Stelco layoffs took effect on Sunday 11 October 2026 at the steelmaker’s Hamilton Works plant in Ontario, Canada. Its American owner, Cleveland-Cliffs, must hand Ottawa a plan for honouring its 2024 takeover commitments by Tuesday 13 October. The company says those commitments never required it to avoid job cuts.
The dispute is a Canadian federal matter and turns on the Investment Canada Act, the law under which Ottawa approved the takeover. No court has ruled on whether Cleveland-Cliffs has broken anything, and the government has not filed a claim.
Who Is Losing a Job, and When
Stelco announced on 28 September 2026 that it would lay off up to 500 workers across two Ontario sites, blaming an inability to compete in galvanized steel during the trade war between Canada and the United States. Galvanized steel is sheet steel coated with zinc to resist rust, used heavily in cars and construction.
The schedule, as reported by BNN Bloomberg and The Globe and Mail:
- Wednesday 7 October 2026: Individual layoff notices began going out at Hamilton Works, with about 90 workers expected to receive one that week.
- Sunday 11 October 2026: The first layoffs took effect.
- The following three weeks: Roughly 330 Hamilton workers are expected to be affected as the cold-rolled and galvanized operations are idled.
- From Saturday 24 October 2026: Between 40 and 50 workers at Lake Erie Works in Nanticoke could be laid off as pickling line operations are cut back. Pickling is the acid bath that strips scale from hot-rolled steel before further processing.
Stelco has told laid-off Hamilton staff they may apply for openings at Lake Erie Works. United Steelworkers Local 1005 says only 46 positions are available there; that figure comes from the union, not from the company or the government.
Union officials have taken different lines on the same events. Ron Wells, president of Local 1005 in Hamilton, told BNN Bloomberg that workers “feel we’re being used as pawns” and called the situation “a manufactured crisis” and “political theatre”. Speaking to The Globe and Mail after Stelco’s reply to Ottawa, he said he was “severely disappointed” but not surprised, adding: “It’s not shocking that they are trying to weasel out of the agreement.” He wants Ottawa to sue and said he expects the government would win. John McElroy, president of Local 8782 at Lake Erie Works, said members there are “quite worried” because few comparably paid jobs exist in the area.
Why the Layoff Count Is Reported Three Ways
Three different numbers are circulating, and they are not contradictions so much as different things being counted.
- Up to 500: the ceiling Stelco gave in its 28 September announcement, covering both Ontario sites.
- About 330: the number expected to be affected at Hamilton Works over the three weeks from 11 October.
- 350, temporarily: the figure Cleveland-Cliffs chief executive Lourenco Goncalves used, describing the action as “a temporary layoff” and saying he is “temporarily laying off 350”.
Neither Stelco nor Cleveland-Cliffs has published a reconciliation of the three. Nothing in the public record sets a date by which temporary layoffs would become permanent, and Goncalves has tied any recall to a trade outcome rather than a calendar: he said “we will bring back these people” once a trade deal is reached and galvanized production and sales resume. He has long argued for what he calls “Fortress North America”, shielding steelmakers on both sides of the border from foreign imports while restoring American market access for Canadian galvanized steel. He also said he “did not betray anyone”.
What the 2024 Undertakings Require
Cleveland-Cliffs completed its purchase of Stelco Holdings on 1 November 2024, a deal announced in July 2024 at an enterprise value of about 3.4 billion Canadian dollars, roughly 2.5 billion United States dollars. Ottawa approved it under the Investment Canada Act, which lets the federal government clear a foreign takeover only if it is likely to be of net benefit to Canada, and routinely attaches written undertakings — legally binding promises to the Crown — as the price of approval.
According to The Globe and Mail’s reporting on Industry Minister Mélanie Joly’s letter, the Stelco undertakings require Cleveland-Cliffs to maintain, for five years, at least the same number of unionised employees in Canada and to keep the vast majority of its non-unionised workers. That five-year clock runs to late 2029. The undertakings have not been published in full, so their precise wording — including any conditions, carve-outs or definitions of “maintain” — is not on the public record, which is the heart of the disagreement.
The Two Letters: What Each Side Argues
The dispute is being conducted in correspondence. Two letters, five days apart, set out the positions.
| Ottawa | Stelco and Cleveland-Cliffs | |
|---|---|---|
| Who and when | Industry Minister Mélanie Joly, letter dated Monday 5 October 2026, addressed to Stelco president and general counsel Paul Simon | Paul Simon, reply sent Friday 9 October 2026 |
| Core claim | The layoffs put Cleveland-Cliffs in breach of its Investment Canada Act undertakings | “Your representation that Stelco’s planned layoffs cause it to breach its undertakings is false” |
| On the promises | The commitments “do not cease to apply because of changing business strategy or market conditions”, per Mathis Denis, Joly’s director of communications | The undertakings “do not stipulate a commitment to avoid layoffs” |
| On circumstances | Joly wrote that “the Act provides remedies for breaches, including an application to the superior court”, adding: “I trust that such steps will not be necessary” | Cites the government’s own Investment Canada Act guidance that changed circumstances may justify non-enforcement or renegotiation of undertakings |
| What it wants | A plan for complying with all undertakings, within five business days | Tighter Canadian restrictions on imports of cold-rolled and coated steel |
Stelco also rejected any suggestion that Ottawa was taken by surprise, pointing to communications dating back to July 2026. Its letter pointed to the 50 per cent United States tariff on Canadian steel exports, which The Globe and Mail reported was imposed last year, as a change beyond the company’s control; Canada has its own counter-tariffs on American goods running alongside it. Joly’s office said its legal team was reviewing Stelco’s letter and that “all options are on the table”.
Cleveland-Cliffs says it is preparing two submissions by Tuesday 13 October: a response to Joly’s demand, and a more detailed document containing commercially sensitive information, which it says is protected from disclosure under the Investment Canada Act.
What a Court Could Order Under the Investment Canada Act
This is the part largely missing from the coverage, and it sets the real limits on what Ottawa can do. The Act gives the minister a two-step route, and the second step is a court application, not a ministerial decision.
Under section 39(1)(e), where a non-Canadian “has failed to comply with a written undertaking given to Her Majesty in right of Canada relating to an investment”, the minister may send a demand requiring the recipient “to justify any non-compliance therewith”. Section 39(3) requires that demand to state what proceedings may follow if it is not met.
If the demand is not complied with, an application may be made on the minister’s behalf to a superior court. The court must first find both that the minister was justified in sending the demand and that the recipient failed to comply with it. Only then may it make orders, and section 40(2) of the Act lists what those can be:
- Divestiture, under 40(2)(a): directing the non-Canadian to divest control of the Canadian business, or its investment in the entity, on terms the court considers just and reasonable.
- Injunction, under 40(2)(b): restraining conduct that could undermine a later divestiture order.
- Compliance, under 40(2)(c): requiring compliance with the written undertaking itself.
- Monetary penalty, under 40(2)(d): a penalty “not exceeding ten thousand dollars for each day” of contravention — that is, up to 10,000 Canadian dollars daily, about 7,000 United States dollars at mid-October 2026 exchange rates.
- Voting rights, under 40(2)(e): revoking or suspending rights attached to voting interests acquired.
- Disposition, under 40(2)(f): requiring disposal of voting interests or of assets used in the Canadian business.
- Information, under 40(2)(g): requiring the provision of information the minister or director has requested.
Two further points matter for how much pressure this represents. Penalties under 40(2)(d) are debts due to the Crown and recoverable in a superior court, and failing to obey an order made under section 40 may be punished as contempt of that court. Ordinary appeal rights apply to anything decided under the section. The 10,000-dollar daily ceiling is modest set against a business of Stelco’s size, which is why the divestiture power in 40(2)(a) is the provision commentators have focused on.
The Last Time This Happened: U.S. Steel, 2007 to 2011
Stelco has been through this before, with a different American owner. United States Steel Corporation bought Stelco in 2007 and gave Investment Canada Act commitments covering jobs and production levels. After the 2008 financial crisis it laid off Canadian workers, and the federal government sued, alleging the company had reneged. The case ended in a settlement in 2011 under which U.S. Steel accepted new commitments on production levels and Canadian investment.
The precedent cuts both ways. It shows Ottawa will litigate over undertakings, and it shows how such cases have tended to end — in renegotiated promises years later, rather than a forced sale or a reversal of the layoffs that triggered them.
What Is Not Yet Decided
As of 12 October 2026, in Canada: Cleveland-Cliffs’ formal response to Joly is due on 13 October and has not been filed; Ottawa has not commenced any proceeding, and its lawyers were still reviewing Stelco’s 9 October letter; no court has considered whether the undertakings bar layoffs, and the undertakings’ full text remains unpublished; and no date has been set on which the layoffs Goncalves calls temporary would either end or become permanent. Prime Minister Mark Carney signalled last week that legal action might follow, without committing to it.
Stelco Layoffs: Questions Readers Are Asking
How Many Workers Are Affected by the Stelco Layoffs?
Stelco said on 28 September 2026 that up to 500 jobs could go across Hamilton Works and Lake Erie Works in Ontario. About 330 Hamilton workers are expected to be affected in the three weeks from 11 October 2026, and 40 to 50 at Lake Erie Works from about 24 October. Cleveland-Cliffs’ chief executive has described the action as temporarily laying off 350.
Are the Stelco Layoffs Permanent?
Cleveland-Cliffs calls them temporary and has tied any recall to a Canada–United States trade outcome rather than a date. No deadline has been published after which they would become permanent.
What Did Cleveland-Cliffs Promise Ottawa in 2024?
As a condition of approval under the Investment Canada Act, it undertook to maintain for five years at least the same number of unionised employees in Canada and to keep the vast majority of non-unionised workers, according to The Globe and Mail’s account of Minister Joly’s letter. The full text of the undertakings has not been published.
Can Ottawa Force Cleveland-Cliffs to Sell Stelco?
Only a superior court can order that, and only after finding that the minister’s demand was justified and that the company failed to comply with it. Section 40(2)(a) of the Investment Canada Act allows a divestiture order; section 40(2)(d) allows a penalty of up to 10,000 Canadian dollars for each day of contravention. Ottawa has not started proceedings.
What Happens Next in the Stelco Dispute?
Cleveland-Cliffs said it would respond to Joly’s demand by Tuesday 13 October 2026. Joly’s office said its legal team was reviewing Stelco’s earlier letter and that all options were on the table.
