Carney vows to use all powers against U.S. steelmaker over Stelco layoffs
The prime minister says the U.S. owner of the Hamilton steel plant has betrayed workers and violated job commitments.
VANCOUVER — Prime Minister Mark Carney says Canada will use all its powers against the U.S. owner of an Ontario steel plant that announced hundreds of layoffs, directly linking the cuts to American tariffs.
Carney said the government intends to pursue Cleveland-Cliffs to the fullest extent of the law, alleging the company has violated binding employment obligations tied to its $3.4 billion takeover of Hamilton-based Stelco last year.
"Our thoughts are with the workers and the families who have been betrayed by the company," Carney said at a news conference in Vancouver on Tuesday.
READ MORE: Canada threatens legal action against Cleveland-Cliffs over Stelco layoffs
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"The company made representations, and has legal obligations for employment. We intend to use all powers that we have, and pursue them to the fullest extent of the law."
Stelco, owned by Ohio-based Cleveland-Cliffs, plans to indefinitely idle cold-rolled and coated operations at its Hamilton plant, affecting up to 500 jobs.
The company said the move is linked to U.S. President Donald Trump's trade war, which saw the administration impose 50 per cent tariffs on foreign steel under Section 232 of the Trade Expansion Act last year.
Carney singled out Cleveland-Cliffs CEO Lourenco Goncalves, who has publicly backed Trump's steel tariffs, calling them "a necessary step" to protect U.S. steelmakers.
In a memo to employees, Stelco vice-president of sales Frederic Fafard called the situation "an unfortunate but necessary action to help ensure the survival of Stelco in what has become a challenging and unsustainable market."
The company said U.S. tariffs had "significantly shrunk the market" for its cold-rolled and galvanised products, with demand in its traditional markets falling nearly 25 per cent in the second quarter compared with the 2024 quarterly average, including a 10 per cent decline in Canada.
The prime minister said there is "money on the table from the federal government" to help companies like Stelco blunt the impact of the trade war, though he did not disclose the amount or terms.
Industry Minister Mélanie Joly had been in touch with Goncalves about financial support, a Cleveland-Cliffs spokesperson confirmed.
The Canadian government approved Cleveland-Cliffs' takeover of Stelco in October 2024 on the condition it meet legally binding five-year employment commitments, including maintaining at least the same number of unionized workers and the vast majority of non-union employees.
In a news release announcing the deal that closed in November 2024, Stelco's then-CEO Alan Kestenbaum stated the transaction "keeps national interests at the forefront and recognizes the importance of the workforce."
Pat Persico, Cleveland-Cliffs' senior director of corporate communications, said while Stelco is idling some Hamilton operations, the company expects "a significant number of workers" will be absorbed by its Lake Erie Works in Nanticoke, Ont.
Cleveland-Cliffs did not immediately respond to a request for comment on Carney's remarks about potential legal action.
The layoffs were announced a day after Trump, at a White House event on a new $15 billion steel plant in Iowa, said his tariffs had reduced foreign steel imports and drawn investment into the United States.
Yadude Books reported last week that Canada was threatening legal action against Cleveland-Cliffs over the layoffs.
With files from CBC News and India Today