Stelco owner Cleveland-Cliffs proceeds with Hamilton layoffs as Ottawa threatens legal action Cleveland-Cliffs is moving ahead with layoffs at Stelco's Hamilton plant despite federal threats of legal action, as Ottawa says the cuts breach commitments made under the Investment Canada Act. More layoff notices have been handed out to unionized workers at Stelco's plant in Hamilton, Ont. , as the company moves ahead with idling its cold mill and coating departments despite threats from Ottawa to take the company to court. Cleveland-Cliffs Proceeds with Layoffs Despite Government OppositionCleveland-Cliffs, the American company that owns the Stelco plant, is going ahead with hundreds of layoffs despite a threat of legal action from the Canadian government. The company announced last month that pressure from U.S. tariffs forced it to concentrate steel production at its Lake Erie Works plant in Haldimand and halt production at its Hamilton plant.Although the company said some of those workers would be offered positions at the Haldimand facility, hundreds are still expected to be out of work. Up to 500 jobs are expected to be cut. Industry Minister Melanie Joly said everything is on the table, including a forced divestment of assets or financial penalties if the company does not heed the federal government's warnings to stop the cuts.Ottawa Threatens Legal Action to Protect Stelco JobsWe expect Stelco to follow the undertakings they've committed to the government of Canada, Joly told reporters Wednesday. And right now a business decision, or even a change in market conditions, cannot be used to not follow the commitment. Joly said she is not backing down. I'm always open to sit down with the company and find a solution, but we're looking at everything to keep jobs in Canada, she said.Stelco's letter, obtained by Global News, was dated Oct. 9 in response to one sent by Joly on Oct. 5, in which she gave the company an ultimatum and five days to respond. Joly's letter expressed extreme disappointment and claimed the layoffs constitute a direct breach of the company's commitments under the Investment Canada Act. Stelco maintained in its response that it has not done anything wrong and claims the accusations from the federal government are false.Company Blames U.S. Tariffs for Forced RestructuringCleveland-Cliffs said in the letter that it does not believe the layoffs breach any undertakings Stelco agreed to in 2024. The company maintains it has no choice, citing low steel prices and U.S. President Donald Trump's tariffs. The seven-page letter said exports of cold-rolled and coated steel to the United States have plunged 58 per cent from pre-trade-war levels as foreign imports continue to undercut Canadian-made steel.Simon also claimed in the letter that the company was open and transparent with the federal government for several months about its struggles. Our early September meetings with several senior government officials, including representatives from your office, led Stelco to believe that the government understood the market realities confronting Stelco's Hamilton Works finishing lines, the letter said. Stelco submitted its annual report confirming its compliance with the employment undertakings in November 2025.Government Challenges Stelco's Compliance with Investment TermsThat report highlighted that Stelco was facing significant challenges. Ottawa rejected that argument, noting that the company's own CEO has publicly supported the tariffs. Joly told reporters last week that the chief executive of U.S.-based Cleveland-Cliffs, which acquired Stelco in 2024, has supported steel tariffs and therefore cannot characterize the company's plan to lay off up to 500 workers due to tariffs and market pressures as beyond its control.He's in favor of these U.S. tariffs against steel, she said, referring to Cleveland-Cliffs CEO Lourenco Goncalves' public support of American steel tariffs. The government says Cleveland-Cliffs made a series of commitments when it acquired the Ontario steelmaker, including preserving jobs and the Stelco name, maintaining and expanding its Canadian operations, generating cost savings, broadening its customer base and supporting unionized steel jobs.Workers and Locals Advocate for Job Preservation Amid DisputeIn a release from 2024, Cleveland-Cliffs announced the agreed acquisition of Stelco and said they would maintain significant employment levels in Canada and Canadian representation on the management team.The commitments included respecting Stelco's historic brand by carrying on operations under the name Stelco, a Cleveland-Cliffs Company; maintaining Stelco's head office in Hamilton with responsibility for day-to-day operations; continuing to employ at least the same number of unionized employees and the vast majority of non-unionized employees as were employed when the transaction was announced; honouring all existing collective bargaining agreements and employee benefit and pension commitments; making significant capital and research and development expenditures; and ensuring Stelco's Scope 1 and Scope 2 greenhouse gas emission intensity do not increase and continue to be at least 25 per cent below the global average for integrated steel mills.Business lawyer Nassira El Hadri said the government appears to have moved past asking Cleveland-Cliffs to justify the layoffs, and is also asking for a plan outlining how it will comply with all of its undertakings. They are not asking for an explanation, said El Hadri, founder of Hadri Law in Toronto. They're saying, You have to give us a plan on how you are going to comply. These undertakings are not goodwill gestures.They are binding. If the company responds by simply reiterating that the layoffs are necessary because of U.S. tariffs, she said the dispute could end up in court. U.S. President Donald Trump levied tariffs on steel products from Canada of up to 50 per cent under its Section 232 duties about a year-and-a-half ago, with other products like aluminum and autos also facing tariffs. While the two sides trade blame, hundreds of workers are caught in the middle.This whole thing is a manufactured crisis by Cleveland-Cliffs to put pressure on our government to go get a trade deal, said Ron Wells, president of United Steelworkers Local 1005. And quite frankly, we don't feel appreciated. We don't appreciate being used as pawns in this game. Wells said the company told workers there would be basically no job losses, no layoffs, for five years.So, we're glad that the government has started the process. However, that's going to be a long, drawn-out process if they take them to court. Our members, they want to get back to work now. While union officials say they welcome the government enforcing the Investment Canada Act, they stress the situation is urgent and worry the legal process could take months, or even years.It's a message reiterated by Hamilton Mayor Andrea Horwath, who is currently running for re-election in the upcoming municipal election. My biggest concern is that the Hamilton workers, our steel workers, are becoming the casualties of this tariff war that Trump has started, she said. I'm going to do everything I can to protect those workers' jobs. And it's an existential moment for our steel industry here in Hamilton. Cleveland-Cliffs did not immediately respond to a request for comment.