Cleveland-Cliffs claims compliance on all 34 Stelco undertakings as Ottawa threatens divestiture

Cleveland-Cliffs says it has met or exceeded all 34 undertakings tied to its 2024 acquisition of Stelco, according to an updated report submitted to Canada's Minister of Industry Mélanie Joly. The claim lands amid an escalating dispute in which up to 500 workers at Stelco's Hamilton Works plant in Ontario face potential job losses.

The Cleveland-based steelmaker sent a letter to Joly last week following a review with its legal team. In it, the company asserted full compliance with every national agreement required under the Investment Canada Act, including target employment commitments, according to its own accounting.

What are the numbers behind the compliance claim?

Stelco expects average annual employment of at least 1,879 full-time workers, which is 113 more than the required 1,766, the company said in a news release. It also expects at least 627 salaried workers for the current reporting period, above the required 603.

"Stelco is in full compliance with all undertakings, and in several important areas we have gone beyond what we committed to do," Cleveland-Cliffs CEO Lourenco Goncalves said in a statement Oct. 26.

The dispute centers on the temporary layoffs and idling of Stelco's cold-rolled and coated finishing operations in Hamilton in late September. Joly posted Oct. 22 on social media platform X that up to 500 workers at the plant risk losing their jobs. She argued that Cleveland-Cliffs has "repeatedly failed" to demonstrate it remains compliant with legally binding commitments tied to the acquisition.

Non-compliance carries severe consequences. Penalties could include a court order "requiring the company to comply with its commitments, or forced divestiture of its Canadian assets," Joly added.

Can the 175 laid-off Hamilton workers return?

Goncalves plans to meet with Joly to discuss a path toward restoring full employment for the 175 workers at Hamilton Works who remain temporarily laid off. A timeline for that meeting has not been disclosed.

The Wall Street Journal reported that Cleveland-Cliffs has ruled out selling Stelco until the business improves production and all laid-off workers return to their jobs — a step the company suggested could come before Christmas. That position follows criticism from the United Steelworkers, who called out Cleveland-Cliffs and its CEO over recent comments framing the Stelco purchase as a defensive strategy to keep it out of the U.S. market.

The layoffs trace back to the trade conflict between the United States and Canada. Cleveland-Cliffs moved to idle Stelco's operations after each country enacted opposing tariffs in early September, with Canada imposing duties of up to 50% on many U.S. goods, including hundreds of steel and aluminum products.

What is driving the dispute over steel trade?

Goncalves, a longtime advocate of the U.S. Section 232 policy (the trade law that authorizes tariffs on steel and aluminum imports for national security reasons), has proposed what he calls a "Fortress North America solution." The idea would lower tariffs between the U.S. and Canada while retaining an external trade wall against other countries, which he argues serves both nations' interests.

On an earnings call Oct. 19, Goncalves blamed Canada's government for damaging the country's domestic market for galvanized steel — a type of steel coated with zinc to prevent rust and corrosion. He also said Canada's trade policies have failed to address the "avalanche of imports" entering the country.

"For galvanized products, the imports of non-automotive galvanized steel that continue to flood the Canadian market remain problematic," he said Oct. 26. "We want to find a solution for Hamilton and its workers as soon as possible and believe common sense trade policy will make this a reality."

Tensions between the two countries remain elevated, but President Donald Trump and Canadian Prime Minister Mark Carney have resumed negotiations toward an amicable trade deal, Reuters reported Nov. 3.

What to watch next

The pivotal moment is the Goncalves-Joly meeting, which could determine whether the 175 temporarily laid-off Hamilton Works employees return before Christmas as the company has signaled. Watch also for Ottawa's formal response to the compliance report — specifically whether Joly accepts the company's employment figures or pursues enforcement under the Investment Canada Act, up to and including forced divestiture of Stelco. The trajectory of U.S.-Canada tariff talks will shape the operating conditions for the idled cold-rolled and coated lines in Hamilton.