Canada Investigates Stelco Owner Cleveland-Cliffs Over Steel Plant Layoffs

Canada’s Competition Bureau has opened an investigation into the 2024 acquisition of Ontario-based steelmaker Stelco by the American company Cleveland-Cliffs, following the owner's decision to lay off up to 500 Canadian workers. Canadian Industry Minister Melanie Joly requested the probe after a 15-day deadline for the firm to comply with its employment commitments expired on November 6.

Cleveland-Cliffs announced in late September that it would temporarily halt operations at facilities in Hamilton and Nanticoke, Ontario, citing a steep decline in demand. The Ohio-based company attributed the downturn to 50 percent tariffs on steel imports introduced by United States President Donald Trump in June 2025, as well as an influx of cheap foreign steel into the Canadian market. According to figures provided by Stelco, Canadian exports of cold-rolled and coated steel to the United States dropped by 58 percent in the second quarter of 2026 compared to pre-trade war averages.

Canadian officials and trade union representatives have questioned whether the layoffs were dictated solely by market conditions. Industry Minister Joly noted that Cleveland-Cliffs recently reported its strongest quarterly financial performance since acquiring Stelco, and warned that Ottawa could seek to force a sale of the company's Canadian assets if terms of the 2024 takeover agreement were violated. Ron Wells, president of United Steelworkers Local 1005 in Hamilton, stated that the company was using Canadian steelworkers as leverage to influence trade policy, noting that 175 workers at the Hamilton facility had already received notices by early November.

Analysts have also questioned the company’s characterisation of trade pressures in Canada. Colin Mang, an economics professor at McMaster University, noted that nearly 80 percent of Canada's cold-rolled steel imports originate from the United States rather than overseas competitors, while domestic demand has simultaneously been weakened by the impact of American tariffs on the Canadian automotive sector. Union officials also pointed out that Chief Executive Officer Lourenco Goncalves had previously expressed support for American tariffs on Canadian steel in testimony before United States lawmakers.

Cleveland-Cliffs has denied violating its takeover obligations, maintaining that the operational cuts are required to ensure the long-term survival of the Stelco plants. Goncalves indicated that laid-off staff could potentially be recalled before Christmas if domestic customers increase purchases of Stelco products, while acknowledging he may consider selling the Canadian unit within a year. Meanwhile, affected employees in Hamilton have begun accessing employment insurance and job retraining programmes, with union leaders expressing concern over the duration of the legal and operational uncertainty.

Written by Thorben Thiede thorben.thiede@alpineweekly.com