Ottawa asks Cleveland-Cliffs to provide steel job plan or face possible legal action

Industry Minister Mélanie Joly has issued U.S. steelmaker Cleveland-Cliffs CLF-N an ultimatum to comply with its employment guarantees under The Investment Canada Act.

Last week, Cliffs said it intends to lay off up to 500 people in Canada as it shuts down its galvanized steel business in the country, blaming the decision on its inability to sell into the U.S. market owing to 50-per-cent tariffs imposed by the U.S.

In 2024, the Cleveland-based company acquired Stelco Holdings Inc. for $3.4-billion.

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When the federal government approved the acquisition, it imposed a series of legally binding conditions, including maintaining for five years at least the same number of unionized employees in Canada, and the vast majority of non-unionized workers.

On Monday, Ms. Joly sent a letter to Paul Simon, president and general counsel with Stelco reminding the company of its legal obligations and again floated the possibility of Ottawa taking legal action against Cliffs if the company doesn’t comply.

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“Where an investor fails to comply with an undertaking, the Act provides remedies for breaches, including an application to the superior court for orders that may include directing compliance, divestiture, or monetary penalties,” she said.

“I trust that such steps will not be necessary. Accordingly, I ask that Cleveland-Cliffs provide my officials with its plan for complying with all undertakings provided under the Act, within 5 business days of the date of this letter.”

Last week, Prime Minister Mark Carney signalled that legal action against Cliffs might be coming.