Stelco recalls 175 laid-off workers after federal pressure

HAMILTON · Stelco is recalling 175 steelworkers it laid off earlier this fall, with plans to restart finishing operations at its Hamilton plant on Dec. 1. The company announced the recall on Friday, saying it had secured enough customer commitments to resume work. All affected employees will be compensated retroactively for the wages they missed while off the job. The move follows weeks of pressure from the federal government, which had threatened legal action and a forced sale of the plant. The recall appears to end a standoff that began in late September when Cleveland-Cliffs, the American parent company of Stelco, announced plans to lay off as many as 500 workers. The company cited U.S. tariffs, weak demand for Canadian steel and competition from imported steel products. Industry Minister Mélanie Joly said the layoffs violated binding commitments Cleveland-Cliffs made to maintain employment levels when it bought Stelco in 2024.

Ron Wells, president of United Steelworkers Local 1005, said the recall is a relief for workers. "We are happy the government held them accountable, enforced the Investment Canada Act, got our members back in a relatively short period of time, and made them whole," Wells said. He credited pressure from laid-off members, the union and the government for forcing the company's hand. "Our laid-off members, they deserve credit because they pressured the union, the union pressured the government and the government enforced the Canada Investment Act. So good for Canada," he said.

In a statement, Stelco said its customers have committed to support the restart of its Hamilton finishing operations. The company also criticized the federal government, saying it had not done enough to address "the continued flood of offshore imports of galvanized products that have eroded our domestic market." Stelco president Paul Simon thanked customers and workers. "I would like to thank our valued customers for the faith they have placed in us, and our workers for the patience and resilience they have continued to demonstrate during this challenging period," Simon said.

READ MORE: Cleveland-Cliffs CEO aims to recall Stelco workers before Christmas

READ MORE: Stelco lays off 85 more workers as steel industry jobs shrink

Joly had warned Cleveland-Cliffs in a series of letters that it risked being sued, facing financial penalties or being forced to divest Stelco if it did not recall the workers. Just before Stelco's announcement on Friday, Joly said she would seek a court order to force a sale of the Hamilton plant if she did not hear from the company by the end of the day. Following the recall news, Joly told CBC's Power & Politics that the workers being called back is a "huge win." She said the government would not pursue legal action once the company provides official notice. "I want to make sure that I see the CEO of Cleveland-Cliffs's signature on a paper," Joly said. "Once that's the case, then we will be able to move on and make sure that Stelco is well anchored."

The federal government was also consulting its lawyers about remarks made by Cleveland-Cliffs CEO Lourenco Goncalves. In an interview last month, Goncalves said he bought Stelco to stop it from undercutting his U.S. business. "I bought Stelco because I could not afford anymore having Stelco flooding the market here in the United States to the detriment of my own company," Goncalves told CBC. Joly called those comments a "shocking admission" and asked the Competition Bureau to investigate whether the company had violated the Competition Act. Yadude Books reported in October that Goncalves had said he aimed to recall the workers before Christmas if Canadian customer demand increased.

The company said restarting operations will take several weeks. Wells noted that while the recall eases uncertainty heading into the holidays, some workers might not receive their next regular paycheque until mid-December. "It's still going to be a strain on them," he said. Cleveland-Cliffs has denied violating its commitments under the Investment Canada Act.

With files from The Canadian Press, CBC News and The Globe and Mail