Hamilton-based steelmaker Stelco says it will proceed with hundreds of layoffs despite the federal government threatening legal action over its job protection commitments.
In a letter to Industry Minister Mélanie Joly, Stelco president and general counsel Paul Simon denied that the planned job cuts violate the company’s agreements under the Investment Canada Act.
Joly gave the company an ultimatum last week, demanding a plan to protect up to 500 jobs at its Hamilton plant or face possible legal action.
Stelco is owned by Ohio-based Cleveland-Cliffs, which bought the company in a $3.4-billion deal. Ottawa says the agreement included promises to maintain employment levels.
United Steelworkers Local 1005 president Ron Wells said the union was not consulted when the commitments were made and was not given a chance to review them.
Prime Minister Mark Carney has said the government will use its legal powers to hold Cleveland-Cliffs accountable.
Stelco blames tariffs and trade pressures
Stelco says U.S. President Donald Trump’s 50 per cent tariffs and ongoing trade tensions have hurt its business. The company also argued that federal offers of financial support did not address the reasons it plans to indefinitely idle its Hamilton finishing lines.
The company disputed Joly’s claim that the government only recently learned about its plans, saying it had regularly discussed its financial concerns with federal officials.
Stelco submitted a plan in response to Joly’s demand but reaffirmed that the layoffs would go ahead. It said affected workers could have opportunities to fill vacant positions at its Lake Erie plant.
The company called on Ottawa to impose tighter restrictions on imported cold-rolled and coated steel and remove import duty relief for products that Canadian steelmakers can supply.
Joly’s office said the government continues to expect Stelco to honour its legally binding commitments. It added that all options remain under review.
