Joly Asks Competition Bureau to Investigate U.S. Stelco Owner as 500 Hamilton Workers Face Layoffs

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A dispute over hundreds of steelmaking jobs in Hamilton has escalated into a federal competition controversy, raising questions about whether one of Canada’s major steel producers was purchased partly to weaken competition south of the border.

On November 6, 2026, Industry Minister Mélanie Joly asked Canada’s Competition Bureau to examine the conduct of Cleveland-Cliffs, the American company that acquired Stelco in 2024. Her request follows controversial remarks from the company’s chief executive and weeks of disagreement over employment commitments made during the takeover.

Stelco has warned that up to 500 positions could be affected across its Ontario operations, although the latest confirmed figures show 175 workers have been laid off in Hamilton. Beyond those immediate job losses, the dispute has become a test of Canada’s ability to protect domestic manufacturing, enforce foreign investment agreements, and preserve competition in an industry already struggling with American tariffs.

Ottawa Questions Whether the Stelco Takeover Undermined Competition

Joly’s November 6 letter to Competition Commissioner Jeanne Pratt marked a significant escalation in Ottawa’s dispute with Cleveland-Cliffs. Rather than focusing exclusively on layoffs and the company’s employment obligations, the minister asked regulators to consider whether the American steelmaker’s conduct in Canada warrants enforcement action under the Competition Act. Her concerns centre on statements suggesting Stelco may have been acquired partly to limit competition with Cleveland-Cliffs’ existing American operations. The issue reaches beyond the company’s current staffing decisions and raises questions about how Stelco has been managed since the acquisition.

Joly also raised concerns about the potential effect of idling Hamilton’s finishing operations on Canadian steel prices. Her argument is that restricting the availability of certain domestically produced steel products could increase costs for Canadian manufacturers and ultimately consumers. Those concerns remain allegations rather than established violations. The Competition Bureau reviewed the original transaction in 2024 and issued a no-action letter, but the minister believes subsequent statements and business decisions deserve additional scrutiny. Her request does not, by itself, establish wrongdoing or confirm that a formal investigation has begun.

The 500-Worker Warning Is Not the Same as 500 Confirmed Layoffs

The employment dispute began on September 28, when Stelco announced plans to indefinitely idle cold-rolled and coated steel finishing operations at Hamilton Works. The company warned that as many as 500 employees could be affected across its Hamilton and Lake Erie facilities. United Steelworkers representatives initially estimated that approximately 300 to 350 positions in Hamilton were at risk, with additional reductions possible in Nanticoke. The announcement created considerable anxiety among workers because the company did not provide a firm timeline for restoring the affected operations.

The confirmed number of layoffs is important. As of November 6, Cleveland-Cliffs and union representatives had reported 175 workers actually laid off, all in Hamilton. That is substantially below the initial maximum of 500, although the wider restructuring has not been resolved. Stelco says its plan involves concentrating steel production at Lake Erie Works and changing its product mix, with greater emphasis on hot-rolled steel. For employees affected by the shutdown, however, the distinction between planned and completed layoffs offers limited comfort without a reliable timetable for returning to work.

Cleveland-Cliffs CEO’s Own Words Raised Serious Questions

One of the most consequential developments came from Cleveland-Cliffs chief executive Lourenco Goncalves himself. In written testimony prepared for the U.S. Congressional Steel Caucus on January 14, 2026, Goncalves stated that, after purchasing Stelco in 2024, Cleveland-Cliffs had blocked the Canadian company from selling steel into the American market. His testimony also strongly supported maintaining U.S. steel tariffs, including those affecting Canada and Mexico. These remarks became particularly significant because Stelco had historically depended on access to American customers.

The controversy intensified during an October 27 interview with CBC’s Power & Politics, when Goncalves explained that Stelco had been competing aggressively with Cleveland-Cliffs in the United States. He said he purchased the Canadian company because its exports were undercutting his American business. The comments prompted Joly to seek legal advice about the company’s original intentions. However, an acquisition designed to reduce competitive pressure is not automatically proof of a Canadian competition-law violation. Regulators would need to examine the relevant market, the company’s conduct and any resulting harm to competition before determining whether enforcement is justified.

The 2024 Takeover Came With Five Years of Binding Commitments

When Cleveland-Cliffs acquired Stelco in November 2024, the Canadian government approved the transaction only after securing legally binding commitments intended to protect jobs and maintain the company’s domestic operations. Then-industry minister François-Philippe Champagne announced the approval on October 30, 2024, after a review under the Investment Canada Act. The agreement required Cleveland-Cliffs to maintain Stelco’s headquarters in Hamilton, preserve its historic brand and continue employing at least the same number of unionized workers and the vast majority of non-union employees as were employed when the acquisition was announced.

The commitments also covered collective bargaining agreements, employee benefits, pensions, capital spending, research and development, and environmental performance. These undertakings were designed to ensure that the American investment delivered lasting benefits to Canada rather than simply transferring ownership. The central disagreement now concerns how those obligations should be interpreted and measured. Ottawa argues that the current layoffs and the company’s trade-policy positions undermine important promises made during the takeover. Cleveland-Cliffs maintains that the agreements establish measurable employment requirements rather than prohibiting every individual layoff. That distinction has become central to the legal dispute.

Cleveland-Cliffs Insists It Has Honoured All 34 Promises

Cleveland-Cliffs has firmly rejected accusations that Stelco violated its acquisition commitments. In an October 26 statement, the company said it had reviewed all 34 legally binding undertakings with its lawyers and determined that Stelco was fully compliant. It reported expected average employment of at least 1,879 unionized full-time-equivalent workers for the current reporting period, compared with a required minimum of 1,766. The company also projected at least 627 salaried full-time equivalents against a minimum of 603. These figures are central to its argument that temporary layoffs do not automatically establish a breach.

Joly remains unconvinced. In a subsequent letter, she described the company’s compliance report as insufficient and demanded underlying documents and evidence supporting its calculations. Her position is that the company’s assertions cannot replace demonstrated compliance with the original agreement. The disagreement illustrates why the distinction between average employment levels, actual staffing and operational decisions matters. A company may report employment averages above a contractual threshold while individual workers remain laid off. Whether that is consistent with every applicable undertaking requires an examination of the agreement’s terms and supporting evidence, not simply the competing public statements.

Trump’s 50% Steel Tariffs Have Created a Genuine Industry Crisis

Cleveland-Cliffs’ explanation for Stelco’s restructuring cannot be separated from the wider trade conflict. The United States increased its Section 232 tariffs on most imported steel to 50% in June 2025, sharply reducing the competitiveness of Canadian exports. The Bank of Canada reported in April 2026 that Canadian steel exports had fallen by approximately half following the tariff increases. For steelmakers accustomed to selling much of their output to American customers, the loss of market access created difficult decisions about production, costs and employment.

Stelco says those tariffs, combined with continuing imports into Canada and insufficient demand for certain finished-steel products, made its Hamilton operations unsustainable. Cleveland-Cliffs has argued that Canada’s domestic market needs stronger protection against imported steel. However, the company’s leadership has also publicly supported the American tariff policy that helped create the disruption. This is a central point in Ottawa’s criticism. Government officials question whether a company can advocate trade restrictions affecting its Canadian operations and subsequently rely on those restrictions to justify eliminating Canadian jobs. The industry’s financial pressures are real, but they do not independently establish whether Stelco has met its specific legal obligations.

Canadian Manufacturers Could Face Consequences Beyond the Layoffs

The Stelco controversy has consequences beyond the company’s workforce because steel is an essential input for Canada’s manufacturing and construction sectors. Cold-rolled steel is widely used in manufactured products that require precise dimensions and smooth surfaces, while galvanized steel provides corrosion resistance for applications ranging from construction materials to industrial components. When domestic processing capacity is removed from service, buyers may have to reconsider suppliers, delivery schedules and procurement costs. The impact depends on the availability of comparable products, including imports, and cannot be determined from plant closures alone.

The Canadian Institute of Steel Construction publicly supported Joly’s November 6 request, expressing concern about fair competition in the domestic steel market. Federal figures published in the Canada Gazette show that Canada’s steel industry supported more than 23,000 jobs and contributed approximately $3 billion to GDP in 2024. The sector’s importance extends into transportation, housing, infrastructure and other industries dependent on reliable material supplies. Still, the claim that Stelco’s decisions have increased Canadian steel prices requires supporting market evidence. Establishing whether the company restricted competition, rather than responding to weak demand, will be a critical distinction for regulators.

Hamilton Steelworkers Are Caught Between Corporate Decisions and Political Pressure

For Stelco employees, the debate over competition law and international trade translates into immediate financial uncertainty. Workers who spent years developing specialized skills in steel processing now face questions about when their regular shifts might return. Ron Wells, president of United Steelworkers Local 1005, has been particularly critical of Cleveland-Cliffs’ handling of the layoffs. The union has accused the American owner of using Canadian workers as leverage in a broader dispute over trade policy. Meanwhile, the company maintains that its decisions are necessary to address difficult market conditions.

Potential transfers to Stelco’s Lake Erie Works have offered another source of disagreement. Cleveland-Cliffs initially suggested that a significant number of Hamilton employees could move to the Nanticoke facility, but union representatives told Global News that only 40 positions had been offered to affected workers. Even when transfers are available, moving to another facility can create complications involving commuting, family schedules and seniority. The uncertainty also affects the wider community, where steelmaking wages support local businesses and household spending. For workers facing an indefinite layoff, a credible recall plan matters considerably more than competing legal arguments.

Ottawa Has Two Different Legal Paths to Pursue

The Competition Bureau’s potential involvement introduces a separate legal question from the dispute over employment commitments. Under the Competition Act, regulators can examine practices that may substantially reduce competition, including certain forms of exclusionary conduct or abuse of market power. The bureau would need to determine whether Cleveland-Cliffs’ behaviour satisfies the applicable legal requirements and whether its decisions harmed competition in a relevant Canadian market. The 2024 no-action letter did not give the company immunity from scrutiny of subsequent conduct. However, investigating current business practices is different from overturning a completed acquisition, and neither outcome is guaranteed.

Meanwhile, Ottawa has already pursued compliance measures under the Investment Canada Act. On October 22, Joly issued a formal demand giving Cleveland-Cliffs 15 days to address alleged violations of its commitments. That deadline expired on November 6. If the government concludes that the company has not complied with its obligations, it can seek court intervention. Depending on the findings, a court could order compliance, impose financial penalties or require divestiture of Canadian assets. Those are potential legal remedies rather than penalties already imposed. Any forced sale would require the appropriate legal process.

The Future of Stelco Now Depends on Jobs, Steel Orders and Enforcement

Despite the confrontational public exchanges, a negotiated solution remains possible. Goncalves has said he hopes to recall all 175 laid-off Hamilton workers before Christmas if the company can secure enough additional sales of Canadian-made steel. Joly, however, has demanded a concrete recovery plan and a credible timeline before meeting with Cleveland-Cliffs’ leadership. Neither position establishes when the idled Hamilton operations will restart. The immediate challenge is finding sufficient demand for the specific steel products affected by the shutdown while resolving the government’s concerns about the takeover commitments.

There are reasons for cautious optimism about Canadian steel demand. Reuters reported in October that domestically produced steel accounted for approximately 51% of Canadian steel consumption in 2025, compared with 41% in 2024, based on United Steelworkers calculations. Infrastructure, energy and industrial investments are creating opportunities for some producers, although benefits differ considerably across regions and products. For Stelco, the coming decisions will determine whether the dispute ends with workers returning to their jobs, a negotiated restructuring or prolonged litigation. The larger question is whether Canada can ensure that major foreign-owned manufacturers remain competitive while honouring the commitments that allowed them to operate under new ownership.

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