TORONTO — The first Stelco layoffs have taken effect in Hamilton, and the American owner of the plant says it will fight Ottawa in court rather than reverse them. Cleveland-Cliffs must give Industry Minister Mélanie Joly a plan Monday for meeting the job commitments it made when it bought Stelco, or face a court application.United Steelworkers Local 1005 president Ron Wells has said notices began going out last week and the first separations took effect Sunday. He has put the Hamilton total at roughly 330 to 350 workers over three weeks, with another 40 to 50 expected at Lake Erie Works in Nanticoke starting later this month. The company has said up to 500 jobs could be affected across both sites as it idles cold-rolled and coated operations. Wells has said only about 40 to 45 openings exist at Nanticoke for the Hamilton workers. He has also drawn a distinction that shapes recall rights and termination pay: the company calls the cuts indefinite, while the union treats them as temporary under the collective agreement.“I hope, basically, the federal government makes an example out of them,” he told CBC News.Stelco president and general counsel Paul Simon wrote Joly on Oct. 9 that her claim the cuts breach the 2024 Investment Canada Act undertakings is false. The letter said the situation is the result of U.S. tariffs and market conditions beyond its control. Cleveland-Cliffs CEO Lourenco Goncalves told CBC on Sunday that he is prepared to defend the cuts in court. “There is no provision in the contract that I have to keep employment at a certain level every single day of the five years,” he said. “If that was an imposition of the Canadian government, I would not have accepted.” He said the layoffs are temporary until Canada and the U.S. reach a trade deal, and that the jobs will be restored. He added that he would not have bought Stelco if he had known Canada and the United States would become “enemies in trade,” and that he is in favour of tariffs against every country that dumps steel into the United States. Asked about a sale, he said “for a good offer, yes,” while still calling the company a good citizen in Canada..Joly’s Oct. 5 letter gave the company five business days to show how it will meet every undertaking, or face a superior-court application that could order compliance, divestiture or penalties. She wrote that the promises do not lapse because business strategy or market conditions have changed, and she rejected any force-majeure defence given Goncalves’s public support for the American tariffs. Prime Minister Mark Carney has said Ottawa will use all powers it has. Joly’s office has said its lawyers are reviewing the Oct. 9 letter and that all options remain open. No court application has been filed.Ohio-based Cleveland-Cliffs bought Stelco in a $3.4-billion deal that closed in November 2024. Ottawa approved it on the condition the buyer keep, for five years, at least the same number of unionized employees in Canada and the vast majority of non-union workers as were on the payroll when the deal was announced. The full text of the undertakings has not been published. The company has said overall tonnage will not fall, only the product mix, as more production shifts to hot-rolled coil at Lake Erie Works.Wells has said the union was not shown the agreement, and that workers were assured bargaining-unit employment would stay the same for five years. He has called the situation a manufactured crisis.
