Cleveland-Cliffs CEO warns Canada risks investment with threats over Stelco layoffs

HAMILTON — The chief executive of Cleveland-Cliffs Inc. says Canada risks discouraging foreign investment by threatening legal action over job cuts at its Stelco steel unit in Ontario.

Lourenco Goncalves said the government's tactics amount to "bullying and harassment" and compared the situation to Venezuela's nationalization of its steel industry.

"We did not expect, less than two years after acquiring the company, to be treated like a pariah," Goncalves said Thursday in an interview on BNN Bloomberg Television.

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"If that's what Canada will do to attract foreign investment into Canada, I don't think they will be very successful."

What is the government threatening?

Industry Minister Mélanie Joly said on Wednesday the government may seek a court order to force Cleveland-Cliffs to comply with job commitments made when it bought Stelco in 2024.

"Everything is on the table," she said, as the government reviews the company’s response to the threatened enforcement action.

Joly said the government could impose financial penalties or even force the company to divest its Canadian assets.

The government approved the acquisition under the Investment Canada Act, subject to commitments to maintain unionized employment levels and most non-union positions.

Ottawa said the layoffs break those commitments.

Why is Cleveland-Cliffs cutting jobs?

Stelco began issuing layoff notices at its plant in Hamilton after deciding to idle its cold-rolled and coated steel operations.

The move may affect as many as 500 workers, though Goncalves said the number laid off so far is smaller than that.

He called it a "business decision to concentrate production" and said he intends to rehire the workers, calling the cuts "temporary."

Cleveland-Cliffs said the move in Hamilton is the result of an unsustainable market shaped by U.S. tariffs and other trade disruptions.

"We have been bankrolling a losing-money operation for almost two years now," Goncalves said on Thursday.

"We cannot accommodate the Canadian market, the production of Stelco, the production of ArcelorMittal Dofasco and an avalanche of imports coming across the border."

Goncalves said the job cuts were due to U.S. tariffs put on Canada by the Trump administration.

How is the CEO responding to the minister?

Goncalves said his company is prepared to go to court to defend their position and that they had not violated the deal they made with former industry minister Francois-Philippe Champagne.

He contrasted Joly's approach with that of Champagne, who he said "rolled the red carpet for us" when Cleveland-Cliffs was orchestrating their purchase of Stelco.

"Last time something like that happened in the steel business was in Venezuela," he said of the government's threats.

"I don't think Canada is Venezuela."

He later added, "I don't think that Canada is Venezuela, let alone Venezuela under Hugo Chavez," referring to when the former Venezuelan president nationalized the steel industry in 2008.

What does the CEO say about Stelco's performance?

Goncalves said Stelco is having a great year and making money, and that the Canadian market continues to react positively to things the company is doing.

"Stelco is having a great year, we are making money, the Canadian market continues to react positively to things that we are doing," he said.

He reiterated his belief in the workforce and the market, stating, "We are not in Canada to lay off people, we believe in the workforce, we believe in the market, we believe that Canada is a country of laws."

Yadude Books reported in September that Prime Minister Mark Carney said the government would pursue the U.S. steelmaker for allegedly violating job commitments.

The government is reviewing the company's response to its threatened enforcement action.

With files from Financial Post and BNN Bloomberg