Stelco's U.S. owner says he bought steel maker to keep it out of U.S. market

Summary

In 2024, Cleveland-Cliffs won Ottawa's approval to buy Stelco, the Hamilton steel maker, under the Investment Canada Act. The approval came with 34 binding undertakings, including keeping at least the same number of unionized workers and most salaried staff through 2029. Since then, CEO Lourenco Goncalves backed Trump's 50% steel tariffs, and the company announced up to 500 layoffs at Hamilton Works and Lake Erie Works in Nanticoke.

Minister Melanie Joly's 11-page letter of October 22 alleged six breaches and set a 15-day deadline, warning of court remedies including fines of up to $10,000 a day and a forced sale. Goncalves then told the CBC he bought Stelco to stop it undercutting him in the United States and that he will sell once it has run for a while. Joly said his remarks proved Ottawa's case. Cleveland-Cliffs says it is in full compliance with all 34 undertakings.

The video argues the owner's two accounts of the purchase cannot both be true, and it recalls that U.S. Steel's 2007 promises ended in a 2011 settlement before the plant changed hands again. For Canada, the case tests whether promises made under the Investment Canada Act can be enforced against a foreign owner.

Key points

• Cleveland-Cliffs signed 34 undertakings under the Investment Canada Act when it bought Stelco in 2024, with job floors through 2029.
• The company announced up to 500 layoffs at Hamilton Works and Lake Erie Works in Nanticoke, Ontario.
• Joly's October 22 letter alleged six breaches of binding commitments and set a 15-day deadline.
• Possible court penalties include fines of up to $10,000 per day, loss of voting rights, or a forced sale of Stelco.
• Cliffs says it expects at least 1,879 union employees against a floor of 1,766, and at least 627 salaried staff against 603.
• The current reporting period closes October 31; Ottawa's deadline falls in the first week of November.

Questions answered