Stelco defends layoffs as steel exports to U.S. plunge, imports surge

OTTAWA — Canadian exports of cold-rolled and coated steel to the United States have plunged 58 per cent from pre-trade-war levels as foreign imports continue to undercut Canadian-made steel, Stelco Inc.’s president said in defending plans to lay off up to 500 workers across two Ontario plants.

In a seven-page letter to Industry Minister Mélanie Joly obtained by The Canadian Press, Paul Simon described an industry upended by U.S. tariffs, weakening demand and continued foreign steel imports.

“Stelco cannot continue to produce cold-rolled and coated steel products without incurring significant losses that are not sustainable,” Simon said in the letter. “As such, we will continue with the idling of Hamilton Works.”

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Canadian exports of cold-rolled and coated steel to the United States fell by 226,000 tonnes in the second quarter of 2026 compared with the 2024 quarterly average before the trade war began, Simon said.

Meanwhile, imports accounted for 45 per cent of market share for those products, despite Ottawa’s efforts to protect domestic producers by restricting steel imports, he said.

Simon argued that existing Canadian trade protections are “woefully inadequate” to create a sustainable market that can support two domestic producers of those products.

Disruptions to Canadian industries that rely on cold-rolled and coated steel have led to a 10 per cent decline in domestic demand for those products, he said.

The letter came in response to Joly’s demand that Stelco explain how it will honour employment commitments made by its U.S.-based owner, Cleveland-Cliffs, when it acquired the company in 2024.

Ottawa’s approval of the takeover was contingent on Cleveland-Cliffs maintaining at least the same number of unionized workers and the vast majority of non-unionized employees for five years.

Simon, who is also Stelco’s general counsel, said the company is proceeding with plans to idle its Hamilton finishing operations despite Joly’s warning of possible legal action.

He argued that the layoffs, which are expected to impact both the Hamilton Works and Lake Erie Works plants, do not violate the company’s binding employment commitments.

Simon said Ottawa was warned as early as July that Stelco might indefinitely idle its Hamilton finishing operations, and that federal officials subsequently suggested discussions about revising the company’s employment commitments to reflect the planned shutdown and layoffs.

In a statement posted to X on Oct. 10, Joly said Stelco’s employment commitments remain in force despite changing business strategies or market conditions, adding that all options remain on the table as government lawyers review the company’s response.

Joly had previously said Stelco has “explicitly chosen not to seek support” from government programs designed to preserve jobs and maintain operations.

Simon said Ottawa’s offer of financial help did not address the underlying reasons for Stelco’s decision to idle some operations.

He said the government offered funding to offset maintenance and capital expenses in exchange for retaining workers, but argued that the assistance would not solve the company’s lack of orders for cold-rolled and coated steel.

He characterized the proposal as “a last-ditch effort to cover for an inadequate Canadian trade regime.”

Stelco said it is taking steps to ensure its Hamilton finishing operations can restart with “minimal additional costs and time,” but provided no timetable for doing so.

With files from The Canadian Press and BNN Bloomberg