Ottawa Threatens to Make Cleveland-Cliffs Sell Stelco Over 500 Layoffs
Industry Minister Mélanie Joly says Section 40 of the Investment Canada Act allows fines, a compliance order or a forced divestiture if Stelco's US owner proceeds with layoffs in Hamilton. The company's chief executive calls it bullying.
"Under Section 40 of the Investment Canada Act, a few possible outcomes of a court process can lead to financial penalties towards the company, forcing them to abide by the commitment, and also a forced divestiture, so forcing them to sell their Canadian assets." Industry Minister Mélanie Joly, Ottawa, 14 October, after Cleveland-Cliffs rejected her demand to halt up to 500 layoffs at Stelco's Hamilton and Nanticoke plants.
"Bullying and harassment." Cleveland-Cliffs chief executive Lourenco Goncalves to BNN Bloomberg on 15 October, describing the layoffs as "a business decision to concentrate production" after US tariffs of 50 per cent closed the galvanised steel market to Canadian output.
The tariffs that idled the cold mill were imposed in Washington.
From the newsWhen Ottawa approved the C$3.4 billion purchase of Stelco in 2024, it attached undertakings to keep at least the same number of unionised employees for five years. The Act lets a court order compliance, impose penalties of up to $10,000 a day or direct a sale. The NDP wants Ottawa to skip the court and nationalise the plant, citing Britain's takeover of British Steel.
We think a job-count guarantee written into a takeover approval was always a promise the market could break, and that the lesson for the next foreign buyer is that Canada may force a sale when conditions change. The tariffs that idled the cold mill were imposed in Washington. Joly says talks remain open; no court filing has been made as of 16 October.
The Semaform
Industry Minister Mélanie Joly said on 14 October that Ottawa is weighing fines, a compliance order or forced divestiture under the Investment Canada Act after Cleveland-Cliffs refused to halt up to 500 layoffs at Stelco.
Employment guarantees attached to takeover approvals are hostages to the trade cycle, and threatening forced sales will weigh on future foreign investment more than it will save these jobs.
Ottawa and the United Steelworkers say the undertakings are legally binding whatever the market does; the NDP says litigation is too slow and the plant should be nationalised.
Sources
- Investment Canada Act, Section 40, Government of Canada Justice Laws
- The Globe and Mail, Joly warns Stelco owner of forced divestment if Ontario layoffs proceed, 14 October 2026
- CBC News, 'Everything is on the table,' Joly says, as Ottawa weighs legal action over Stelco layoffs, 14 October 2026
- BNN Bloomberg, Cleveland-Cliffs CEO accuses Canada of 'bullying and harassment' over Stelco threats, 15 October 2026
- Global News, Stelco negotiations still on the table, Joly says amid layoffs, 15 October 2026
- CBC News, As U.S. owner rejects demand to halt layoffs, NDP leaders call for nationalization, 13 October 2026
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