The Stelco Hamilton Works steel mill in August. The company’s U.S. owner is planning layoffs at the facility as it shifts focus to another Ontario site.Carlos Osorio/Reuters
Stelco Holdings is set to lay off hundreds of steel workers in southern Ontario as it shuts down a major part of its Hamilton plant with the company citing pain from the U.S. trade war.
In a memo to staff obtained by The Globe and Mail, Paul Simon, president and general counsel at Stelco said around Oct 9 it will shut down its cold-rolled and coated operations at Hamilton Works.
Mr. Simon said that following the tariffs imposed last year by the United States Stelco’s cold rolled and galvanized markets contracted significantly, falling by almost 25 per cent in the second quarter of this year compared to average 2024 levels.
“This is an unfortunate but necessary action to ensure survival of Stelco in what has become a challenging and unsustainable steel market for these the products,” he wrote in the memo.
He said that as many as 500 employees will be impacted in both Hamilton and Lake Erie Works.
Ron Wells, president of USW local 1005 said that the closure of the cold rolled section of the Hamilton plant will result in 350 layoffs. At Lake Erie Works, which employs between 130 and 150, most of that workforce will be laid off, he added.
“It’s tough news. It’s devastating,“ he said. ”I mean Christmas really isn’t that far away.”
Pat Persico, senior director, corporate communications, with the company’s U.S. parent, Cleveland-Cliffs Inc. CLF-N, told The Globe and Mail in an e-mail that Stelco plans to concentrate its steel production at Lake Erie Works in Nanticoke, Ont., which is south of Hamilton.
She said that total tonnage of steel produced will not be affected, but there will be a change in the product mix, with a higher concentration of hot rolled steel products.
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In addition, she said jobs will be offered to many of the Hamilton employees hit by layoffs.
“We expect that a significant number of employees affected by the indefinite idle at Hamilton should be absorbed at Lake Erie Works,” she said.
Mr. Wells said that only 46 job opportunities at Lake Erie Works are open to workers in the Hamilton cold rolled plant that are facing layoffs.
“That’s not a very significant number when you’re taking about that many people out of work,” he said.
Canada’s steel sector has been throttled by 50-per-cent tariffs imposed by U.S. President Donald Trump last year. The tariffs have by and large closed off the American market for some Canadian steelmakers.
Since Mr. Trump’s trade war was launched, the federal and provincial governments have rolled out multiple initiatives to help the steel industry, including providing hundreds of millions of dollars in direct funding, cracking down on the dumping of foreign steel into Canada and mandating that publicly funded projects use Canadian steel wherever possible.
“While the measures taken by the federal government in Canada have served to reduce imports into Canada overall, import volumes remain at levels that prevent Stelco from being able to bridge the gap in the market created by the trade crisis,” Mr. Simon said in the Stelco memo on Monday.
Lourenco Goncalves, CEO of Cliffs, said in a July earnings conference call that more needed to be done at the government level.
“Stelco is still lagging,” he said. “Without further measures to protect fair trade in Canada, the future competitiveness of our galvanizing lines in Hamilton is at risk.”
The Brazilian-born Mr. Goncalves has been a cheerleader for Mr. Trump’s aggressive trade policies on steel.
“We thank the Trump administration,” he said in a February conference call last year, for having “the courage to implement these tariffs.”
Cleveland-based Cliffs acquired Stelco in 2024 for about $3.4-billion.