Rolls of coiled coated steel are shown at Stelco Hamilton Works steel mill, owned by Cleveland-Cliffs.Peter Power/The Canadian Press
Cleveland-Cliffs Inc. CLF-N chief executive Lourenco Goncalves is dismissing the idea of nationalizing Stelco and firing back at what he calls a “walking eagle” Canadian steel customer.
The U.S. steelmaker said last week it was planning to lay off as many as 500 steel workers at Stelco in Hamilton and Nanticoke, Ont., in large part because it can’t compete any more in galvanized steel as a result of the trade war.
When the federal government approved Cliffs’ $3.4-billion acquisition of Stelco Holdings Inc. in 2024, it imposed a series of legally binding conditions, including maintaining at least the same number of unionized employees in Canada for five years, as well as the vast majority of non-unionized workers.
By announcing hundreds of layoffs in Canada, Ottawa alleges Cliffs is now in violation of that agreement.
On Monday Industry Minister Mélanie Joly issued the Cleveland-based steelmaker an ultimatum to map out a plan within five business days for complying with its employment guarantees under the Investment Canada Act or possibly face legal action.
Ottawa asks Cleveland-Cliffs to provide steel job plan or face possible legal action
But while Ottawa is pushing Cliffs to preserve those jobs in Canada, some have suggested the government could instead take over Stelco and save them.
Nicolas Lamp, an associate professor in the Faculty of Law at Queen’s University, said in a recent opinion piece in The Globe and Mail that if Ottawa decides the steel industry is of strategic importance, and Stelco workers have indeed been “betrayed” by Cliffs, it could instead “nationalize the company and put Canadian management in charge.”
In an interview Wednesday, Mr. Goncalves poured cold water on the idea, pointing to the example of Venezuelan president Hugo Chávez nationalizing steel company Siderúrgica del Orinoco (SIDOR) in 2008. The takeover was widely seen as an economic disaster, with production plummeting in the aftermath.
“Is that what Canada really wants to do?” he said.
When asked if he would entertain an offer from Ottawa to buy Stelco, he replied that “the only thing that makes sense for us as a business” is the Canadian government signing a “Fortress North America” trade deal with the U.S.
The office of Prime Minister Mark Carney did not immediately provide a comment when contacted by The Globe.
Trump expects Canada to cave in trade war as Stelco cites tariffs for layoffs
The Cliffs boss also fired back at a Stelco customer who has doubted his rationale for pulling out of the galvanized steel market in Canada. Mr. Goncalves maintains that the 50-per-cent tariff U.S. President Donald Trump imposed on Canada last year has closed off that key market for the company and the Canadian government isn’t doing enough to keep cheap imports out of the country.
Jim Ritchie, the owner of steel distribution company Cascadia Metals Ltd., called that explanation “a joke.” He said the price of coated steel has rocketed higher this year in Canada and “it’s never been a better time to make galvanized steel in Canada.”
Mr. Ritchie said he is a big buyer of galvanized steel from Stelco and with the company no longer producing the product, it has left Cascadia in a jam, forced to import from overseas markets to fill the void.
In response, Mr. Goncalves called Mr. Ritchie a “walking eagle,” meaning a bird that can’t fly because it is full of excrement.
He challenged the notion that Cascadia is a major customer of Stelco, saying it isn’t even among the top 20 and represents less than 1 per cent of its business by revenue.
Stelco’s exit from galvanized steel leaves big Canadian buyer baffled and in the lurch
Mr. Goncalves also said Mr. Ritchie is “part of the problem” because Cascadia imports a considerable amount of steel from overseas, which drives down the price of the product in Canada.
“Clients like Cascadia are the reason I am shutting down,” he said.
Mr. Ritchie said that while he finds the “walking eagle” comment “pretty funny,” he said he wasn’t prepared to engage in “a war of words” with Mr. Goncalves.
He admits that he imports steel from overseas but says he has been doing his best to pivot to Canadian suppliers.
“We were trying to switch from offshore to domestic and we were trying to give them more and more business. We were really ramping up the business we were giving him when they stopped selling to us,” Mr. Ritchie said.
“If we didn’t import, we wouldn’t have a business. That’s because Canadian steel producers can’t supply the entire Western Canadian market. There isn’t enough steel in Canada.”
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