Ottawa consults lawyers over Cleveland-Cliffs CEO’s comments on Stelco purchase

Industry Minister Mélanie Joly says Ottawa is consulting its lawyers about remarks by Cleveland-Cliffs’ CEO Lourenco Goncalves, suggesting he bought Stelco to protect his company’s U.S. operations from Canadian competition.

Goncalves says the company is now counting on increased purchases of Canadian-made steel rather than tighter import restrictions to restore jobs at its Ontario operations.

In the meantime, as the company faces a deadline to demonstrate how it will honour job commitments, Joly says the federal government is examining the potential legal implications of his comments, in a CBC interview saying he bought Stelco because the Canadian company was flooding the U.S. market with steel and undercutting prices.

She says his confessions during the televised interview could influence Ottawa’s ongoing enforcement action.

WATCH MORE: Joly calls on Cleveland-Cliffs for concrete plan to restore Stelco jobs

Goncalves also said he intends to sell the company in about a year.

Cleveland-Cliffs announced plans in September to lay off hundreds of workers at Stelco’s Hamilton works, and Lake Erie works, blaming U.S. tariffs, weak demand, and an oversupply of imported steel in Canada.

Victor Fedeli, Ontario’s Minister of Economic Development, Job Creation, says Cleveland-Cliffs keeps changing their story.

“Every day they come up with something different, a different kind of story, you know?,” said Fedeli. “Don’t forget, these are the people — Cleveland-Cliffs — that endorsed the tariffs against Canada for steel. They have been bad actors for us right from the very beginning.”

READ MORE: Stelco owner Cleveland-Cliffs denies breaching takeover terms, requests meeting with Joly

But while the federal government continues to look into legal action, one expert fears we’re maximizing losses, by pursuing legal claims and counter-tariffs.

“Going to lawyers and making more costs, so Cleveland-Cliffs already has additional costs of operating in Canada and shipping back to the U.S., they’re called tariffs,” said Rafael Gomez, the director at the Centre for Industrial Relations and Human Resources. “My job would be, if I was Mélanie Joly or the prime minister, let’s try to get those tariffs reduced. Well you know what? There was a chance to do it, it happened in the summer. What happened? We walked away.”

Goncalves also disputes earlier reports about the scale of layoffs, saying the number was never 500, but closer to 175.

An internal letter Stelco issued in September warned “up to 500 employees” at its Hamilton and Nanticoke operations could be affected by cuts.

WATCH MORE: Carney vows to go after Cleveland-Cliffs following layoffs at Stelco