Steel manufacturer Stelco, based in Hamilton, has confirmed its intention to proceed with a significant number of job cuts, despite facing legal threats from the Canadian government. The company, owned by Cleveland Cliffs of Ohio, stated in a letter acquired by CBC News that it disputes Ottawa’s claims of breaching employment commitments under the Investment Canada Act (ICA).
Paul Simon, the president and general counsel at Stelco, refuted the government’s assertions in a letter to Industry Minister Mélanie Joly, stating that the planned layoffs do not violate any obligations specified in the ICA. Simon highlighted that the commitments do not mandate avoiding layoffs or maintaining specific employment levels throughout the agreed period.
This response follows Joly’s recent ultimatum to Stelco, urging the company to present a strategy to safeguard the potentially affected 500 jobs at its Hamilton facility or face potential legal repercussions. Cleveland Cliffs acquired Stelco in a $3.4 billion transaction, emphasizing the preservation of national interests and workforce importance.
Joly’s correspondence outlined the commitments made during the acquisition, including the retention of a consistent number of unionized and non-unionized staff as at the announcement of the deal. Stelco attributed its current circumstances to external factors beyond its control, specifically highlighting the adverse impact of the 50% tariffs imposed by former U.S. President Donald Trump.
Despite rejecting financial assistance offers from the government, Stelco disclosed its plan to adhere to the ICA’s job commitments in response to Joly’s request. The company reiterated its decision to proceed with the Hamilton layoffs due to challenging market conditions, offering affected employees potential opportunities at its Lake Erie facility.
Stelco emphasized the need for increased government measures to restrict steel imports and support domestic producers like itself. The company expressed willingness to continue discussions with federal authorities to address the ongoing challenges in the steel industry.
CBC News has contacted Joly’s office for a statement regarding Stelco’s stance and will provide updates as necessary.
