American Stelco Owner Says 175 Laid-Off Canadians Can Return by Christmas—If Canadian Steel Sales Rise

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For 175 steelworkers in Hamilton, the path back to Stelco now runs through the company’s order book. Cleveland-Cliffs CEO Lourenco Goncalves says he intends to recall every worker before Christmas if Canadian customers buy enough Canadian-made steel to support the idled operations. The statement turns what had become an increasingly bitter fight over layoffs, tariffs and takeover promises into a concrete—but conditional—timeline.

The offer is not a guaranteed recall date. It depends on stronger domestic sales, particularly in the cold-rolled and galvanized products made at Hamilton Works. That distinction matters because Cleveland-Cliffs and Ottawa remain locked in a legal and political dispute over whether the layoffs violate commitments made when the U.S. steelmaker acquired Stelco in 2024.

A Christmas Recall Is Possible, but It Is Not Guaranteed

Goncalves told The Canadian Press that Cleveland-Cliffs is now relying on Canadian customers to buy more Stelco steel rather than waiting for Ottawa to impose tighter restrictions on competing imports. He said that if the sales plan works, his intention is to recall all 175 workers before Christmas. The wording is important: the company has set an objective, not announced a firm return-to-work date. The public statement did not include a specific sales target, tonnage threshold or customer commitment, so the timing still depends on commercial demand developing quickly enough to justify restarting more finishing work in Hamilton.

The union representing Hamilton workers confirmed the current layoff count. Ron Wells, president of United Steelworkers Local 1005, said 175 workers have been laid off at Hamilton Works, while no layoffs had yet occurred at Lake Erie Works in Nanticoke as of the latest reporting. For families heading into the holiday season, that makes the new statement more tangible than the earlier debate over potential job cuts. Still, a conditional recall leaves workers dependent on a market recovery they cannot control.

The Original Warning Was Much Larger Than the Current Layoff Count

The number 175 is significantly lower than the figure that first alarmed workers and governments. In a September 28 internal communication, Stelco warned that as many as 500 employees across Hamilton Works and Lake Erie Works could be affected as the company restructured production. Cleveland-Cliffs has since stressed that 500 was never the number of workers actually laid off. The company now says the temporary layoffs are confined to 175 employees in Hamilton, a figure the union has independently confirmed.

That does not make the disruption small. Local 1005 has argued that workers are carrying the cost of a wider dispute over trade policy and steel imports. Wells accused Cleveland-Cliffs of using the layoffs as leverage in its campaign for stronger protection against imported steel. Cleveland-Cliffs, meanwhile, has cited weak demand for value-added steel products, U.S. tariffs and continued import pressure in explaining the Hamilton reductions. The disagreement matters because it shapes whether the layoffs are viewed primarily as an unavoidable market response or as part of a larger battle over Canadian trade policy.

Hamilton’s Cold-Rolled and Galvanized Steel Is the Core Problem

Hamilton Works is largely a finishing operation for higher-value sheet products. Stelco’s own product information describes the site as a cold-rolling and coating facility, with a cold mill feeding galvanizing lines. Those products are used by manufacturers and service centres, including customers tied to the automotive, construction and other industrial markets. Cleveland-Cliffs says this is precisely where demand has disappointed. When it bought Stelco, the company expected to sell more cold-rolled and galvanized steel inside Canada, but Goncalves now says that expected domestic market has not materialized.

The contrast with Lake Erie Works is central to the company’s strategy. Lake Erie produces steel and hot-rolled products, while Hamilton performs downstream finishing on part of that output. Cleveland-Cliffs says the Canadian hot-rolled market has improved enough for Stelco to maintain overall production tonnage while shifting its product mix toward hot-rolled steel. At the same time, it has indefinitely idled Hamilton finishing operations because value-added sheet demand remains weak and imports remain prevalent. In practical terms, stronger steel demand alone is not enough; the sales recovery needs to reach the products and operations connected to the laid-off workers.

The Takeover Came With Five Years of Binding Commitments

The dispute is more consequential because Cleveland-Cliffs did not acquire Stelco without conditions. Ottawa approved the takeover in October 2024 under the Investment Canada Act after the American company provided a package of binding undertakings lasting five years. Those commitments included keeping Stelco’s head office in Hamilton, respecting collective agreements and pension obligations, making capital and research investments, and maintaining employment levels. The transaction carried an enterprise value of roughly C$3.4 billion, making those undertakings a central part of the federal government’s decision to allow the deal.

Employment has now become the most visible test of that agreement. Industry Minister Mélanie Joly has accused Cleveland-Cliffs of breaching six commitments and gave the company 15 days to address the alleged violations, demonstrate that it remains compliant or explain why it has not met the terms. Ottawa has warned that court remedies could include orders compelling compliance, penalties of up to C$10,000 per day, or even an order requiring Cleveland-Cliffs to divest control of Stelco. That legal backdrop raises the stakes well beyond an ordinary temporary layoff.

Cleveland-Cliffs Says the Numbers Show It Is Still Compliant

Cleveland-Cliffs disputes Ottawa’s interpretation and says Stelco remains in full compliance with all 34 undertakings tied to the acquisition. In an October 26 update, the company said it expects average annual employment in the current reporting period to reach at least 1,879 bargaining-unit full-time-equivalent employees, 113 above the required level of 1,766. It also expects an average of at least 627 salaried full-time-equivalent employees, compared with a required level of 603. The company’s argument is essentially that the employment commitments are measured using annual averages rather than requiring every individual position to remain continuously filled.

Ottawa has taken a different view while pointing to employment and several other alleged breaches. That creates a technical but important legal dispute over whether Cleveland-Cliffs can temporarily lay off workers while still satisfying the annual employment floors written into its undertakings. The company says it remains compliant and plans to update its compliance report after the current reporting period closes on October 31. Joly, meanwhile, has said she wants a concrete plan and timeline for returning workers before agreeing to a meeting with Goncalves. The Christmas proposal may therefore become part of the broader fight over whether Cleveland-Cliffs is living up to the deal Ottawa approved.

Tariffs Have Turned a Plant Decision Into a Cross-Border Fight

Steel trade policy sits behind nearly every part of the dispute. The United States currently applies a 50% Section 232 tariff to covered steel products, including major categories of flat-rolled steel. Cleveland-Cliffs has publicly supported strong U.S. Section 232 protection, arguing that tariffs reduce the pressure from dumped imports and support domestic steelmaking. Ottawa has criticized the company for championing American tariffs that hurt Canadian producers and then pointing to difficult market conditions when explaining layoffs at its Canadian subsidiary.

Canada has also tightened its own steel defences. Federal tariff-rate quotas limit specified steel imports from non-CUSMA countries, with imports exceeding those quotas subject to a 50% surtax. Current quota levels are set at 20% of 2024 import volumes for countries without a Canadian free-trade agreement and 75% for eligible free-trade partners. Imports originating in Canada, the United States and Mexico are exempt from that particular quota measure. Canada also maintains counter-tariffs on certain U.S. steel and aluminum products. For Stelco, however, import protection does not automatically create orders. Canadian manufacturers still have to choose Stelco’s steel.

Stelco’s Latest Results Show a Business With Two Very Different Markets

The unusual feature of the current dispute is that Stelco is not simply suffering across every product line. Cleveland-Cliffs reported that the third quarter of 2026 was Stelco’s strongest quarter since the acquisition and said the Canadian hot-rolled market had improved substantially enough to make Stelco a positive contributor to EBITDA. The parent company also posted a stronger quarter overall, reporting improvements in selling prices, sales volumes and profitability. That performance supports Cleveland-Cliffs’ decision to concentrate Stelco on hot-rolled products where it says a viable market exists.

The weakness is concentrated further downstream. In its latest regulatory filing, Cleveland-Cliffs said demand for value-added sheet products in Canada remained weak and imports remained prevalent, leading it to indefinitely idle finishing operations at Hamilton Works. Automotive demand is especially relevant because Cleveland-Cliffs identifies the auto industry as its largest steel market in North America. The company reported North American light-vehicle production of about 3.8 million units in the third quarter of 2026, down from roughly 4.0 million a year earlier. That helps explain how a healthier market for one kind of steel can coexist with layoffs in another part of Stelco’s operations.

What Has to Happen Before Christmas

The immediate test is straightforward to describe but harder to execute: Stelco needs enough Canadian orders for the affected value-added products to justify bringing Hamilton workers back. Goncalves has shifted his public message toward asking Canadian customers to purchase Canadian-made Stelco steel, rather than relying on additional government import restrictions to produce the recovery. That puts domestic buyers at the centre of the recall plan. It also means the company’s Christmas target will be tested quickly, because the window between late October and the holidays is short for rebuilding orders, scheduling production and restoring shifts.

Several milestones will show whether that path is working. Stelco is due to update its compliance reporting after October 31, Ottawa’s enforcement process remains active, and Joly is still demanding a credible recall plan. Goncalves has also said he will not discuss a sale of Stelco during the next calendar year, while leaving open the possibility of a future sale after the company demonstrates higher production and returns all 175 workers to their jobs. Until actual recall notices are issued, the safest reading is that Christmas is a target tied to Canadian steel sales—not a guaranteed homecoming date.

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