Canada threatens to force sale of Stelco assets over planned job cuts

Canadian Industry Minister Mélanie Joly warned Ohio-based Cleveland-Cliffs Inc. on Oct. 16, 2026, that Ottawa is prepared to force a sale of its Canadian assets if the steelmaker breaks job commitments by laying off up to 500 workers.

Speaking at the Canadian Club in Toronto, Joly said Cleveland-Cliffs must honor the employment pledges it made under the Investment Canada Act when it acquired Hamilton-based Stelco in 2024. Under those approval terms, the federal government stated that the company committed to maintaining its Canadian workforce for five years.

Cleveland-Cliffs announced plans to shut down parts of its Hamilton operations, including the idling of its cold mill and coating departments, affecting workforce numbers across its Hamilton and Lake Erie facilities. The company attributed the planned cuts of up to 500 jobs to low steel prices and tariffs imposed by U.S. President Donald Trump.

Union figures show the reductions have already begun. United Steelworkers Local 1005 reported that 90 unionized workers at the Hamilton plant received layoff notices in early October, with an additional 85 workers expected to be affected.

Joly criticized Cleveland-Cliffs for backing U.S. tariff measures while scaling back Canadian production. "Cleveland Cliffs must uphold its commitments. Full stop," Joly said, according to BNN Bloomberg. She stated that "everything is on the table" to protect domestic manufacturing, including financial penalties and forced asset divestment.

Company response and legal options

In an interview with BNN Bloomberg, Cleveland-Cliffs Chief Executive Officer Lourenco Goncalves accused federal officials of bullying and harassment. Goncalves stated that the decision to issue layoff notices was a temporary business decision caused by trade tariffs rather than a violation of the acquisition deal.

Joly rejected the argument that market shifts justify breaking federal agreements, emphasizing that the Hamilton facility produces steel vital to the domestic manufacturing sector. To enforce compliance, Ottawa has retained legal counsel and is exploring options that include taking equity positions in Canadian steelmakers if required.