Conservatives call for legal action over Stelco layoffs

Canada’s Industry Minister says Stelco’s American owner, Cleveland-Cliffs, could be forced to sell its Canadian assets, or face financial penalties, if it proceeds with hundreds of layoffs.

Mélanie Joly says the layoffs may break the conditions the company agreed to when it bought the Canadian steelmaker in 2024.

“Financial penalties towards the company, forcing them to abide by the commitments and also, forced divestiture — forcing them to sell their Canadian assets,” said Joly. “Everything is on the table.”

The warning comes as the federal conservatives are calling for legal action, meeting in Burlington Wednesday to address the future of Stelco.

READ MORE: Stelco employee among hundreds facing uncertainty after layoffs

“Hamilton we refer to as ‘Steel Town’. Hamilton is not a place where we get bullied. It’s not a place where we lay down. It’s a place where we fight,” said Ned Kuruc, the MP of Hamilton East–Stoney Creek.

“I’m here today to fight on behalf of the workers of Stelco. Legal action is required. It’s time that we fight for the workers of Stelco in Canada and we cannot let another Stellantis happen.”

The CEO of Cleveland-Cliffs Lourenco Goncalves said in 2024, “there’s nothing to fear — in five years, Stelco will be bigger and it’ll be employing more people.”

In 2024, Stelco was acquired for around $3.4 billion CAD, and at the time, the federal government had approved the acquisition under the Investment Canada Act — contingent on what it called a “significant package of binding, five-year-long undertaking.”

That included items like: continuing to employ at least the same number of employees, honouring all existing collective bargaining agreements, and making significant capital and research and development investments.

WATCH MORE: Federal government weighs legal action over Stelco’s layoffs

Last week, Joly gave Stelco five days to outline how it plans to comply with the undertakings of the act.

According to the Liberal party, it’s not them, but Stelco and its parent company which are not meeting their end of the bargain.

“Local workers in Hamilton are being used as pawns in a broader geopolitical game by Cleveland-Cliffs to try and leverage concessions from the Canadian government in the ongoing trade talks,” said MP for Hamilton West-Ancaster-Dundas John-Paul Danko.

Conservative MPs posed the question, ‘why haven’t the courts been involved already?’

“We also learned from the president of Stelco that apparently government officials were informed about the struggles facing Stelco, the market conditions and the potential layoffs that were coming back in July. So of course that begs the question, when was the minister made aware of this and what decisive action had she planned on taking?” said Michael Guglielmin, senior advisor on steel policy.

Joly says the government is still reviewing its options as it engages in talks with Stelco, and the union representing its workers.

WATCH MORE: NDP leaders urge Ottawa to nationalize Stelco to protect steel jobs