Federal figures contradict Cleveland-Cliffs’ stated reason for layoffs; Ottawa’s 15-day ultimatum to back up jobs pledge nears
Federal trade data published Tuesday has undermined a central argument behind the Stelco layoffs now affecting up to 500 workers in Hamilton and Nanticoke, Ont. – and raised harder questions about how companies manage workforce commitments made under foreign investment rules when trade conditions deteriorate.
According to Global Affairs Canada’s steel import monitoring program, 54.1 per cent of Canada’s 625,726 tonnes of galvanized and coated steel sheet imports in the first nine months of 2026 came from the U.S. – not from the overseas markets that Cleveland-Cliffs Inc., the Ohio-based owner of Stelco Holdings Inc. in Hamilton, Ont., has identified as a primary driver of the plant shutdowns.
Colin Mang, assistant professor of economics at McMaster University in Hamilton, told The Canadian Press that the claim that offshore steel is being dumped at below-market prices into Canada does not hold against the latest trade figures, and that import prices for galvanized and coated steel have actually risen in recent months.
Mang did acknowledge that weakening domestic demand and sustained import volumes are placing genuine pressure on Canadian producers who have simultaneously lost export access to U.S. buyers – pressure that is real, even if the offshore dumping argument is not well-supported by the Global Affairs Canada data, according to The Canadian Press.
Justification for layoffs
Cleveland-Cliffs announced on Sept. 28 that it would cut up to 500 workers across its Hamilton and Nanticoke plants, blaming U.S. tariffs for the decision. Cold-rolled and coated operations at Stelco’s Hamilton Works facility were indefinitely idled, with roughly 330 workers at the Hamilton plant and additional employees in the pickling operations at Lake Erie Works in Nanticoke affected, reported CTV News at the time.
In an Oct. 9 letter to Industry Minister Mélanie Joly, Stelco president and general counsel Paul Simon attributed the company’s difficulties in part to the “market-depressing impact of dumped, offshore imports” and U.S. tariffs. Simon acknowledged that Ottawa’s import restrictions – introduced in June 2025 and strengthened in December 2025 – had reduced some overseas volumes, but argued they had done little to protect cold-rolled and coated steel products manufactured at the Hamilton finishing operations, according to The Canadian Press.
Cleveland-Cliffs chief executive Lourenco Goncalves has framed the situation in structural terms, arguing that Canada’s galvanized steel market is too small to support two domestic producers alongside what he has described as “an avalanche of imports.”
Commitment enforcement and the Investment Canada Act
The layoffs have triggered a sharp federal response, centred on the workforce undertakings Cleveland-Cliffs made when Ottawa approved the Stelco acquisition. When Cleveland-Cliffs acquired Stelco for $3.4 billion in 2024, it made a binding promise under the Investment Canada Act (ICA) to preserve Canadian jobs for five years.
In an Oct. 22 letter to Stelco, Joly pointed to federal measures restricting overseas steel imports – including tighter quotas introduced in December 2025 – as evidence of active government support for Canadian steel producers. On Oct. 27, she issued a 15-day ultimatum for Cleveland-Cliffs to reverse the layoff notices or face legal action, with the possibility of forced asset divestiture on the table.
For HR executives and people leaders, the dispute illustrates the legal exposure that companies face when foreign acquisition undertakings conflict with changing workforce realities and how those commitments may be enforced regardless of external market conditions.
Workforce consequences
The dispute carries concrete lessons for HR professionals managing trade-exposed workforces across Canada.
The union representing Stelco’s Hamilton workers – United Steelworkers Local 1005 – is treating the cuts as temporary layoffs under the collective agreement, while the company is describing them as indefinite. That distinction is more than semantic: it carries material consequences for notice obligations, recall rights, and the employer’s longer-term workforce strategy. HR leaders in industries navigating collective agreement obligations during trade-related disruptions should review the language in their own agreements carefully before characterizing any cuts as permanent.
Cleveland-Cliffs has indicated it plans to offer Hamilton employees positions at Lake Erie Works in Nanticoke. Whether that redeployment satisfies the ICA commitments will likely be determined by federal regulators – and potentially the courts.
The Stelco situation does not stand alone. It follows layoff announcements at Algoma Steel in Sault Ste. Marie, Ont., where more than 1,000 cuts were disclosed in December 2025 – a sign that trade-related workforce disruption in Canada’s steel sector is systemic.
For people leaders across manufacturing and trade-sensitive industries, the federal government’s willingness to invoke legal mechanisms – including forced divestiture – against a major foreign employer signals that Ottawa intends to hold foreign investors accountable for domestic employment outcomes. HR executives responsible for strategic workforce planning and employment law compliance in volatile trade environments should be pressure-testing their contingency plans now.
The 15-day deadline Joly issued sets a hard clock. The outcome will shape how employers – foreign and domestic alike – understand the durability of job commitments made under Canada’s foreign investment framework.
