Stelco pushes back on Ottawa amid threats of legal action over layoffs

Stelco, an Ontario-based steel manufacturer, has denied allegations of breaching its agreement with the federal government following a threat of legal action over layoffs. The company claims the accusations are "false" and it will "stand ready to protect its interests" as it begins laying off hundreds of workers.

The federal government, through Industry Minister Melanie Joly, had sent a letter to Cleveland-Cliffs, the U.S. company that acquired Stelco in 2024, demanding the company respond within five days. Cleveland-Cliffs stated they had sent their response on Oct. 9, but made it available publicly only recently.

Stelco's letter to Joly cited the impact of unprecedented market conditions, including U.S. tariffs on Canadian steel, which led to a decline in sales to U.S. customers. The company has laid off up to 500 workers due to these market realities. Joly responded on social media, reminding that the government expects Stelco to meet its legally binding commitments to employees, which were agreed upon when Cleveland-Cliffs acquired the company.

Stelco maintains it is in compliance with the undertakings in the agreement, stating it submitted an annual report confirming this in November 2025. The union representing roughly 500 workers facing potential layoffs, however, said they were not consulted and were assured their employment levels would remain the same for five years.