{"id":917510,"date":"2026-10-02T06:30:10","date_gmt":"2026-10-02T06:30:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/917510\/"},"modified":"2026-10-02T06:30:10","modified_gmt":"2026-10-02T06:30:10","slug":"cleveland-cliffs-ceo-questions-logic-of-ottawa-potentially-suing-over-stelco-layoffs","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/917510\/","title":{"rendered":"Cleveland-Cliffs CEO questions logic of Ottawa potentially suing over Stelco layoffs"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

The Stelco Hamilton Works steel mill, owned by American steelmaker Cleveland-Cliffs, in Hamilton on Tuesday.Carlos Osorio\/Reuters<\/p>\n

Cleveland-Cliffs Inc. CEO Lourenco Goncalves says Ottawa\u2019s potential lawsuit against the American steelmaker for allegedly violating employment commitments in Canada makes no business sense, promising that laid-off workers will be called back if the trade war<\/a> ends soon. <\/p>\n

On Monday, the Cleveland-based steelmaker said it plans to lay off a total of up to 500 workers<\/a> at Stelco\u2019s Hamilton plant and its Lake Erie Works operation in Nanticoke, Ont. The company said the layoffs were necessary to ensure its survival during the conflict.<\/p>\n

When the federal government approved Cliffs\u2019 $3.4-billion acquisition of Stelco Holdings Inc. in 2024, it imposed a series of legally binding conditions, including maintaining for five years at least the same number of unionized employees<\/a> in Canada, and the vast majority of non-unionized workers.<\/p>\n

At the time, Stelco employed approximately 2,400 people in Hamilton and Nanticoke, according to data from Ron Wells, president of United Steelworkers Local 1005, and that number remains roughly the same.<\/p>\n

Six charts that explain Canada\u2019s countertariffs on U.S. goods<\/a><\/p>\n

Now with hundreds of layoffs imminent, Prime Minister Mark Carney said that the government is considering legal action against Cliffs for not living up to its employment guarantees. <\/p>\n

\u201cThe company made representations, and has legal obligations for employment,\u201d Mr. Carney said in a news conference on Wednesday<\/a>. \u201cWe intend to use all powers that we have, and pursue them to the fullest extent of the law.\u201d<\/p>\n

There is legal precedent that the government can look to as it weighs suing Cliffs. After U.S. Steel acquired Stelco in 2007, it made promises under the Investment Canada Act around jobs and production levels. The federal government later sued the company for allegedly reneging on its legally binding commitments. <\/p>\n

A settlement was reached in 2011<\/a>, with the American steelmaker agreeing to new terms.<\/p>\n

In an interview with The Globe and Mail on Thursday, Mr. Goncalves said that he takes the Prime Minister seriously. \u201cHe said that he will sue us. But is this a good business decision for Canada? I don\u2019t think so.\u201d<\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Prime Minister Mark Carney in North Vancouver, B.C., on Tuesday.DARRYL DYCK\/The Canadian Press<\/p>\n

Two years ago, Mr. Goncalves said the Canadian government \u201crolled out the red carpet\u201d for the company when it announced its intentions to buy Stelco. <\/p>\n

\u201cI believed in Stelco. I believed in Canada. I believed in the USMCA,\u201d said Mr. Goncalves, referring to the United States-Mexico-Canada Agreement, which saw Canada and the U.S. trade tariff-free in steel. <\/p>\n

But since then, the market has changed dramatically. Owing to the 50-per-cent tariffs<\/a> imposed last year by U.S. President Donald Trump, Stelco can\u2019t sell galvanized steel into the U.S. any more because the business is uneconomic. <\/p>\n

\u201cThe underlying condition of the market changed a lot, and it was beyond my control,\u201d he said. <\/p>\n

Ottawa launches $100-million steel shipping rebate program as U.S. tariffs weigh on industry<\/a><\/p>\n

Meanwhile, if a trade pact on steel between Canada and the U.S. is reached soon, Cliffs intends to recall all the laid-off workers, Mr. Goncalves said. <\/p>\n

The federal government, however, has been critical of Cliffs\u2019 decision not to accept financial aid that was on the table for the company\u2019s Canadian operations. <\/p>\n

Gabrielle Landry, deputy director, media relations with the Office of Industry Minister M\u00e9lanie Joly, told The Globe earlier this week that Cliffs\u2019 decision was \u201cextremely disappointing<\/a>.\u201d<\/p>\n

Mr. Goncalves said he declined the government\u2019s offer because it wouldn\u2019t have addressed the root problem, comparing the situation to a doctor offering a sick patient cash instead of prescribing a drug to cure their illness. <\/p>\n

Accepting money from Ottawa would have not made sense, he said, because the company had no need for it for operating or capital expenditures. <\/p>\n

Ford calls on Ottawa to do more to help tariff-hit steel and auto sectors<\/a><\/p>\n

The medicine the company needs most, he said, is for Canada to reach an agreement with the U.S. that will see the steel tariffs reduced to 25 per cent, or lower, a level that would allow Stelco to once again compete in the U.S. <\/p>\n

\u201cI\u2019m not asking for anything other than allow me to have a market to sell my galvanized steel,\u201d he said. \u201cThat will resolve the problem.\u201d <\/p>\n

Mr. Carney made it clear on Wednesday that Mr. Goncalves\u2019s public backing of Mr. Trump\u2019s tariffs irked him, pointing out that he \u201capplauded President Trump for putting those tariffs on.\u201d<\/p>\n

Indeed, the Brazilian-born Mr. Goncalves in a conference call last year thanked the Trump administration for having \u201cthe courage to implement these tariffs.\u201d<\/p>\n

But Mr. Goncalves said those comments shouldn\u2019t be perceived as an attack on Canada, but rather as support for Mr. Trump\u2019s policies to bolster the steel industry in the U.S., in part by cracking down on imports of cheap foreign steel.<\/p>\n

G20 Steel forum calls for more tariffs, fewer subsidies to fight excess capacity<\/a><\/p>\n

Mr. Goncalves said he was in favour of a \u201cFortress North America\u201d approach that would see the U.S., Canada and Mexico band together to keep out cheap imports and bring more jobs and investment back to North America. <\/p>\n

The federal and provincial governments have rolled out multiple initiatives to help the domestic steel industry, including providing hundreds of millions of dollars in funding, most notably a $500-million loan to Algoma Steel Group Inc<\/a>. <\/p>\n

Ottawa has also aggressively cracked down on the dumping of foreign steel into Canada through the imposition of tariff-rate quotas and mandated that publicly funded projects use Canadian steel wherever possible.<\/p>\n

Mr. Goncalves said the Canadian government\u2019s various moves have helped Stelco compete far better in the hot rolled steel segment, but more needs to be done in the galvanized segment. <\/p>\n

\u201cIn galvanized steel, we don\u2019t have a business,\u201d he said. <\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: The Stelco Hamilton Works steel mill, owned by American steelmaker Cleveland-Cliffs, in Hamilton…\n","protected":false},"author":2,"featured_media":917511,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-917510","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/917510","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=917510"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/917510\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/917511"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=917510"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=917510"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=917510"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}