The American owner of Stelco is firing back at Mark Carney after Ottawa threatened action over plans to idle part of its Hamilton steel operation and lay off workers.
Cleveland-Cliffs CEO Lourenco Goncalves says the company is within its rights to scale back operations after the Canada-U.S. trade war upended the conditions under which it bought Stelco.
“I would not have acquired the Stelco if I knew that Canada and the United States would become what they became: enemies in trade,” Goncalves told CBC News.
Cleveland-Cliffs acquired Stelco in 2024 in a cash-and-stock deal valued at roughly $3.4 billion.
Goncalves said the purchase was predicated on Stelco being able to freely sell Hamilton-made steel into the U.S. market under the Canada-U.S.-Mexico Agreement.
“We had the ability to sell into the United States. That was an underlying condition for me to acquire Stelco,” he said.
That access has since been hammered by Washington’s 50 per cent tariffs on Canadian steel.
On September 28, Stelco announced that it would idle its Hamilton finishing operations in October, resulting in 350 layoffs.
The company blamed U.S. tariffs and worsening market conditions.
Carney responded by threatening Cleveland-Cliffs.
“We will use all powers that we have and pursue them to the fullest extent of the law,” he said.
Carney’s warning centres on binding commitments Cleveland-Cliffs made when Ottawa approved the takeover under the Investment Canada Act.
The five-year undertakings require Cleveland-Cliffs to maintain Stelco’s Hamilton headquarters and unionized workforce, retain most non-unionized employees and make significant Canadian investments.
The company also pledged to maintain Hamilton and Nanticoke operations, invest $60 million and increase Canadian steel production.
Goncalves argues the trade environment has fundamentally changed and says he is acting within his rights, vowing to fight Ottawa in court if necessary.
He said he is operating within the “boundaries of what I can do as a responsible business owner”.
Carney has offered federal support, while Industry Minister Mélanie Joly’s office said Stelco rejected Ottawa’s proposals to maintain operations.
Goncalves said money isn’t the problem.
Market access is.
“There’s no market in Canada for the amount of galvanized steel we produce in Canada,” he said. “We need to export … to the United States.”
The United Steelworkers argues the layoffs violate Cleveland-Cliffs’ commitments and accused Goncalves of blaming tariffs he previously supported.
Stelco says production will shift to Nanticoke without reducing Canadian output, though the union says only about 40 Hamilton workers have been offered positions there.
When Cleveland-Cliffs acquired Stelco in 2024, then-CEO Alan Kestenbaum pledged to prioritize Canadian “national interests” and its workforce.
Less than two years later, Ottawa and Stelco’s American owner are clashing over whether those commitments still apply amid a radically changed trade environment.