Canada's Minister of Industry Melanie Joly gave US based Cleveland-Cliffs Inc. five business days to submit a plan showing how its Canadian subsidiary Stelco Inc. will comply with the undertakings it made when the federal government approved the acquisition under the Investment Canada Act (ICA) in 2024, or face potential legal action.
According to media outlets, in a letter sent on October 5 to Stelco president Paul Simon, Joly said the company's plan to indefinitely idle its cold rolled and coated steel operations at Hamilton Works plant would be inconsistent with those initial commitments. The undertakings require that for five years the company would maintain at least the same number of unionized employees and the vast majority of non-unionized employees in Canada as were employed when the transaction was announced. Joly stated that the commitments remain binding even if business strategy or market conditions have changed.
If Cleveland-Cliffs does not comply, the government may apply to a superior court, which could order the company to meet its obligations, impose monetary penalties or order a sale of the business. On October 7, Joly said Ottawa had not yet received a response from Stelco.
Stelco announced on September 28 that it would indefinitely idle the Hamilton operations and concentrate production at its Lake Erie Works in Nanticoke, Ontario, citing US tariffs. The wind-down begins on October 9 and will affect up to 500 employees, while United Steelworkers (USW) Local 1005 estimates 350 steelworkers will be laid off.
Cleveland-Cliffs acquired Stelco in a C$3.4 billion cash and stock deal that closed in November 2024. In 2009, the Canadian government took Stelco's previous owner, United States Steel Corporation, to court over employment undertakings made under the ICA, and the case was settled in 2011 after the company agreed to a new set of undertakings.
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