market, but that part did not materialize and has not improved yet. He maintains that Cleveland-Cliffs is complying with its commitments and has ruled out selling Stelco over the next calendar year. The legality of the layoffs remains contested, as federal acquisition commitments and provincial employment obligations are governed by separate legal frameworks. Under Ontario's Employment Standards Act, rules on temporary layoffs generally allow layoffs of up to 13 weeks within 20 consecutive weeks, or less than 35 weeks within 52 weeks under specified conditions. Unionized workers may also have recall rights under collective agreements, but compliance with these provincial requirements does not necessarily satisfy federal employment guarantees. The dispute highlights the separate legal obligations employers face during temporary layoffs.

With files from The Canadian Press and Human Resources Director