Cleveland-Cliffs chief executive Lourenco Goncalves has rejected the suggestion that Ottawa could take over Stelco to protect steel jobs in Ontario, arguing that government ownership would not work. His comments came Wednesday, two days after Industry Minister Mélanie Joly gave the U.S. steelmaker five business days to produce a plan for meeting the employment commitments it made when it bought the Hamilton, Ont.-based company, according to The Globe and Mail.
Cleveland-Cliffs announced last week that it intends to cut as many as 500 workers at Stelco operations in Hamilton and Nanticoke, Ont. The company says it can no longer compete in galvanized steel because of the trade war. Ottawa contends the layoffs breach the legally binding conditions attached to the federal approval of Cliffs' $3.4-billion purchase of Stelco Holdings Inc. in 2024.
Why it matters
The standoff tests whether the federal government can enforce the promises a foreign buyer made under the Investment Canada Act. Those conditions required Cliffs to keep at least the same number of unionized employees in Canada for five years, along with the large majority of non-unionized staff. If Ottawa concludes the company has broken that agreement, the dispute could move toward legal action.
The outcome matters well beyond one company's payroll. Hamilton has long been identified with steelmaking, and the planned cuts land in a sector already strained by tariffs and import competition. The case also sets an example for how Ottawa handles other foreign investors whose business plans change after a takeover is approved.
Ottawa's five-day ultimatum
Joly issued the ultimatum on Monday, telling Cleveland-Cliffs to set out within five business days how it will comply with its employment guarantees or risk legal consequences. On Wednesday she said the company cannot cite the trade war as a reason for cutting jobs it committed to protect — especially, she noted, when the head of its American parent has publicly supported steel tariffs. CBC reported that Joly warned Cleveland-Cliffs not to back Trump tariffs and then attribute Stelco job cuts to an "act of God."
Alison Reilander, a spokesperson for Innovation, Science and Economic Development Canada, said in an email that the government is concentrating on working with the union and the Ontario government to get workers back on the job. Ontario and Ottawa have also funded retraining for Hamilton steelworkers facing the layoffs, according to The Spec.
A nationalization proposal, and a sharp reply
Talk of a state takeover entered the debate through a recent Globe and Mail editorial by Nicolas Lamp, an associate professor in the Faculty of Law at Queen's University. Lamp wrote that if Ottawa treats steel as strategically important and concludes that Stelco workers have been betrayed by Cliffs, it could nationalize the company and install Canadian management. BNN Bloomberg framed government ownership as a possible route to keeping Stelco running.
Goncalves dismissed the idea in an interview Wednesday. He pointed to Venezuela, where president Hugo Chávez nationalized the steel company Siderúrgica del Orinoco, or SIDOR, in 2008 — a takeover widely regarded as an economic failure that sent production into steep decline. Asked whether he would consider an offer from Ottawa to buy Stelco, Goncalves said the only thing that makes sense for his company as a business is for the Canadian government to sign a "Fortress North America" trade deal with the United States.
The galvanized steel dispute
Goncalves says the 50-per-cent tariff U.S. President Donald Trump placed on Canada last year shut the company out of a key market for galvanized steel, and that Ottawa has not done enough to block cheap imports from entering Canada. That explanation drew a public challenge from Jim Ritchie, owner of the steel distribution company Cascadia Metals Ltd., who called it "a joke." Ritchie said coated steel prices in Canada have climbed sharply this year and that conditions for making galvanized steel in the country have rarely been better.
Ritchie described himself as a significant purchaser of galvanized steel from Stelco, and said the company's withdrawal from the product has left Cascadia scrambling to bring in supply from overseas. Goncalves responded by calling Ritchie a "walking eagle" — his phrase for a bird that cannot fly because it is full of excrement. He disputed that Cascadia is a major Stelco customer, saying it does not rank in the top 20 and accounts for less than 1 per cent of business by revenue.
Goncalves also said Ritchie is part of the problem, arguing that Cascadia imports substantial volumes of steel from abroad, which pushes down prices in Canada. Ritchie said he found the "walking eagle" remark amusing but had no interest in trading insults with Goncalves. He acknowledged importing steel from overseas but said he has worked to shift toward Canadian suppliers, and that he was increasing business with Stelco when the company stopped selling to him. Without imports, he said, his business would not survive, because Canadian producers cannot supply the entire Western Canadian market and there is not enough steel in the country.
What to watch
The immediate question is whether Cleveland-Cliffs delivers a plan that satisfies Joly before the five-day deadline expires, and whether Ottawa follows through on its threat of legal action if it does not.
