U.S.-based steel company Cleveland-Cliffs Inc. has affirmed it remains in compliance with its commitments under the Investment Canada Act (ICA) following recent layoffs at its Canadian subsidiary Stelco. The company announced it conducted a thorough internal review of its 34 undertakings after Stelco announced layoffs of up to 500 workers at its Hamilton and Nanticoke, Ontario plants in late September.
Cleveland-Cliffs stated that its current average annual employment figures exceed the required levels for both unionized and salaried workers at Stelco. Specifically, the company expects unionized employment to average at least 1,879, which is 115 above the threshold of 1,766, and salaried employment to average at least 627, surpassing the requirement of 603. In a letter sent to Industry Minister Mélanie Joly, Cleveland-Cliffs confirmed it is in full compliance with its commitments and requested a meeting to explore options to potentially reverse the temporary layoffs affecting 175 workers in Hamilton.
Despite the company’s assertions, the federal government has indicated that by proceeding with the layoffs, Cleveland-Cliffs is breaching its commitment to maintain unionized employment levels for five years. Minister Joly has repeatedly cautioned the company that it risks legal consequences or being compelled to divest Stelco if it fails to meet its obligations. In a recent letter, she also criticized Cleveland-Cliffs CEO Lourenco Goncalves, stating that his public advocacy for U.S. steel tariffs violated the company's undertaking to support policies beneficial to both Canadian and U.S. steel industries.
Cleveland-Cliffs maintains that it is complying with its advocacy commitments while reiterating support for U.S. Section 232 tariffs, casting them as part of a broader “Fortress North America” strategy benefiting both countries’ steel sectors. Goncalves has previously expressed support for the tariffs and the resulting reorientation of Stelco's operations towards the Canadian market.
Critics argue that Cleveland-Cliffs’ actions contradict the assurances given when acquiring Stelco in 2024. At that time, the company emphasized Stelco’s competitive strengths and the mutual benefits of continued exports to the U.S. market. However, since the election of former U.S. President Donald Trump and the introduction of steel tariffs, Goncalves has endorsed these measures, which effectively restrict Stelco from exporting to the United States. This has led to accusations that Cleveland-Cliffs strategically undermined Stelco’s role as a competitive exporter to protect its broader U.S. operations, thereby disadvantaging Canadian workers and the economy.
Goncalves has acknowledged that the company deliberately shifted Stelco away from the American market upon acquisition, viewing Stelco as a disruptive competitor in the U.S. Midwest. He described tariffs not as new developments but as a formalization of Cleveland-Cliffs’ preexisting intention to focus Stelco’s production exclusively on the Canadian market. This policy shift preceded the layoffs but has been cited as a contributing factor.
The dispute highlights contrasting perspectives on Cleveland-Cliffs’ stewardship of Stelco, with government officials and some union representatives viewing recent layoffs as a breach of public commitments, while the company points to compliance with employment targets and broader trade policy stances as justification for its actions. A scheduled meeting between Cleveland-Cliffs and Industry Minister Mélanie Joly is expected to further address these issues.