Stelco defends layoffs as steel exports to U.S. plunge 58 percent
The company says Canadian exports of cold-rolled and coated steel to the U.S. have fallen sharply since before the trade war.
OTTAWA · Stelco Inc. is defending its plan to lay off up to 500 workers in Ontario, citing a 58 percent collapse in Canadian exports of cold-rolled and coated steel to the United States since before the trade war. In a letter to Industry Minister Mélanie Joly, company president Paul Simon said the industry is being upended by U.S. tariffs, weaker demand and continued foreign steel imports. He said Canadian exports of those products fell by 226,000 tonnes in the second quarter of 2026 compared to the pre-trade-war quarterly average in 2024. Simon argued that existing Canadian trade protections are "woefully inadequate" to create a sustainable market.
"Stelco cannot continue to produce cold-rolled and coated steel products without incurring significant losses that are not sustainable," Simon said in the letter, which was dated Oct. 9. "As such, we will continue with the idling of Hamilton Works." He said imports now account for 45 percent of the market share for cold-rolled and coated steel in Canada, despite federal import restrictions. The company also faces a 10 percent decline in domestic demand due to disruptions in customer industries.
The letter was a response to Joly's demand for an explanation of how Stelco will honour employment commitments made when its U.S. owner, Cleveland-Cliffs, acquired it in 2024. Federal approval of that takeover required the company to maintain staffing levels for five years. Simon, who also serves as Stelco's general counsel, stated the planned idling of the Hamilton finishing operations and related layoffs do not violate those binding commitments. He argued the commitments do not prohibit layoffs or mandate a specific daily employment number.
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Simon told the minister that federal officials were warned of a potential indefinite idling of the Hamilton operations as early as July. He said those officials later suggested discussing a revision to the employment commitments to reflect the shutdown and layoffs. In a statement on social media on Oct. 10, Joly said the employment promises remain in force regardless of market changes. She said all options are being considered as government lawyers review Stelco's response.
The minister had previously stated Stelco chose not to seek support from government job-preservation programs. Simon said the offered financial help, which was tied to retaining workers, would not address the core problem of a lack of orders. He characterized the government's proposal as "a last-ditch effort to cover for an inadequate Canadian trade regime." Stelco said it is taking steps to allow the Hamilton operations to restart with minimal cost and delay, but gave no timeline for a restart. Cleveland-Cliffs CEO Lourenco Goncalves has publicly supported U.S. steel tariffs and advocated for a "Fortress North America" approach with stronger continental import restrictions.
With files from The Canadian Press and BNN Bloomberg