Stelco has achieved its most profitable quarterly performance since its acquisition by Cleveland-Cliffs, yet the company is moving forward with up to 500 layoffs across its Ontario sites. CEO Lourenco Goncalves announced these conflicting developments during an earnings call on October 19, 2026.
The 500-job cut amidst a record Cleveland-Cliffs quarter
Despite the workforce reductions, Stelco has become a positive financial contributor to its parent company, Cleveland-Cliffs Inc., for the third quarter ending September 30. According to The Canadian Press, the steelmaker posted its strongest results since the U.S.-based Cleveland-Cliffs acquired the company two years ago. This financial surge was driven primarily by a significant recovery in the Canadian market for hot-rolled steel.
The disparity between record profits and job losses highlights a strategic shift within the organization. While total production tonnage at Stelco will be maintained, the company is pivoting its resources toward products that currently possess a viable market. Lourenco Goncalves noted that while 2,000 Canadian jobs are being preserved, the cuts are a necessary reaction to specific sector failures.
Why Lourenco Goncalves is demanding Ottawa block galvanized steel imports
The layoffs are centered on the production of galvanized steel, which Lourenco Goncalves claims is suffering from a massive oversupply. During an October 19 appearance on BNN Bloomberg, Goncalves described an "avalanche of imports" that has made the domestic market untenable. He argued that the Canadian government possesses the existing legal power to block or severely restrict these imports to protect domestic industry.
As reported by The Canadian Press, Goncalves made a direct promise: if the federal government in Ottawa implements tighter import restrictions on galvanized steel, Stelco can immediately reinstate all temporarily laid-off workers. The CEO is essentially linking the employment of 500 workers to a change in national trade policy, asserting that the domestic market is simply too small to support the current level of import penetration.
The rivalry between Stelco and ArcelorMittal Dofasco in a shrinking market
The struggle for galvanized steel dominance is not just a battle against imports, but a struggle for survival between two domestic giants. Lourenco Goncalves explicitly named Stelco and ArcelorMittal Dofasco as the only two producers of galvanized steel in Canada, claiming the market cannot accommodate both if imports continue unabated. This creates a precarious environment where the failure of one could lead to a monopoly, or the failure of both could leave Canada entirely dependent on foreign steel.
This tension echoes a broader trend of industrial consolidation seen across North American manufacturing, where companies leverage workforce instabilitty to secure protectionist measures. By focusing on hot-rolled products at the Lake Erie Works in Nanticoke , Ontario—which serves the pipeline and construction sectors—Stelco is hedging its bets against the volatility of the coated steel market.
The rejected government funding and the fate of the Hamilton Works
In a notable rejection of state aid, Lourenco Goncalves stated that the Canadian government offered financial support to Stelco, but the company declined it. Goncalves argued that "government money cannot buy a market," insisting that structural trade protections are the only sustainable solution for the workers at the Hamilton Works, where cold-rolled and coated products are processed for the automotive and agriculture sectors.
Several critical details remain unverified in the current reporting. It is unclear which specific countries are the primary sources of the "avalanche" of imports Goncalves cited, nor has the Canadian government officially responded to the demand for immediate import blocks. Furthermore, while the CEO claims workers could be brought back "immediately," the report does not specify the legal or contractual terms of these "temporary" layoffs, leaving the actual timeline for reinstatement uncertain.
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