Joly asks Competition Bureau to probe Cleveland-Cliffs’ takeover of Stelco

Canada’s Minister of Industry Mélanie Joly has asked the Competition Bureau to examine if Cleveland-Cliffs’ rationale for acquiring Stelco Inc. was conducted in bad faith.

Joly says she sent a letter to the Competition Commissioner to examine whether the company’s conduct in the Canadian marketplace warrants enforcement action under the Competition Act.

The minister referred to testimony from the company’s chief executive Lourenco Goncalves made at a congressional hearing in January, where he said the company acquired Stelco, in part, to prevent Canadian steel from flooding the U.S. market.

Joly says the CEO made similar claims to CBC News last month, when Goncalves said, “I bought Stelco because I could not afford anymore having Stelco flooding the market here in the United States to the detriment of my own company.”

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The minister says if negotiations and acquisition were conducted in bad faith, that the company needs to face the consequences.

Stelco announced plans on Sept. 28, to lay off up to 500 of its workers at its Hamilton and Nanticoke steel mills, starting on or around Oct. 9.

Goncalves later disputed reports about the scale of the layoffs, saying the number was never 500, but closer to 175.

Since then, Joly had applied pressure on the CEO, warning that the Stelco owner had to protect jobs, or potentially be forced to sell its Canadian assets.

WATCH MORE: Stelco to indefinitely idle Hamilton Works operations, impacting up to 500 employees

Last week, Goncalves said he hopes to recall all workers before Dec. 25, if a plan to boost sales of Canadian-made steel to domestic customers succeeds.

The federal government gave Goncalves until Friday to address alleged violations of binding commitments it made when it purchased the Hamilton-based steelmaker two years ago.

If the company fails to comply with its employment commitments, Ottawa has said it could ask a court to order it to meet its commitments, pay penalties of up to $10,000 a day, or force a sale of Stelco.

With files from The Canadian Press.

READ MORE: Joly, feds give Stelco owner 15 days to address alleged violations or face legal action