'I would not have acquired the Stelco if I knew that Canada and the United States would become what they became'
The U.S. owner of Stelco says the Canada–U.S. trade war changed the conditions behind its employment commitments in Hamilton, Ont.
Lourenco Goncalves, chief executive officer of Ohio-based Cleveland-Cliffs Inc., told CBC News that his company has every legal right to idle Stelco's Hamilton Works plant. The Stelco layoffs – announced Sept. 28, 2026 – affect up to 500 workers in Hamilton and Nanticoke, Ont.
Goncalves said the ability to sell freely to American buyers was an "underlying condition" of the terms Cleveland-Cliffs accepted when it bought Stelco in 2024.
"I would not have acquired the Stelco if I knew that Canada and the United States would become what they became – enemies in trade," he said.
He made a similar case to Global News: "There's no market in Canada for the amount of galvanized steel we produce in Canada. We need to export… to the United States."
Ottawa vows legal action
At a Sept. 29, 2026 press conference in Vancouver, Prime Minister Mark Carney said workers had been "betrayed by the company," the National Post reported.
"The company made representations and has legal obligations for employment," he said. "We intend to use all powers that we have and pursue them to the full extent of the law."
Goncalves told Bloomberg he was ready for that fight. "We'll resolve this in court," he said, according to Quartz.
In 2009, Ottawa sued U.S. Steel over broken employment and production promises tied to its 2007 Stelco purchase. The government dropped the case after U.S. Steel agreed to keep both plants running until 2015 and invest at least $50 million more, according to a Dec. 12, 2011 Industry Canada statement.
Employment undertakings tied to trade access
Federal approval of the takeover under the Investment Canada Act depended on binding, five-year undertakings, according to an Oct. 30, 2024 statement from then-Industry Minister François-Philippe Champagne. Cleveland-Cliffs agreed to keep at least as many unionized employees as it had when the deal was announced in July 2024. It also agreed to keep the vast majority of non-unionized employees.
The indefinite wind-down begins Oct. 9, 2026, according to a company memo. Ron Wells, president of United Steelworkers (USW) Local 1005 in Hamilton, estimates 350 union members will lose work.
"Christmas ain't that far away, and we have no idea the duration of these layoffs," Wells told CBC News.
Some affected workers will be offered jobs at Lake Erie Works, but not nearly enough to fill the gap, The Globe and Mail reported.
Research on how financial stress is cutting into Canadian workers' productivity shows what that insecurity can be costly.
Federal money not the answer, CEO says
Sources told Global News that Ottawa offered bridge financing, loans and access to new Canadian markets.
"Its decision to reject these practical proposals and continue with layoffs is extremely disappointing," Gabrielle Landry, a spokesperson for Industry Minister Mélanie Joly, said.
Goncalves told Global News the problem is lost U.S. access during the latest phase of Canada's retaliatory tariffs and the trade war. "Until we reestablish that, there's nothing we can do, nothing," he said.
Ottawa's Aug. 25, 2026 tariff package extended the waiver of the one-week Employment Insurance (EI) waiting period to Oct. 10, 2027. Unions warn, however, that recent tariff relief falls short of real certainty.
